It was the “killer app” that credit unions had to have to keep up with banks and brokerage houses. We had to have it in order to keep members from going to another site where they could see all their financial information in one place. Millions of consumers would insist on it. Account aggregation was a defensive strategy that could lead to the wave of future online financial control, right?
But the promise of account aggregation was never matched by its reality…at least until now. As some early adopter credit unions discovered, just having it wasn’t enough. Members grew bored with just seeing all their accounts in one view. It began to dawn on credit union information technology (IT) and marketing officials that the real gold was in making account aggregation useful rather than static. That’s precisely what several of those CUs have now undertaken by taking it to the next level of development.
So account aggregation has gone through an early stage of evolution: early hype and flop. As evidenced by several participants to a March 4, 2003 Callahan and Associates Webinar on the subject, many CUs experienced a spike in sign ups followed by trailing use for several months.
The Key to Growth: Transactional Capabilities
The experience of Patelco CU (CA) and Bellco CU (CO) was common to the group. After starting, both soon realized that separate login requirements made it cumbersome for members. Determined users (or those accustomed to technology, or both) stuck with it, but eventually many of those lost interest as well. Of Patelco’s 90,000 home banking users, only 2,010 were users of account aggregation, said John Shields, SVP eBusiness. “There was just no bang for the buck,” said Sandra Sagehorn-Elliot, member relationship manager for Bellco. “We had to add Bellco data and the display was too ‘plain vanilla.’”
In the second quarter Patelco will launch a new program from CashEdge that incorporates all present data (Patelco accounts and those held by other financial institutions) but also has the ability to transfer funds via the ACH network. “What was lacking was integration of the information and the ability to do something with it,” he said. As far as creating a revenue potential, Shields said that data mining might offer a good opportunity to cross sell. It’s likely that Patelco may charge a fee to send money out of accounts, but not in, and pricing will be based on the over all membership relationship, he added.
Bellco discovered that account aggregation users (2,500 active ones) were higher value members, which sealed the decision to keep it going, but Sagehorn-Elliot wanted a “more actionable platform where members can transact a lot of financial business.” Bellco’s new program, called “Total View” from Umonitor, will soon go to full transaction capability, she said.
Another primary concern was convenience. “It had to be just another path under our online banking menu (with links to billpay) that’s easy for members to jump into.” The single sign-in was also key. “In the first 10 days, 1,000 members went in to aggregate accounts,” Sagehorn-Elliot said.
Chad Laske, e-Marketing Manager for Boeing Credit Union, Tukwila, Washington, said BECU adopted account aggregation at the same time as did Patelco, in early, 2000 and saw the same user fall off. “We now have 18,000 registered users, but only 2,000 are active.” Those numbers are small compared to BECU’s 110,00 active online banking users. “But we still firmly believe in the value in account aggregation. The potential is still there to grow it into something much better and more useful.”
“Our plan is to benchmark the technology and see where it can take us. Though aggregation is still in the early stages, it has the potential foundation to provide advisory tools and inter-funds transfer capabilities,” Laske said. Laske also wants a single sign-in so that online banking passwords are the same as those used for “mybecu,” the CU’s branded account aggregation. “The perception of privacy is important, too, so we’ll be sure to let members know that it is a secure session. This will be a multi-year strategic plan,” he said.
This article is part of an expanded look at the state of account aggregation in the credit union system from Callahan's upcoming 2003 Credit Union Technology Survey publication. In it's 11th annual edition the Technology Survey provides in-depth articles and case studies on a variety of important technology issues affecting credit union strategy. The account aggregation section of the Survey will contain an expanded exploration of the current state of account aggregation in the credit union system with further learning on how these credit union's defined and implemented their account aggregation strategy. The resource also features a comprehensive listing of vendors/providers who currently offer aggregation solutions to credit unions. Click here to learn more and pre-order your copy today!