Coastal Union Online Banking Proposal

1
Coastal Union Online Banking Proposal

• Dr. Chris Hoadley
• for
• 110 IST Consulting

2
Online banking Overview

• The trend
• Why?
• How?

3
Online banking The trend

• Market overview
• Customer voices
• Features

4
The trend Market overview

• Over 50 of customers bank online at Wells Fargo,
  Bank of America
• Estimated 75 of banking customers will
  eventually use online banking
• Most online banking customers are high income
  (75k) and either under 34 or 55-64
• 20 of business customers bank online

Sources Gartner, Malhorta, CUNA
5
The trend Customer voices

• Daisy Williams Lee, 37 year customer
• On CU Everyone was so niceyou always took good
  care of us and we stayed with you.
• Now would use online banking since husband lost
  mobility

6
The trend Features

• Online banking features include
• Balances
• Transfers
• Online customer service
• Online bill pay
• Online statements
• Account reconciliation
• Loan applications

• Opening and closing accounts
• Investment tracking, planning, transactions
• Additional uses of online banking
• Additional customer contact medium
• Online bill presentation

7
Online banking Why?

• Increased markets (national vs. regional)
• Increased market share/competitive advantage for
• New customer recruitment
• Existing customer retention
• Reduced costs
• Increased customer service

8
Why? Better market

• Online customers are
• Happier
• More loyal (50 less attrition)
• Hold higher balances (50 higher balance growth)
• Buy more products (mortgages, investments, etc.)
• (Source Miles)

9
Why? Costs

• Online transactions are cheaper
• Less than 2 cents to process online transactions

Sources Booz Allen, Miles
10
Why? Costs

• CU implementation costs
• 2-10m initially, operating costs
• Savings of 2m-10m annually (assuming 30
  adoption, 1 transation online per month instead
  of branch/ATM)

11
Why? Customer service

• Superior customer service
• Individually, banks will need to develop an
  online delivery and payments strategy aimed at
  broadening relationships and retaining
  customers.
• (source Boston Consulting)

12
Online banking How?

• In-house or outsource?
• Custom or off-the-shelf solution?
• Technology and customer support decisions
• Managements

13
How? In-house or outsource?
14
How? Challenges

• Challenges to meet
• Management/organization
• Marketing and customer service issues
• Technical issues (security, training,
  troubleshooting)
• Social and ethical issues (privacy, related labor
  issues)
• Legal issues (liability)
• Implementation plan

15
How? Management

• Management Online division
• Additional Sr. VP above CTO
• Technical staff
• Customer//internal tech support
• Training functions for call center, branches
• Liaison from marketing

16
How? Marketing and customer service

• Improved customer support
• Centerpiece of our development strategy
• Always include that CU touch

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How? Marketing and customer service

• Marketing strategy
• My life. My money. My union. Coastal
  Union.http//www.coastalunion.com/
• The customer service you deserve.
• Print, TV, statements, online banners

18
How? Technology

• Current technology infrastructure needs
  additional security, hardware to support online
  banking
• Minimal impact on current technologies

19
How? Social and ethical issues

• Privacy policy using ABA recommendations
• Internal HR campaign to convey values of this
  initiative, reassure labor
• Training for staff in information security

20
How? Legal issues

• Privacy policy
• Careful attention to non-banking services
  agreements
• Information security technologies, policies

21
How? Implementation plan

• Year 1 Hire staff, begin market research on
  rollout priorities, spec systems, purchase off
  the shelf components, institute online balances
  ASAP
• Year 2 Development and testing of
  infrastructure, train tellers, finalize pricing
  strategy, begin marketing campaign
• Year 3 Focus groups, customer feedback, redesign

22
Thank you

• 110 IST Consulting (110_at_istconsulting.com)
• Including
• Dr. Hoadley
• MUCOW
• Black Screens
• Team IUA
• Q
• The Whatevers
• InterTech

23
Rhetorical theory

• Ethos - be a believable authority
• Pathos - appeal to emotions
• Logos - argue rationally, support claims
• Enthymeme - let the audience fill in the most
  meaningful example for themselves