Auto CUs Release Cyberspace Study Results; Online Bill Pay Popular Among Older Members

LAS VEGAS – With heightened national interest on the success of bill pay and related Web services, automotive credit unions take the lead this month in opening up the books on just how well they are measuring e-commerce, particularly in reaching their customer base. “We think this kind of data is pretty important and we’re glad to be the first association since the GAC last February to undertake this kind of survey following the release of initial `national’ results,” said a spokesman for the Combined Council of Automotive Credit Unions. The spokesman was referring to the Combined Council’s participation this year in an “e-metric” teleconference and focus group survey of seven auto CUs conducted by CUNA Mutual Group and the University of Wisconsin done as an outgrowth of the 2003 National Credit Union E-Metric study. Results from that study detailing metrics collections on Web activities were released at CUNA’s GAC meeting earlier this year. Among the findings of the latest CCACU study was one that might be eye-opening: it’s not just the technically-savvy younger generation that is interested in bill pay. The older generations are taking advantage of online services in larger numbers because “they worry about missing a bill payment while they are away.” In addition, the “2003 National Study maintained that the most popular e-metrics used among credit unions were page hits, frequency of use and page views” but the focus group of the seven auto CUs “did not follow suit.” Instead, that group did not “place a lot of emphasis on these data points when making business decisions,” the survey concluded. The CCACU survey results were to be detailed here Oct. 6-9 at a panel presentation during the trade group’s annual meeting to be held at the Flamingo Hilton. Participating as panel speakers are representatives from two of the participating CUs – Craig Kocur, e-commerce coordinator at DORT FCU in Flint, Mich., and Barbara Scott, vice president of sales and marketing at Midwest United CU in Blue Springs, Mo. “We are probably a little bit ahead of other auto credit unions in online services having launched online banking and bill pay in 1999,” noted Kocur citing DORT’s addition of live chat last year and the start of check imaging on e-statements. DORT has also implemented financial calculators and educator links. The $270 million DORT with 47,000 members has 9,000 online users of which 2,500 use or transact business on the website every month, said Kocur.. Reflecting its popularity at banks and CUs across the U.S., DORT’s number of number of bill pay users has climbed sharply over the last year from 500 to 800, he said. Kocur said his Las Vegas presentation as well as Barbara Scott’s of Midwest will likely focus on the hotly debated question of how much to charge-or not charge-for bill pay services. DORT, he said, uses a “hybrid” system where it offers the service for free for those using e-statements but it does charge $5.95 a month if users do not reach the five bills a month threshold. Scott of the Kansas City CU said CUs “really can’t charge for bill pay” because the real value is that it builds new members and creates loyalty-”product stickiness.” That is, she explained, members find it difficult to leave an institution if they retain a checking or savings account tied to bill pay. Like many other CUs as evidenced in e-mail marketing roundtables, Midwest does require members to handle three bills per month and if that threshold is not reached the CU charges a $5.00 inactivity fee. But local competition always plays a major role in how much to charge, said Scott noting that “Bank of America’s offering of free bill pay” has long been a factor for CUs everywhere on how to price bill pay. Midwest, said Scott, only rolled out its bill pay service in July “and it’s too soon to know what kind of results we are getting.” Regarding pricing, one leading bill pay vendor, Digital Insight of Calabasas, Calif. said it sees the trend toward offering the service for free. “At a minimum, financial institutions should be offering free bill payment and presentment to those who are actively paying bills online since they will see the benefit of dramatically reduced attrition from these users,” said Ryan Berryman, director of product management for Digital. Apart from bill pay, Scott said her talk in Las Vegas will focus on how Midwest tracks overall Web site loan activity including an examination of the demographics of the active users and those who send e-mails. Meanwhile, CACCU said it is hopeful the findings from the CUNA Mutual-University of Wisconsin survey “will help CACCU members in utilizing the collection of metrics to better determine if they are getting a good return for the many resources designated for their Web based activities.” Sue Racine, CUNA Mutual’s assistant vice president for association relations, noted that CUNA Mutual has been a member of the university’s E-Business Consortium for five years and has relied on its research to conduct technology studies for CU trade groups including CUNA, the CUNA Technology Council, the CUNA Marketing and Business Development Council “and now the Combined Council.” CUNA Mutual, she said, “has offered the results of those efforts at no cost to the credit union family.” Racine said that based on new national research on e-metrics, the CCACU report should be useful in developing and implementing online strategy “for launching new products, identifying tools for measuring e-metrics and deciding what services to offer online.” -