CUs, Community Banks Offered Suite of Products to Best the Big Banks

BancVue CEO Gabriel Krajicek has a set of products he believes will help credit unions and community banks effectively win the marketing war against big national banks.Launched under the brand name KASASA, the four new checking and related products offer credit unions and community banks a way to strengthen their marketing programs and product offerings to better compete against the biggest national banks, according to Krajicek.While community banks and credit unions have been busy competing for a shrinking slice of their local markets, Krajicek said, they have largely ignored the growing power and influence of the big national banks, which have been winning the battle for market share.“If you look at the numbers it becomes clear that the big national banks have been eating the lunch of both community banks and credit unions,” Krajicek said. “What we offer are the tools both can use to start winning that fight.”The way Krajicek views the situation, both community banks and credit unions have struggled to match their traditional strengths of service and trust with the high-powered products national banks have offered. BancVue believes the KASASA suite of products will help credit unions and community banks close the gap between great service and best products by offering a nationally recognized brand of strong financial products while retaining their brand and reputation for service.“Where other efforts to build a national brand have stumbled, at least on the community banking side, has been because they offered consumers what they already recognized,” Krajicek asserted. “For example, the phrase ‘a real community bank.’ Nobody doubted that a local bank in their town was really a community bank, they doubted whether the bank could offer them the kinds of best-in-class products that they wanted.”Krajicek stressed that BancVue meant KASASA to be a product brand only-the brand for a suite of banking products that a given credit union or community bank can offer under its own brand reputation for strong, locally focused customer service and lending.“What we want is for a bank or credit union to be able to say something like ‘We are proud to offer KASASA checking,’ not that they are a KASASA bank or credit union,” he added.BancVue’s suite of KASASA products adopts and builds on the more conventionally named “rewards checking” products that the company had already been offering.The KASASA Cash checking account is a high-interest checking account that requires accountholders to take certain steps to be able to earn the higher interest, including at least one regular direct deposit, electronic statements, online banking and 10 debit card purchases per month. In return, members receive high interest on checking balances with no ATM fees and free online banking and bill pay.The KASASA Tunes account is a checking account that rewards members with 10 free downloads from iTunes instead of a high-interest yield.The KASASA Saver account is a high-interest share account tied to a KASASA Cash Account. Saver accountholders are able to earn high interest on both accounts and have their refunded ATM fees and interest from both accounts added automatically to the savings account.The KASASA Giving account is a high-interest checking account that enables accountholders to donate both the interest from their account and a small amount from each use of their debit card to one of three national charities and up to two local ones if the credit union designates any. The national charities are Stand Up to Cancer, Boys and Girls Clubs of America and the American Humane Association.Krajicek explained as well that credit unions using the KASASA products will be able to adjust them to meet their own goals. For example, a credit union with a lean capital ratio might want to cap the amount of money that can earn high interest in the Cash or Saver accounts. Credit unions offering the Giving account can also designate two other categories of local donations.Krajicek explained that 620 community banks and credit unions in 49 states have started using BancVue products, and the company expected most of those to adopt the KASASA line.Keith Wiemert, CEO of the $107 million Seasons Federal Credit Union headquartered in Middletown, Conn., expects that credit unions will probably find the KASASA products a strong option for their members, based on his credit union’s experience with the products. Seasons FCU is the first credit union to formally start using the KASASA programs.The credit union has seen widespread consumer excitement from the program, with members of the public coming into branches to ask about the product, he said.“We have been very pleased with the strong reactions we have gotten,” said Wiemert.Seasons began offering BancVue products as a way of distinguishing its products from the offerings of other banks and credit unions in the area.Wiemert said the response to the KASASA name has been very strong, with some long-term members that he never expected to be interested in the accounts or who have barriers to things like online banking and statements that would preclude their taking advantage of the offer.He described one member who was with the credit union long enough to have a three-digit account number but walked in demanding to know “what was all this about KASASA. What is it? I don’t understand it.” Wiemert described the account and what the member had to do to get one, and the member became excited by the interest rate (currently 4.25%) and was willing to sign up.“We were lucky in that he already had his pension and Social Security deposits made by direct deposit, so that was a hurdle we already crossed, and he already used our online banking,” Wiemert explained. “The biggest obstacle was the debit card where we had to walk him through his month to point out where he could make payments with his debit card. Now, of course, he makes like 20 debit transactions per month.”Wiemert said KASASA’s biggest impact on his credit union may be in the heightened attention and popularity the accounts have brought the credit union and the relative stickiness of the new accounts. According to Krajicek, KASASA accounts only have an 11% or 12% attrition rate over 90 days, and Wiemert said the low turn-over on the accounts has helped the credit union obtain and hold onto stable, longer term deposits.–[email protected]