Serving the Underserved: Mobile Could Be Key
By Roy W. Urrico

Financial institutions should look to the 17.5 million people who are underbanked as a potential market in light of its size, demand for financial services, and demonstrated willingness to embrace mobile technology.

So says a white paper by the Chicago-based Center for Financial Services Innovation (CFSI), "Mobile Financial Services and the Underbanked: Opportunities and Challenges for Mbanking and Mpayments Innovation."

Unlike consumers with multiple payment and banking options, underbanked consumers could do most of their transactions on mobile phones if presented with attractive, secure, and accessible mobile banking products.

"For underbanked users of mobile financial services, the ability to easily load money to their phones may prove as important as the ability to spend and transfer funds," suggests CFSI.

People without bank accounts or credit cards--the most common sources of funds for existing mobile financial services platforms--will require alternative load mechanisms.

Options might include direct payroll deposit, designated kiosks or "reverse ATMs" that accept cash, point-of-sale loads through partnerships with retailers, or solutions that "ride on the rails" of existing financial infrastructure, such as prepaid load networks.

Technology providers are looking into other ways of reaching the underserved. "We're researching ways of providing bill pay to the unbanked," says Dave Selina, president of industry products for IntegraSys, Frisco, Texas. "The underserved market is always a challenge. In America today, the Latino population represents a huge opportunity for credit unions."

To succeed with this market, credit unions must understand the culture and make Hispanics feel welcome.

"The first step in that strategy is to literally speak the language," Selina continues. "Not long ago we added a multilanguage option into our product and made a Spanish version available. We're now positioned to support other languages as market needs arise."

Court to rule on record of chartering decisions

A federal district court judge, in action sought by NAFCU and other credit union parties, denied bankers’ request for discovery in a suit targeting NCUA’s approval of three community charter conversions and said a ruling will be made based on a review of the administrative record.

“With discovery out of the way, the path is clear for the court to reach a final ruling,” said Carrie Hunt, NAFCU’s director of regulatory affairs and senior counsel. “We are confident that NCUA satisfied the law in approving these charters.”

The suit, filed by the American Bankers Association and other banking interests, focuses on the NCUA Board’s decisions to grant community charter conversions for Members 1st FCU, New Cumberland FCU and AmeriChoice FCU, leaving the three with the same field of membership in Pennsylvania. ABA’s request for discovery seeks to evaluate whether the agency board considered all relevant material in granting the charters, but the court replied that, whatever gaps may exist in the record, they “do not frustrate effective judicial review.”

The record of these charter approvals, the ruling states, spans seven volumes and more than 2,000 pages, including the community charter applications, board action memoranda and transcripts of the meetings in which the board approved the applications. “Absent a clear showing that the ‘information base’ that the agency relied upon was materially different than the record submitted to the court, the [Administrative Procedures Act] prohibits discovery,” wrote Chief Judge Yvette Kane.

The court also rejected the bankers’ request that the court review the charter approvals for procedural problems given that the bankers did not specify in what manner they fell short. Kane said the court will review the agency’s decision based on the record presented to the court.                

A WeB-Site for Sore Eyes? Map Out a Redesign
By Cathy Fleming

Value 'high-priced real estate'

Get your information technology (IT) department's input and support on Web site security, and ask for other departments' input. However, don't let them be the final decision makers. Compromise and be flexible. Your Web site is a work in progress.

Hire an experienced Web design firm to design your site's layout. If you don't have a large budget, you can have the company lay out the home page and style sheets at a fraction of the cost--well under $5,000.

Don't use too many images, too much text, or too many links that are distracting on the home page. Don't advertise every product and service on your home page. Be selective, and keep what you want members to know about on your home page. Use the home page as "high-priced" real estate.

Don't allow too many cooks in your kitchen. If you ask for opinions, you'll get opinions, so be prepared. Let the marketing department drive the Web site and its content.

Each time we have a new marketing campaign, we update our home page with fresh campaign-related images. We've expanded our career opportunities section, and our human resources department estimates about 50% of new hires come from this section.

Mouse monitoring offers insights
A Web site redesign is a multipart process. We survey members quarterly, and we have a team that interprets the responses. This online feedback is the basis for a site review and redesign, but we also partner with a company that conducts usability studies for us and then helps us with the site architecture.

The study involves conducting a focus group of 40 to 100 members to understand their patterns and behaviors. We'll bring members into an environment where we can observe them, talk them through a script, and have them do an activity, such as opening an account online.

We videotape and monitor their mouse activity so we can analyze it later.

Then, the company will come back to us with a formal assessment and report. Using that information, we'll make changes to our site in the areas of design, functionality, and aesthetics. It gives us the benefit of having relevant, first-hand knowledge from our members.

Probably the most substantial change we made during our last Web site review was allowing members to log on to our home banking application directly from our home page. Previously they had to click twice and go beyond the main page before they could log in.

At the time of our redesign, we also were rebranding the credit union. Refreshing the Web site was an element of that.

Frank, Royce say key CURIA provisions should pass

House Financial Services Chairman Barney Frank, D-Mass., told NAFCU’s Congressional Caucus he is optimistic that major provisions of H.R. 1537, the Credit Union Regulatory Improvements Act, could become law.

Frank told the group there will be a hearing addressing CURIA, though he did not say when. He also said that, while the legislation will not likely become law as is, large portions of the measure could clear Congress. “My estimate is that we could get a bill signed into law with much of what you want,” said Frank.

The lawmaker also touted credit unions against the backdrop of subprime mortgage troubles. “If only regulated institutions, like credit unions, made home mortgages, we wouldn’t have had a subprime crisis,” he said.

Regarding credit unions and the Community Reinvestment Act, Frank noted a movement among lawmakers to delve into the issue. He said it’s too early to say that no credit union will have to deal with CRA requirements, but he said the credit union community is already doing what CRA requires. “If every financial institution operated like a credit union, we wouldn’t need CRA,” he said.

Rep. Ed Royce, R-Calif., chief Republican cosponsor of CURIA, told Caucus participants that the present number of CURIA cosponsors is something to celebrate. He encouraged those present to continue their grassroots efforts to gain more support for the bill.

On risk-based capital for credit unions, Royce said critics would have to find new reasons to oppose this since many of them would be attacking their own framework.

Rep. David Scott, D-Ga., said credit unions should prioritize what they want in a final bill and tell Congress. He also said a larger financial regulatory relief measure could clear and that elements of CURIA could be part of that.