By: Robert Rutkowski
Much has been written about grabbing the Gen Y audience and otherwise leveraging technology to reach out to new and existing members. Looking at the app store for iPhone/iPod/iPad, it shows that many financial institutions (including credit unions) have apps that offer a variety of services. On the more extreme end, a credit union could run a billpay app or something more pedestrian such as finding locations or checking account balances.
In deciding whether or not to take the step of actually creating a credit union app, the first question is how much would it cost? I have heard the number $30,000 thrown around as an example. Really it depends on what you are trying to do. If you want to show your members where you’re located, there are app creators out there that would help a credit union create an app for very little. On the other hand, interfacing a bill pay system through an app would be complicated and accordingly, expensive.
Expense is only one factor, however. Would your members even use it? If your membership base (or your potential membership base) is not tech savvy or not very interested in using apps or internet related products, creating such an app would probably bring a low return on investment. On the other hand, if your targeted member medium or existing member base is young and tech savvy and more importantly, interested in technology, an app could be very exciting to these people. Anything that establishes a communication base between you and a significant number of your members has value. How many of your members use bill pay now? How many of them are potential iPhone/ iPod/iPad users? How many people would ultimately end up using this type of product? This may be hard to identify, especially for a smaller credit union. Perhaps a membership survey would be of some value or even something more informal on the credit union’s website.
Finally, is it even possible for your credit union to interface its data processing system with an app? Ultimately, that is a question for your data processor. Certainly, if you have a bill pay product now, that sort of thing is possible. Depending on how your data processor handles its products, it may or may not be able to help you in this endeavor. I recently gave a seminar where one of the Credit Unions identified the fact that there data processor actually ran the credit union’s bill pay through ATM processing thus, placing its bill pay service within the new Regulation E changes. Such a bill pay system might have trouble getting linked to an iPhone/iPod or iPad via an app. On the other hand, the system using the ACH process probably would link more easily. The credit union wishing to develop an app should involve its data processor, involve its data processor at the very beginning.
For the right credit union with the right membership base, an iPhone/iPod/iPad app would be a good investment to offer enhanced member services and reach out to potential members.