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Agnes DeBlasio
Agnes DeBlasio
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A Tale of Two Credit Unions

Delta and Motorola credit unions adapt online banking services to a wireless world.

Delta and Motorola credit unions adapt online banking services to a wireless world

Two credit unions are providing free access to home banking via mobile consumer devices, the latest ploy for retaining their online customers.

Next month, Delta Employees Credit Union (DECU), Atlanta, will offer wireless banking to its 165,000 members. Since launching its home banking product in 1996, the credit union has 43% of its members banking online. The move to add wireless access was a natural next step to help retain its members-active, retired and former employees of Delta Airlines.

"Our membership base is very technology-savvy and we need creative ways, using technology, to deliver our products and services," said Todd Marksberry, senior vice president at $1.9 billion DECU.

"Every time one of our members, especially pilots, comes off a plane, it is typical for them to reach for their cellular phone, PDA or pager located in their pocket or belt loop," added Marksberry. "This is a nice niche to jump into due to our customer base which is obviously up on cutting edge technology."

DECU is partnering with Atlanta-based Air2Web, which provides wireless channel delivery via a bridge that sits over a Web site's business logic. Consumers will use digital and WAP (wireless application protocol) PDAs (personal digital assistant) including iPacs, and two-way pagers to check account balances, transfer funds and review account histories.

DECU and Air2Web are creating the Web-based XML interface to the credit union's back-end platform to allow the transactions to occur. Members will be encouraged to sign up for the service on the home page,, and click on a wireless banking icon to register their device.

"Once members are authorized, they can conduct transactions immediately," explained Marksberry.

DECU expects an initial adoption rate between 3% and 4%, which is in line with industry averages. "Within a year our goal is to have between 10% and 15% penetration, and that could be modest," Marksberry said.

Scottsdale, Ariz.-based Motorola Employees Credit Union-West, with $500 million in assets and approximately 56,000 members, began offering wireless access in March.

Although many of its members are mobile, it was a few simple questions on a consumer survey that opened the institution's eyes to the possibilities of mobile account access.

"We were aware that there was wireless activity going on in the industry, but the high responses from our members that they would be interested in mobile banking made us more aware," explained Lenore Froehlich, vice president of marketing and training at MECU-West.

More than 86% of MECU-West's members have a PC at home with Internet access, and 33%, or approximately 20,000 members, are enrolled in the home banking product.

"Since they travel frequently, often with a two-way pager, PDA or cellular telephone in hand, their interest in wirelessly accessing their personal finances garnered a high positive response," Froehlich said.

Digital Insight, Calabasas, Calif., which provides MECU-West's home banking platform, is working with Air2Web to add wireless connections. Consumers can electronically access accounts via a WAP or text-message cellular telephone, PDA or digital pagers.

MECU-West has achieved a penetration of 3.3%, or 630 wireless users-including approximately 200 to 250 members relying on PDAs-to view account balances, transfer funds and receive threshold alerts of accounts that fall below established balances.

"We hope to have a 4.55% penetration, or at least 1,000 users by the end of the year," said Gary Bernard, vice president of member services at MECU-West.

The typical wireless user performs an average of five transactions a month. That translates to a cost to MECU-West of $1.25 or $1.50 per transaction versus the higher cost of processing a transaction conducted by a teller in a physical branch.

Members sign up for the service through the credit union's home page, Under "Online Services" they enter their member number and password and are directed to a wireless banking icon. Next, consumers register their device by scrolling through a robust graphical listing that displays all acceptable makes and models of personal devices.

Once the device is authorized, Digital Insight establishes an alias specific to the customer and device. Then via the OFX (Online Financial Exchange) protocol, the information is linked to the individual's accounts. All information is stored in a centralized database.

As consumers conduct transactions, requests are converted to encrypted messages that pass through gateways which in turn translate them into Web transactions. Transactions are applied to a stored template that matches the device and alias to the individual's accounts, then are completed electronically and information is digitally transmitted to the device.

PDAs and WAP phone users simply download the Web page from the browser and bookmark the wireless banking link. All data is pushed through an electronic gateway. Cell phone users, however, must store specific telephone numbers into their speed dial memory to conduct requests. As the number is dialed, the user is prompted to enter a PIN, enter a request, and hang up. The message is sent through the gateway, then information is gathered electronically and pushed through to the phone in an SMS text-messaging format. All devices receive information within 30 seconds or less.

DECU has a similar enrollment and transaction process.

MECU-West plans to push additional information to wireless devices including loan applications, ATM locations and branch locations. There is no set date for the additions.

DECU has visions of taking its loan approval process directly over consumer wireless devices. Marksberry explained, "Imagine being out with your spouse at a car dealership and wanting to buy a car. You pull out your wireless device, apply for the loan in real-time, and you are approved on the spot, and asked where you want the money transferred. After entering your choice on the device, in this case your checking account, you can hand your debit card to the person who processes the car sale."

While there needs to be preparation in regard to legislation and electronic signatures for this to evolve, DECU plans to begin researching the opportunity within a year.

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