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While crystal‐ball gazing is never the best way to formulate business strategy, an understanding of present trends and future possibilities can help meet challenges. As Credit Unions change for bl h l h ll d h f the future, they need to prepare for a competitive marketplace by transforming processes and infrastructure, and most importantly, their thinking. The Credit Union of the future must have a networked IT landscape, increased automation, niche products and better understanding of customer needs to succeed. better understanding of customer needs to succeed
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Gen Y / Millennium Generation Just beginning to enter the workplace, The Millennial Generation (or Gen Y) was born between 1977 and 1998. The 75 million members of this generation are being raised at the most child‐centric time in our hi i b i i d h hild i i i history. Perhaps it's because of the showers of attention and high expectations from parents that they display a great deal of self confidence to the point of appearing cocky. As you might expect, this group is technically literate like no one else. Technology has always been part of their lives, whether it's computers and the Internet or cell phones Th They are typically team‐oriented, banding together to date and i ll i d b di h d d socialize rather than pairing off. They work well in groups, preferring this to individual endeavors. They're good multitaskers, having juggled sports, school, and social interests as children so expect them to work hard. This is also the first generation of “Everybody Gets a Trophy”– thus leading to their need to be rewarded for participation rather than achievement, which fuels their love of rewards. hi hi h f l h i l f d plantemoran.com
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Gen Y / Millennium Generation Credit Union’s most loyal members are their oldest members, while Gens Y and X are the members of the future.
They’re also the least loyal and hardest to please, according to a recent Maritz® Poll.
Generation Y‐ers, the oldest of whom are just in their mid‐20s, will soon become the industry’s most sought‐after member. But attracting these members is a marketing puzzle since they combine a comfort with technology with a continued reliance on branches and in‐person interaction.
As far as credit unions are concerned, Generation Y isn't q quite ready for prime time. But y p they will be in another decade or so, and therein lies the dilemma: how to attract and service a member base that has lots of potential, but currently does little to bolster the institution's profitability.
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Technology Innovation We all know about mobile banking, but the future holds much more than just checking balances and paying bills via mobile phones.
Text Messaging Social Networks
How can we stretch our imagination to predict technology trends beyond what we know now? what we know now?
Millennium Generation Google Apple
History shows us that the answer lies in today’ss technology trends and the in today technology trends and the users using it
S Second d Lif Life Data Security & ID Theft
… or tracking your kids behaviors
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Mobile Technology
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In 1998 Who Would Have . . . …predicted that in 10 years, Google would be the fastest growing advertising media companies? fastest growing advertising media companies? In 2007, the year‐over‐year growth of revenue on Google.com (US) — approximately $2 billion — was more than twice as much the growth of ad revenue in all of the next 5 offline media companies (i.e., Time Warner (TWX), Disney (DIS), Viacom (VIAB), CBS (CBS), and Clear Channel) 3rd Qtr 2008 ‐ Google revenue up 18%: Google has posted a revenue of $5.70 billion for the quarter ended December 31, 2008. In a time when many forms of traditional media such as print are seeing a decline, Google is out performing many of its competitors . These results equate to an increase of 18% compared results equate to an increase of 18% compared to the fourth quarter of 2007. plantemoran.com
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stretch your minds on how current technology will evolve …
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Innovation It doesn’t happen as a single event. It is a collection of events, issues, needs, and opportunities. pp
Cash ‐> Checks ‐> Credit Cards ‐> eMoney
Mainframes ‐> PCs ‐> Servers ‐> Networks ‐> Internet ‐> Mobile
Messengers ‐> Letters ‐> Phones ‐> e‐Mail ‐> Text Messaging g g g
Increasing pace and rate of change
Adoption times are shrinking
Took 38 years for radio to reach 50million users, Intenet Took 38 years for radio to reach 50million users, Intenet got there in 5 years, mySpace got there in 5 years, mySpace got got there in two,.
Wild cards (i.e., Facebook) Need vs. Emotion
Just meeting a need doesn’t guarantee success. Understanding a consumer’s passion, frustration, ease, etc., can improve your adoption rates
In the beginning, it might not have an economic value g g, g
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Trend 1: Mobile Banking g Mobile Phone Technology By 2010, 35 percent of online banking 5 f l b k households will be using mobile banking, up from less than 1 percent in 2007 p 40 percent of Generation Y indicates that mobile financial services will be a factor in their choice of financial institution. (source: Celnet)
Text Messaging
76% of tweens use instant messaging as their main method of staying in touch with friends y g online
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Mobile Technology gy – What’s Next Coming Soon:
Payments / eWallet
Confirmation
Location marketing
Text Alerts
Text your account for balance, Text your account for balance, transaction history, due dates, etc.
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Mobile Technology – What What’ss Next Stretch your mind:
Call your ATM
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Patent 7,040,533 enables mobile devices to interact directly , , y with an ATM and a bank system to allow a customer to order cash withdrawals from a mobile device.
Patent 7,207,477 enables mobile devices to be used in a checkout or bank environment to make payments using secure electronic checks. secure electronic checks.
Patent 7,201,313 enables a bank network to receive wireless communications from a mobile device, including a customer's bank account number and account cash value. This patent defines how a wireless device can "communicate" with a bank network to dispense cash and assess a customer'ss account for network to dispense cash and assess a customer account for the value of the cash dispensed.
Patent 7,150,393 enables bank ATMs to communicate with mobile devices through a cellular network or other wireless methods. This application could also allow two or more customers to simultaneously conduct transactions with an customers to simultaneously conduct transactions with an ATM.
Patent 7,025,256 enables a user of a wireless device to interact with an ATM by using the wireless device's display and keypad instead of the display and keypad on the ATM.
TECHNOLOGY TRENDS IN BANKING • TECHNOLOGY TRENDS IN BANKING TECHNOLOGY TRENDS IN BANKING • TECHNOLOGY TRENDS IN BANKING
Mobile Technology – What What’ss Next Stretch your mind:
iPhone Apps going beyond mobile banking
Financial Apps
ATM Finder
SplashMoney ($9.99) SplashMoney is another mobile checkbook that allows you to track different account types: checking, savings, credit card, cash, asset, liability, money market and line of credit. You can create a budget and track and analyze your spending with customizable reports and charts.
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Trend 2: Social Networking g Facebook / MySpace Three times more credit unions have a h d h Facebook site than banks LinkedIn, Tagged, Plaxo LinkedIn Tagged Plaxo In October, MasterCard and Citizens Bank had 293,000 and 960,000 unique visitors respectively and received 3,700 and 4,300 referrals directly from LinkedIn respectively.
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Social Networks — What What’ss Next
Coming Soon:
Encourage employees to use LinkedIn & Facebook / mySpace
LinkedIn profile
Start a Facebook account for your institution
Actively participate in your local community Facebook site
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Social Networks — What What’ss Next
What can we learn:
MSU graduate makeover contest
We are hiring We are hiring
Tax preparation 2009
Teaching kids about finance g
College savings comparison program
Special promotions for graduates
Photos
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Social Networks — What What’ss Next
Stretch your mind:
Facebook Banking
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MyMoney is an innovative banking application built on Facebook for Credit Unions. Fiserv d l developed MyMoney dM M to enable Facebook bl F b k users to search for and join a credit union and manage their funds via the familiar Facebook interface. Using MyMoney, they can view account balances, history and transfer funds right from their Facebook profile, with multiple layers of security protecting their data and accounts. Developed to reach younger members and potential members where they spend time online. So far 37 credit unions are using MyMoney, and 1,200 Facebook users have signed up to use it.
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When a member adds MyMoney™ to their Facebook page, their friends will be notified and given the opportunity to also join your credit union right then and there, giving you yet another way to reach this growing audience.
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Social Networks — What What’ss Next
Stretch your mind:
Blogging
Verity Credit Union started blogging in late 2004
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Social Networks — What What’ss Next
Stretch your mind:
Twitter
Follow the Credit Union / or key employees
Twitter is a free social networking and micro‐ blogging service that enables its users to send and read other users' updates known as tweets. p Tweets are text‐based posts of up to 140 characters in length which are displayed on the user's profile page and delivered to other users who have subscribed to them (known as followers). Senders can restrict delivery to those in their circle of friends or, by default, allow anybody to access them.
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Social Networks — What What’ss Next
Stretch your mind:
Twitter
Follow the Credit Union / or key employees
Table: Banks and Credit Unions using Twitter (updated 16 March 2009) (Source: Net Banker) Name
Updates
Followers
257 557 4 50 194
2,058 1,486 548 451 319
6. MSU Federal CU (7) /msufcu
180
270
7. Chase 8. Pioneer Credit Union 9. 1st Mariner Bank 10. Group Health CU
11 225 140 353
260 251 227 219
1. Wachovia (Wells Fargo) 2. Bank of America 3. Wells Fargo (3) 4. ING Direct (6) 5. North Shore Bank 5. North Shore Bank
Twitter URL www.twitter.com/? /wachovia /bofa_help /wellsfargo /ingdirect /northshorebank /chasebank /pioneercu /1stmarinerbank /ghcu
The study of 1,176 tweets created by 63 financial during the period of March 1 to 30, 2009, revealed that the Twitter usage varies greatly among organizations. National banks posted an average of 53 tweets per month, followed by credit unions with 22.5 and community banks with 8.4. The regional banks analyzed did not make any tweets during the sampling frame. Most active Twitter accounts in the month of March 2009 were: • Bank of America’s David Knapp (@BofA_help) with 199 posts • Group Health Credit Union’s Shannon Perry (@ghcu) with 171 posts • Wachovia Bank (@Wachovia) with 124 posts • 1st Mariner Bank (@1stMarinerBank) with 106 posts • CU Community Credit Union’s Jenny Reynolds (@mycucommunity) with 60 posts • Pioneer Credit Union’s Michelle Kozak (@pioneercu) with 54 posts Source: William Mills March 2009
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Social Networks — What What’ss Next
Stretch your mind:
Social lending
Social lending sites connect individual lenders and borrowers through a peer‐to‐peer network that is streamlined, efficient, legally formatted, profitable, and li d ffi i l ll f d fi bl d most importantly ‐ helpful. Social lending sites provide an opportunity to reduce loan rates and loan costs for borrowers and provide a rate of return for lenders which may beat investment alternatives.
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Trend 3: Virtual Worlds Second Life (abbreviated as SL) is a Virtual World developed by Linden Lab that launched on June 23, 2003 and is accessible via the Internet. A free client program called the Second Life Viewer enables its users, called Residents, to interact with each other through avatars. Residents can explore, meet other residents, socialize, participate in individual and group activities, and create and trade virtual property and services with one another, or travel throughout the world, which residents refer to as the grid. which residents refer to as the grid.
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Trend 3: Virtual Worlds The Teen Financial Literacy Education Game is a financial literacy education game that teenagers can play in the Second Life 3‐D online virtual world. It was jointly developed by the VITAL Lab at Ohio Uni ersit Members United Corporate Federal Credit Union, and Filene Ohio University, and Filene Research Institute. The objective of the game is to learn how to manage one's finance throughout his or her lifetime in a simulated environment.
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Generation X / Y / Millenniums
Connecting with them:
Communication Methods
Rates / Fees Rates / Fees
Facebook / LinkedIn / LinkedIn
Rewards Program
Text Messaging
Referral Fees – Facebook referral program
Blogging
Twitter
Location / Convenience
Internet Banking
Mobile Banking
Physical Location h l
Banking Counselor
Person they can call upon
E l i h Explain the various products i d
Education vs. Marketing
Branch Experience
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What else . . .
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BillMyParents…. BillMyParents The service is primarily designed for kids to shop online. They select what they want, then at checkout, redirect the bill to their parents via an email alert to PC or mobile phone. Parents login and complete the payment process at their convenience using MasterCard, Visa, or Discover Card
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Th k You! Thank Y ! Raj Patel, Partner Plante & Moran,, PLLC Raj Patel, Partner 248.223.3428
[email protected]
You can download today’s presentation at http://www.plantemoran.com/Industries/FinancialInstitutions/CreditUnions/
