Web Services CUConferences March 2011

www.rtefs.comwww.rtefs.com

WEB SERVICES:

It is not IF,

it is WHEN!

Spring Training Conference 2011


Agenda

• Survey

• Technology Today

• The Market

• Web Services


Target Field


Survey

• How many have a web service at the credit union today?


Technology Today

• 2010 – Est. 10% to 12% of Financial Institutions offer web account opening (Javelin)

• May, 2010 – Javelin Report – 1400 Financial Institutions offer web account opening

• 2011 – 25% of all software will be delivered as “Software as a Service (SaaS)” – Gartner Group


Lieberman Research July 2010

• Total Institutions Surveyed 46% evaluating online applications today

63% plan to implement by 2012


Lieberman Research – July 2010

• Credit Unions 82% somewhat or very familiar with technology

20% of mortgage applications taken online today

31% of mortgage applications expected to be taken online by 2013


The Market Today


Members


Credit Union Membership

• 1980 – 43.9 million

• 1990 – 61.6 million

• 2000 – 79.8 million

• 2010 – 91.4 million


U.S. Census Bureau Predictions

0

5

10

15

20

25

30

<5 10-14 20-24 30-34 40-44 50-54 60-64 70-74 80-84 90-94 100 +

2003 2025 2050


Where to look for Growth?

• Average age of credit union member is 47 (CUNA Mutual Group)

• USSCO Federal Credit Union lowered the average age of its membership base from 45 to 38 by implementing youth and junior services programs. They invested in technology to provide the speed and convenience demanded by younger members.


Why Web Based Banking?


(negative) Economic Factors

• Outside forces impact on your bottom line: Share insurance

Corporates

Overdraft services

Interchange fees

Regulatory costs


Implementation Reasons

• Better serve borrowers

• Efficiency

• Wave of the future

• Increase volume


2011 WEB SERVICES

Is it the same as Online Banking,

Or is it MORE??


Strategic Direction

• Online Banking – Convenience for the member

• Web Services = GROWTH + EFFICIENCY


Online Banking vs. Web Services

• Online Banking

• Account Transfer

• Balance Lookup

• Pay Bills

• Account history

• Online statements

• Web Services

• Gain new members

• Gain new loans

• Cross sell

• Cost reduction

• Marketing

• BSA/AML


Cross Selling ROI


Cross Selling ROI Annual Number of Loans Processed 3,000 Annual Number of New Relationships Processed 1,500 Values of Fields in Green Can Be Adjusted By You

Tangible ROI

Cross Selling Success Projections

Additional Revenue

Anticipated Increase in Loan Volume 5% $150,000.00 Average Income per Loan $1,000.00

Anticipated Increase in Loan Revenue from New Relationship Transactions 5% $75,000.00

Average Income per Loan $1,000.00 Consumer Protection Products/Insurance Participation Anticipated Increase in Loan Insurance 5% $22,500.00 Average Income per policy $100.00 New Consumer Acquisition via Xpress Accounts Additional Consumers via Online Channel 150 $75,000.00 Ave Income per Consumer $100.00 Average Length of Relationship 5


Cross Selling ROI

Reduced Labor and Processing Costs Current Time to Process New Loan 35 $20,625.00 New Time to Process New Loan 10 $8,250.00 Current Time to Process New Consumer 35 $10,312.50 New Time to Process New Consumer 10 $4,125.00 Average Cost of Labor with Benefits $16.50 $18,562.50Reduced Systems & Administrative Costs Integrated Member "Switch-Kit"

Integrated Mortgage and Business Lending Module

Robust Reporting Capabilities Paperless Workflow Costs Savings


Cross Selling ROI

ROI Income/Savings $322,500.00At $8 Per Application Annual System Cost (based on projected volumes) $39,000.00 Bottom Line Net Revenue Gain from LoansPQ $283,500.00

Number of Cross Sold Loans Needed/Month to Cover System

Cost 3.3


Account Opening


Disclosures


Data Collection


Identity Verification


Funding


Switch Kit


LENDING


Collateral Information


Borrower Information


Financial Information


Cross Sell


Cross Sell


MARKETING


Creative Customization


Creative Management



Customized Creative


Process Changes


Different Goals

• Yesterday

• Complete the process

• Collect the funds

• Meet all of the requirements

• Today

• Grow the membership, deposits and loans

• Cross Sell

• Become a trusted advisor


Yesterday’s Process

• Stand Alone Personal Computers

• Networked Personal Computers

• Web Applications Print and Submit

Complete and Submit

• Paper and Physical Signatures


Today’s Process

• Web Banking Member data collection

Product selection

Member verification

Funding

Paperless

• Signature Key Pads

• E - Signature


Credit Union Benefits



• Growth through: Web applications – available when your member

needs them

Generation X and Y – Doing business in a manner familiar and preferred by them

Trusted advisor – helping your member improve their financial position

Cross selling – guaranteed, period!



• Productivity Gains

• Cost reductions

• A system that pays for itself


Real Life Example

• Louisiana Federal Credit Union, LA. 2004 to 2009 – tripled its mortgage volume

2 person staff – no increase in staffing

Web based application


THANK YOU

Gary Hess

President, RTE Financial Services

1-320-281-9765

[email protected]

www.rtefs.com

Web Services CUConferences March 2011

Economy & Finance

member web services

web account

market web services

web based banking

new time

new members

online applications

credit union membership