To begin, let’s look at how Online Banking got started. Originally, it was a replacement for dial-up banking or PC banking. At the time, your financial institution would send you a disk or you would call in with a modem and download your transactions. Eventually, some folks had the idea that using the Internet was a much better way and whamo – Online Banking was born. Along the way, an explosion of online banking vendors entered the market. As this market matured they would offer new features and some new add-ons. About ten years ago, the Credit Union I worked at even bought a mobile banking solution. It turns out the market wasn’t quite ready for that. Now it is. In between, Bill Pay came along and the market was ready for it. Huge adoption and stickiness came through getting your online banking members to use your bill pay. The problem though was that bill pay was actually more profitable and stickier than online banking. This perverted the business model and many of the online banking vendors now rely on reseller agreements and revenue shares from bill pay to make the economics work. Ultimately, this leads to stagnation in and poor performance in the root product – Online Banking. You may have even noticed that your Online Banking provider hasn’t offered any new enhancements or features in quite some time, consequently – you may be looking at a change.
If you are looking at a change in 2013 then here are some key things to consider:
Decouple Bill Pay from Online Banking
Just like we expect our Core systems or other Credit Union Technology to allow us flexibility and a sense of openness – we should expect the same from our Online Banking Vendors. Try to pick one that allows you choice so that if your bill pay vendor isn’t competitive you can switch – without giving up the Online Banking.
Understand Where the Market is Going
Sure, Online Banking is still a huge channel for you, but the reality is it is really moving towards mobile. I am not saying that Online Banking will go away – just that it will reduce in importance in the future. Also, understand that your marketing and online banking need to work well together. Not just a marketing message here or there – but your online banking needs to be how you communicate and maintain a relationship with the consumer/member? This means your educational content both in front and behind the scenes need to work together.
Don’t be afraid to Innovate
Lets face it – the big traditional providers aren’t doing much innovative here at all. The new entrants, Jwaala, for example is doing some very innovative things. Don’t be afraid to try new and to identify ways to mitigate the risks of new. Look for ways that couple social media, content marketing, relationship management etc. all through the online channel. Don’t just except access to the account as the standard for online banking. As a member of many Credit Unions, I would really love to see my experience be driven by Online Banking – instead of it continuing (10 or 15 years later) continue to be considered a “channel”.
Focus on the Best – Innovation and Members
Maybe your provider is really good at the look and feel of their site. Maybe they are good at providing some good budgeting tools. Either way – may sure they align with what your “A” or best members would want. Don’t buy a product for your worst members…you don’t really want more of them do you? Once, you have picked a provider for their strengths – figure out how to solve their weaknesses. We have several clients that use our Community Cloud to host Online Banking while using a great innovative provider for the software. Either way – make sure you are getting the best for your best. If all of your “A” members want a specific feature – find a way to innovate and get them that. If you build it for the “A” members you will find more of them…if you build it for the “E” members it may work against you.
Control your Destiny
Put a plan together that combines the strengths and innovation you want. Plan to modify it over time and make sure you have the flexibility to tailor the experience to your customers or members. Unless you want the same junk that everyone else has – I recommend hosting it on your own platform or a Community Cloud so that you can modify or change things up as you see fit. I assume you don’t let the power company change your light bulbs whenever they want – why do you let your online banking provider?
All in all – I am certain you will have a number of people and factors involved in pick a new Online Banking Vendor and by default – a new Online Banking Host. In the end, pick a platform that will meet the performance needs of your best clients.
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