Hickam Federal Credit Union Listened to its Members When it Developed it New Interactive Web Site

October, 2001

When Hickam Federal Credit Union’s Web site went active in July of 1999, many of the financial institution’s members were pleased. Using their personal computer, they were able to order checks on line, fill out loan applications and use one of several on-line calculators to figure out monthly payments or savings rates. However, many other members felt that the site didn’t go far enough.

“From the beginning we got e-mails from our members saying, ‘Great. But when will I be able to access my account?’” says Cheryl Weaver, vice president of marketing at Hickam. “We had built an interactive site but people wanted to do financial transactions over the Web. We got many, many requests.”

And in the non-profit, member-owned world of credit unions, the customer is not only king but boss, too. So Hickam staff went to work almost immediately on extending the services they offered over the Web. After an exhaustive research effort, Hickam officials signed on with Hawaii Impulse Systems (HIS), which was already providing data processing and information technology services for the institution. HIS in turn, worked with California-based Digital Insight to create Hickam’s on-line functions as well as a portal to be shared by a consortium of local credit unions.

On June 1, 2001, Hickam was the first of the consortium to go on line, offering its members the ability to check account balances and transfer funds between accounts and well as pay bills and loans. In addition, the portal, also now used by Hawaii Pacific and Kekaha federal credit unions, offers financial information on insurance, home and auto loans, as well as shopping and investing.

“As soon as we switched it on, we started to get hits,” says Sharon Sakamoto, vice president of finance. “And we didn’t even advertise. After three months, we are averaging about 2,000 hits a week, 3,400 during the pay period.”

Sakamoto says that approximately 1,600 members have used the on-line banking functions of the new Web site, with about 110 utilizing the bill paying functions. Not eBay-like numbers for sure but much heavier traffic than she anticipated at this early stage.

According to Weaver, Hickam Federal Credit Union is in somewhat of a unique position among local credit unions. With 50 percent of its customers in the military, Hickam, the third largest credit union in the state with 28,000 customers and $280,000,000 in assets, has arguably the most widely scattered customer base of any local credit union in Hawaii. Members are shipped across the country and the world constantly with most of them keeping their money in Hawaii. And, until recently, the only link they had with their money was a toll-free number. It is a microcosm of credit unions’ struggle nationally to keep pace with large banks.

While the assets and market share of credit unions has increased in the last decade as savings and loan industry has declined, banks are still gobbling up the lion’s share of the cash and customers. According to the Credit Union National Association, while the overall number of credit unions decreased in Hawaii from 135 in 1990 to 104 in 2000, both members and overall assets increased, from 554,146 to 645,234 and from $2.8 billion to 4.26 billion respectively. However, the CUNA also reports that banks’ market share of total assets rose from 64.1 percent to 78.9 percent over the 1985 to 2000 period, an increase of 14.8 points. Credit unions’ share rose from 3.2 percent to 5.7 percent over the same period, an increase of 2.5 points. At year-end 2000 banks control almost eight out of every 10 asset dollars in the United States. Credit unions’ market share is roughly one dollar out of every 18.

But the widening gap between banks and credit unions was only one of the motivations for developing Hickam’s new Web site. According to Weaver, Hickam wasn’t losing too many customers to the banks but she also believes that the credit union isn’t the PFI (primary financial institution) for some members. She hopes the new Web functions will get more people to use more of the credit union’s services and help retain the few customers they do lose to the banks. However, in the end, Weaver says that it doesn’t matter what other financial institutions—both locally and on the mainland—are doing. It is what the Hickam Federal Credit Union member wants.

“We are owned by our members,” says Weaver. “So it doesn’t matter what other people are doing if that doesn’t fit the needs of our members.”


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David K. Choo