PEACHTREE CORNERS, Ga.–An inside/outside strategy can become a significant boost for credit union bottom lines this year, according to one person, who noted that in turn back-end efficiencies can free up money that can be used to improve products members will respond to.
Jason Schwabline, senior vice president of product management and strategy at Alogent, believes credit unions can improve their financial performance by increasing member transactions through technology while at the same time increasing efficiency inside the walls of their own shops.
Schwabline says credit unions are now in a “perfect storm” of technology and innovation. “Credit unions will spend; they will innovate,” he said. “Some use third parties, and some innovate themselves.”
Tearing down credit union silos in favor of integrated platforms is a big step the cooperatives can take, he suggested. From there, the money saved can go towards developing key mobile relationships with members.
Many credit unions have been working to educate and encourage their members about mobile solutions they can access from a variety of locations and devices, he said. But that doesn’t mean they won’t ever see members inside branches. Schwabline has observed tech-savvy Millennials who start and fund their accounts remotely, but who then find their way into the bricks-and-mortar.
“Younger members may come in for financial advice,” he said. “They want a real person to tell them how to plan a savings strategy, how to finance a car, how to pay down their mountains of student debt. And the branch officer who counsels them may become not only a trusted advisor, but an influencer of the millennial’s financial decisions for a long time to come.”
A Key to Building Trust
A key to developing member trust, Schwabline said, is something few CUs think about: a robust anti-fraud effort.
Schwabline also sees resistance to mobile technology and transactions fading in the Boomer generation. Smart phones and other devices have become almost universal, he observed. “Is there a hill to climb with 65 and above? Yes,” he said, but older members are starting to be comfortable with smart phones and the types of services they enable, such remote deposit capture.
Alogent has both commercial banks and credit union clients, but credit unions make up more than 1,400 of their 2,200 customers.
Among the Alogent client credit unions Schwabline said have executed well on the inside/outside strategy, according to Schwabline, is Nutmeg State Financial Credit Union in New Britain, Conn. “We consistently see new ideas” there, he said.
Others include Energy Capital Credit Union, Houston, which he said is exceptionally efficient, and Cabrillo Credit Union in San Diego, which was an early believer in back-end economies.
CUs' Successes Mirrored in Company
The success with credit unions has led to success for Alogent, as well, with the company reporting it has seen its profits rise 10%-to-15% a quarter each quarter for several years.
The firm, formed by the merger of predecessor companies Alogent Corp. and Bluepoint Solutions, produces software in the areas of deposit automation, item processing, enterprise content management, and omni-channel account opening.
Alogent has recently announced several deals with some of its key credit unions. They include Y-12 Federal Credit Union, which went live with real-time posting and fraud protection for mobile RDC; Energy Capital, with teller capture and Alogent’s item processing suite to achieve automated fraud prevention immediately upon check scanning, the ability to alert members of any holds or issues, and a paperless transaction; and Rogue Federal Credit Union with the firm’s ITM capture solution to give members an additional channel for a more convenient experience while boosting operating productivity.
–Mark Fogarty