Looking to Grow Your Membership? Prepare for Higher Remote-Banking Transaction Volume

By Jon Haller
Director of Corporate & Market Research
Credit Union National Assn.

Over 30 million consumers who are eligible to join credit unions, but haven’t yet done so, are between the ages of 18 and 34. This, according to CUNA’s 2006-2007 Survey of Potential Members report.

The study goes on to cite that credit unions looking to attract and serve the financial needs of eligible non-members can expect fairly strong growth in online banking, Internet/e-mail bill payment, and check card transactions; moderate increases in ATM and audio response transactions; a fairly sizeable drop in in-lobby transactions; and stable numbers when it comes to the remaining service delivery channels.

Depending on the delivery channel, these conclusions are based on:

• the high percentages of potential members using the channel less frequently,
• the high percentages using the channel more frequently, and/or
• the relatively high percentage-point (pp) differences between the percentage of eligible non-members using it less and the percentage using it more.

The greatest transaction growth will come with online banking, online bill pay, and check card purchases, in part because roughly 60% to 65% of eligible non-members currently doing business via these channels are doing so more than they were a year ago. Also, a considerably greater percentage of current users are utilizing them more frequently than are utilizing them less often. Among current online bill pay users, for example, 62% are using the service more frequently, while just 3% are using it less frequently, for a net difference of +59pp (See Figure).

Important note: For any given delivery channel, above, the percentages are based solely and exclusively on those consumers who currently use the channel.

Given the above trends, it’s not totally surprising that fairly large numbers of potential members will be visiting their financial providers’ lobbies with less frequency in the future. While branches are, by far, the most relied-upon delivery channel, only about 10% of current branch users are visiting their branches more frequently than they were last year, whereas 40% are using them less often. The accompanying -29pp difference for branches represents the largest negative gap among the various delivery channels.

Driven primarily by the prevalence of young adults among eligible non-members, and this group’s heavy reliance on remote-banking channels, potential members, as a group, will yield higher transaction volumes in the coming years – on a per-person basis – than will existing credit union members. We anticipate this will hold true for virtually every service delivery channel with the exceptions of in-lobby transactions and transactions over the phone with a “live” person.

CUNA’s companion report to this study, 2006-2007 National Member Survey Report, points to the conclusion that credit unions, as a group, must be prepared to handle – and make the investments to accommodate – increased check card and online transaction volume in the coming years, just from their existing members.

Credit unions seeking to increase their membership by attracting large numbers of young adults will face even greater remote-banking transaction volume – particularly for check card purchases, online banking, and bill pay services.

These reports are available for purchase individually, or at a reduced package price. Click on any of the links below for more information or to purchase a report(s).

• National Member Survey/Survey of Potential Members – reduced-price package
• National Member Survey report
• Survey of Potential Members report

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