Making the e-Grade: Focus on Mobile Banking

FRISCO, Texas — Giving credit unions an "A" for their delivery of e-services-so far, Fiserv insists that for CUs to keep that grade they'll have to be even more aggressive with technology plans in the future.

That means a strong emphasis on mobile banking, adding personal financial management tools, and exploring possibilities with social networking, said Tim Wooldridge, VP of virtual branch for Fiserv. "The delivery of financial services via social networking sites isn't likely to become a must-have application in the very near future. But credit unions can't afford to ignore this emerging channel."

Gambling On E-Services

Wooldridge said that it's difficult to project exactly when a new social networking delivery option will become "table stakes" for gaining and retaining members' business. However, waiting for that time to arrive places credit unions at a competitive disadvantage, leaving them to play catch-up, he said. "It's far better for credit unions to implement emerging online services now, live with modest rates of adoption initially, and then later enjoy a strong position to capitalize on the growth in demand."

For today, credit unions have to fully embrace mobile banking to compete with bigger players. "Credit unions must move into mobile banking to remain viable, and not just with Generation Y," Wooldridge said. "Who doesn't have a cell phone or a mobile device? Over time, mobile banking will become an extension of the online banking experience. As we see greater convergence among consumer acceptance, equipment availability, and bandwidth, mobile banking will evolve to become a must-have application."

As a result, it's likely that every segment of a credit union's membership will eventually use mobile banking in some fashion, but not necessarily in the same way, offered Wooldridge. He pointed to products like Fiserv's Mobile Money solution, which delivers all three modes of mobile access: SMS or text messaging, WAP, and downloadable applications.

Assessing the growth of e-services throughout the financial industry, Wooldridge said technologies have delivered on their promises. "Consider that an online banking presence is now expected of a financial institution. It's evolved from a nice-to-have function to an expected function, and in many respects is a benchmark against which members view your credit union. Online banking could not have attained that status without demonstrating its reliability, convenience, and value to the member."

Wooldridge argued that e-services may not have lived up to expectations in terms of cost reduction. "Some credit unions initially viewed e-delivery as the key to reducing their operating expenses. While it's undoubtedly more economical to deliver certain services electronically - such as statements and check images-online channels haven't necessarily allowed credit unions to close branch offices or make other large-scale expense reductions. Members still want and expect multiple service channels to use as they see fit."

Fiserv's headquarters are in Brookfield, Wis.