CHELSEA, Mich.—It’s time for credit unions to turn up their marketing and educational efforts around digital banking, according to one person, who said new data show many CUs are successfully converting long-time digital holdouts into electronic consumers.
The data also reveal something else: credit unions would be wise to pay more attention to person-to-person payments, as the pandemic has given a big boost to usage of the service.
Denny Howell, co-founder and SVP of experience at Mahalo, says the momentum credit unions are building during the crisis in converting members to digital channels is too great to let slip away. Citing data from his company, which works with more than 20 credit unions, Howell said numbers show all age groups, even seniors, are turning to digital banking in large numbers to avoid coming into the branch or even the drive-through.
“What this really shows is the ability for members, regardless of generation, to get in and do these functions,” said Howell, whose company provides online and mobile banking solutions for credit unions. “Digital banking has always been one of those things dominated by the younger generations, but now, due to the pandemic and all that credit unions are doing now to promote digital and educate members on its use, e-banking is taking hold across the entire membership base. This is a great deal of momentum we are seeing and credit unions need to grab onto it.”
Howell advised credit unions to keep heavily promoting their digital services well after the pandemic ends, adding that often a single event can transform consumers’ habits. He pointed to data that indicates credit unions have a big opportunity to move more members to using digital services during their entire lives.
“It’s obvious people are not going into the branches right now, so we ran some numbers,” said Howell. “We’ve seen electronic banking sign-ins during the crisis increase by 40% to 70% across all of our credit unions. That is a lot more people using digital banking platforms.”
Boost in RDC
Remote deposit capture usage has followed a similar path, said Howell.
“We have seen the use of RDC across our credit unions increase anywhere from 41% to 80%,” said Howell. “We have also seen a larger increase in dollar amounts deposited via RDC—anywhere from a 52% increase to 155% increase.”
Where the Mahalo data also indicate a change can be seem taking place in two different ways within P2P, according to Howell. He explained not only has P2P usage markedly increased during the pandemic, the amount of money being transferred is much higher. He suggested P2P solutions are becoming more critical to more people for several reasons, one being during the pandemic and economic downturn people are sending money to each other for new purposes.
“Our data show an 84% increase in P2P usage across our credit unions,” said Howell. “That’s really big.”
Denny Howell
Bigger Amounts
Yet, what warrants even more attention from credit unions is the dollar amounts now being transferred via P2P.
“The dollar amounts are up 186%,” he said. “We have hypothesized that people are not just paying each other this way, they are sending money to family and friends to help them get through these tough times. I think we are seeing a new kind of payment arise for P2P—families helping each other. Maybe a son is unemployed now and parents are sending him money.”
Just as the pandemic is driving more consumers to digital banking, it is doing the same for P2P, contended Howell, who added that P2P—while seen as a nice add-on feature by many FIs—is quickly becoming more mainstream among consumers.
Finding Efficiencies
Credit unions, Howell said, are going to need to find ways to increase efficiencies following a crisis that is likely to deplete capital and leave credit unions looking for more ways to become even more efficient.
“This is a huge opportunity for credit unions to piggyback on the need for digital banking now,” said Howell. “They can piggyback on this and get many more members in the older generations using mobile banking, for example. They need to promote the use of digital services, continue educating members on its use, and members who pick this up during the pandemic will just keep on using e-services. I know my parents had never used RDC, that is, before the pandemic. Now, they’re using it all the time.”