Credit unions are still mailing out a significant number of paper statements despite years of effort to nudge members to electronic statements.
Up to 80% of members at some credit unions are still opting for paper statements. The reasons for this reluctance vary, making it difficult to get members to switch, according to companies that distribute both paper and e-statements on behalf of credit unions.
But some credit unions are taking action, such as charging fees for paper statements or highlighting the benefits to the environment of e-statements, to encourage members to go digital.
“People have been hanging on to paper,” said Thomas McGahey, CEO of High Cotton, an Irondale, Ala.-based firm that designs and produces documents for financial institutions. “Credit unions would like to save on that postage, but members have been reluctant to do so.”
The estimates vary on what percentage of credit union members receive e-statements. McGahey said that some of his company’s clients have less than 30% of their members on paperless statements.
Kelly Warfel, national sales executive for Diamond Communication Solutions, an OSG Company, in Ridgefield Park, N.J., said the norm for electronic adoption rates for most credit unions seems to be about 50% but the number can range from as high as 70% to as low as 20%.
Both McGahey and Warfel noted postage is the biggest cost component to producing and distributing paper statements.
“For a larger financial institution, that can amount to quite a bit of money each month,” McGahey said
There are a number of reasons that members resistant switching to e-statements. Among the most frequently cited is members, especially older demographics, are used to paper statements. Members also say they fear missing an electronic statement in the noise of their inbox, getting a paper statement is helpful for remembering to pay a bill, and a paper statement is easier to organize and review charges on a monthly credit card statement.
How much marketing a credit union has invested in promoting e-statements makes a difference. The robustness of a credit union’s online and mobile banking can also influence the member’s decision.
Carrots and sticks
There are a number of ways that credit unions can encourage their members to switch. Warfel said she has seen more credit unions trying to speed up the shift from print to electronic delivery in recent years by charging a monthly fee for print statements as a deterrent.
But that method can also alienate some members, said McGahey, who noted some large banks experienced customer backlashes after taking this approach.
“We recommend more of a carrot approach than a stick,” McGahey said.
PSECU in Harrisburg, Pa., is one credit union that has tied switching to e-statements to a more positive message. The $5.3 billion-asset credit union has spent the weeks leading up to Earth Day on Monday telling its members they can contribute to environmental sustainability efforts by opting out of paper.
Jodi Lynne Blanch, chairman of PSECU’s board, sent a statement to the credit union’s members noting paper statements average four pages, meaning by opting for e-statements members can each save approximately 48 sheets of paper a year.
Blanch said in a press release that about 195,000 of the institution’s members received e-statements but that it still mails out nearly 255,000 every month. If all members went digital, that could save more than 12.2 million sheets of paper annually, she added.
“By making small changes to our lifestyle, we can all contribute to protecting the environmental health and vitality of the communities we share,” Blanch said in the release. “Selecting to receive electronic communications rather than print alternatives, whenever possible, is a perfect example of how that can be done.”
Blanch also reminded members that cost savings realized by such a switch would be reinvested by PSECU to better serve its members and its local communities.
While PSECU has offered the e-statement option for years, a spokesperson said 2019 was the first time it has reached out to its members on a large scale about proactively opting in to e-statements.
The credit union said in addition to a press release that went out the first week of April, Blanch’s message was shared with members via email, in its quarterly newsletter, on its social media channels, on digital signage in its physical locations and in all monthly account statements. In addition, PSECU staffers will be on hand at an Earth Day festival in Mechanicsburg, Pa., to encourage members to make the switch from paper to electronic statements.
Another positive motivator could be offering members a small cash award for switching McGahey said. But this could be costly upfront while the credit union waits to recoup that money through expense savings, he added.
Another practice is to tie the e-statement opt-in as part of signing up for online banking. This can work as long as the e-statement user agreement is presented.
However, Warfel said some credit union compliance officers view this as non-compliant with e-signature legislation because e-statements could become an “opt-out” service instead of an “opt-in” service if a member wants online banking but not e-statements.
Regardless of what strategy a credit union tries, it is difficult for a CU to keep all members happy, McGahey warned.
“The credit union is just going to have to realize there is a certain percentage of the population that is not going to switch and it is just a cost of doing business,” McGahey said. “Members want to receive their statements the way they want to receive it. It all boils down to member relations.”
