CO-OP Study Reveals 5 Mobile Features CUs Say Are Most Important

More than one in 10 credit unions still do not offer services on a mobile app for their members, but for those that do, five features lead the pack in importance, according to a new debit benchmarking study from CO-OP Financial Services.

The survey of 240 U.S. credit unions, done in partnership with Mastercard and Mercator Advisory Group and including credit union executives, debit card product managers and other employees, found that 80% felt balance and transaction inquiries were extremely important features in mobile banking apps, followed by the ability to transfer funds (73%). Sixty-eight percent said the ability to make loan payments was extremely important, and 54% said the same for bill pay and debit card alerts, respectively.

Overall, 87% of credit unions offered some services on a mobile app to members. Those offerings —or the lack of them — could have a big impact on credit unions’ debit portfolios, CO-OP noted.

“More banking activities are moving to a mobile phone, including some which directly impact debit cards. These activities include receiving debit card alerts, setting card controls, accessing transaction history and making payments with debit cards as a funding source,” it said.

Over half (53%) of the respondents also said their credit unions offered online and/or mobile account opening services.

“Nationally, mobile account opening is an area of growing interest as a rapidly rising number of consumers are now shopping for financial services using their mobile phones. Credit unions want to capture that interest immediately and create an account through a mobile account opening process. The ability to open an account via mobile phone is designated as extremely important by 26% of credit unions surveyed,” the study said.

Just over 40% credit unions offered mobile card controls to members. Resource constraints and doubts about the business model due to lack of cardholder demand were the biggest reasons most did not offer the feature, CO-OP said.

”Despite the benefits, getting cardholders engaged with card-control capabilities has been slow to evolve,” it added. “Fewer than 10% of respondents have been able to engage 25% or more of their members with card controls.”

Adoption of universal mobile wallets such as Apple Pay has also been slower than predicted in the United States, CO-OP said. Nonetheless, over half of the credit unions in the survey offered access to a universal mobile wallet, and another 10% were in the implementation phase. Apple Pay was the most popular offering among credit unions, it noted.

“Confusion over which merchants accept mobile wallets and a lack of clear consumer benefit has hampered their use,” CO-OP said. “Despite this market environment, the initial enthusiasm for mobile payments among the young adult population that credit unions want to attract and keep has encouraged credit unions to adopt mobile wallets.”

Card-not-present (CNP) fraud is still a serious concern for credit unions and their members, and it could inhibit debit card programs, the study said.

“If fraud in this area continues and more cardholders experience fraud on their debit cards, they may choose not to use debit card in digital channels since it not only exposes the card but affects the cardholder’s checking account relationship,” the study said. Members are less likely to use debit cards than credit cards in a mobile wallet, and they are less likely to make debit cards the default payment option there, it added.

That’s led to more fraud monitoring — and more fraud alerts for credit unions to deal with. However, 66% were comfortable with the levels of false positives occurring, the study noted.