Offering a mobile banking app is the price of admission in today's financial services marketplace. But simply providing members with an app doesn't necessarily equate to high adoption/user rates.
Only credit unions that understand their members' wants and needs will be successful in the mobile race.
"On each new account opened, our employees extoll the benefits of internet and mobile banking and take the additional time to help the member enroll and navigate within our mobile app," said VyStar Credit Union Chief Operations Officer Rich Alfirevic. "Members have told us that because we take this time to assist them they are feel comfortable using a delivery channel that they may have otherwise not embraced."
The $5.3 billion-asset Jacksonville, Fla.-based VyStar CU, which supports 475,000 members at 34 locations, was recently recognized for its high approval rating among mobile users.
MagnifyMoney, a free service providing unbiased comparisons of financial products, compiled the ratings of iOS and Android banking apps from over 100 of the biggest banks and credit unions, including the 50 largest banks and 50 largest CUs.
Last November, the firm collected data from iTunes and Google Play and created a composite 1 to 5 rating factoring a weighted average of the ratings from both the iOS and Android platforms. Eastman Credit Union, ESL Credit Union, Redstone Federal, SEFCU and VyStar CU were noted market leaders, all sharing a 4.7 score.
Why Vystar Stands Out
"We first learned about the survey results from our mobile banking vendor Digital Insight. VyStar had a focus to provide more services and meet the growing needs of our members on mobile over the past few years," said Alfirevic. "VyStar's mobile statistics stand out in the survey and has support from our members because of our onboarding process which is directly associated to our high adoption rate with mobile banking users."
Vystar CU first released a mobile app for the iPhone in November 2010. By the end of 2011, 22,360 members had download and used the app. While nearly 50% of members use Android devices, an Android version of the app was not launched until January 2013. Alfirevic said this was due, in part, to security concerns.
"We saw a 100% increase in members using the iPhone mobile app by the end of 2012. The first year we released the Android phone app, 36,905 members downloaded this particular app and began using it," he said. "At the end of 2014 we have 141,504 members actively using our mobile banking apps which are 30% of our total membership and 67% of our active internet banking members using our mobile app."
How to Increase Mobile Adoption Rates
There are a plethora of credit unions that have learned lessons over the last few years and revamped initial app offerings. Among this group are a number of progressive organizations, including the Charlotte, N.C. - based Carolinas Telco Federal Credit Union.
Vice President Marketing and Compliance Richard Buckley explained that the CU launched a Mobiliti (Fiserv) custom branded app in October 2012, which initially included the ability to check balances, transfer funds, deposit checks and search ATM and branch locations.
The $391 million Carolinas Telco CU serves 33,799 members in 11 branch locations. Since 2012, the credit union has upgraded offerings for the iPad and Android tablets (September 2013), remote deposit (October 2013) and custom links to the website for information on rates, applying for a loan, opening a new account and contact information (April 2014).
To underscore user rates, Buckley said that in December 2014, 808 members conducted 2,112 remote deposits. These members represent 15% of mobile banking users and 5% of online banking users. The same month, there were 4, 810 iPhone users, 4,302 Android users, 788 iPad tablet users and 31 Android tablet users.
From an adoption perspective, Buckley said user rates are going in the right direction. And while the app has made it more convenient for members to bank remotely, he said the CU is mindful of not losing sight of branch operations.
"We have experienced some loss of connection with some members as they do not come into the branch as often and we have implemented strategies to push more information out to the members who use the mobile banking application to make sure that they stay informed about new products, services or special promotions that we have going on," said Buckley. "The mobile banking application has allowed us to retain the younger members as they find tremendous value in the convenience of the application."
Understanding how and when members use mobile banking apps is critical to respective success. To this end, many credit unions conduct marketing campaigns and internal beta testing before launching an app or an updated app.
Member Demand is the Driver
"Our utilization was driven mostly by member demand, we did minimal product marketing for the base product," said Dow Chemical Employees' Credit Union Vice President of Information Technology Art Peters. "We did develop some YouTube videos to highlight our remote deposit feature and these have been augmented with general videos on mobile usage."
In early 2012, the $1.4 billion credit union, serving 57,000 members, offered an augmented out of the box mobile solution so members could access account transfers as well as bill pay. By December 2012, a soft launch of remote deposit capture was announced.
"As I recall, we had over 1,000 users the first day and were around 5,000 within the first couple of months. This rather blew us away," said Peters. "We are currently around 60% penetrated of eligible members and are continuing to add users at a rate greater than our membership growth, albeit it has slowed considerably."
Dow Chemical Employees' CU members mostly use the Apple iOS and Google Android platforms, but Peters said the CU supports others including BlackBerry, Windows phone and Java. Those platforms are seldom used, he added.
With just one location, mobile growth is essential for Dow Chemical CU employees, many of whom use the app for balance inquiries, remote deposit, transfers and bill pay. "We see our mobile utilization as a key to member service given our single branch model," said Peters.
Understanding the App Culture
For many credit unions, 2012 was the watershed year for launching a mobile banking application. The increase in smart phones contributed to this groundswell of support. Every financial institution was getting into the app business, but at the same time it was unclear exactly what members wanted or how they would use it.
"Nowadays people expect the companies that they do business with to offer online and mobile products. This is particularly important in the financial services industry," said Greater TEXAS Federal/Aggieland Credit Union (GTFCU) Vice President of Marketing Brandy Conway. "If you aren't offering a mobile app or friendly online services, people will bank somewhere else. Mobile has become a way of life."
In October 2012, GTFCU began offering mobile banking via a Malauzai Software product that was fitted and branded to the CU's needs. At the time, the $540 million CU with 69,000 members and 17 branches had 903 registered users and 736 total downloads.
Prior to launching the offering, a number of beta tests were administered. Conway explained the first testers were the credit union's project team, and then the support team and finally testing was opened to all staff and volunteers. The process took nearly eight weeks. The major takeaway, she said, developing FAQs (frequently asked questions) for members.
"Today, we have 12,321 registered users and 25,860 total downloads," said Conway. "In regards to just mobile deposit, in October 2012 we processed 108 deposits for $30,000. In December 2014 we processed 3,679 deposits for $1.35 million."
Upgrade Boosts Usage
One of the reasons for this increase was due to upgraded app services. The initial offering, for example, didn't include t remote deposit, loan application and peer-to-peer payments. Additionally, effective marketing concepts were still being formulated.
"We did see an increase in downloads once we started advertising the app to our membership. We placed small signs in our lobby and placed banner ads on our websites and in our online banking," said Conway. "We also saw an increase in member adoption after we released the version that had the remote deposit feature."
The app is available on Apple and Android phones and the iPad. To date, GTFCU has 2,148 registered Android users, 7,550 registered iPhone users and 1,081 registered iPad users. "In regards to downloads we have 8,420 total Android downloads, 15,433 total iPhone downloads and 2,007 total iPad downloads," noted Conway.
While Mobile adoption rates continue to rise each month, credit unions have to be mindful that not all members will embrace these technologies. As a result, an emphasis has to be placed on not only marketing but onboarding and education. Any feedback received during this process should be included in the next generation of the app, said VyStar CU's Alfirevic.
"The rise in tablets with the larger screen can increase acceptance if it is customized to the tablet rather than being a mirror image of the smart phone app. Understanding what is available in the marketplace and with competitors and including these items in your app also continues to make the app relevant to your membership," said Alfirevic. "Our acceptance and migration to mobile apps continually increased as we offered more products, functionality and features."