The Impact of Internet-Based Services on Credit Unions : A Propensity Score Matching Approach

Credit unions focus their profit management on providing benefits to their members and augmenting their institutional well-being through capital accumulation. In this study, we investigate the changes in benefits to borrowing and saving members around the adoptions of transactional websites by credit unions for the period of 2000-2009. Using the propensity score matching method, we show that credit union adopters offered borrowing members a better interest rate than non-adopters immediately after the recession of 2001-2002 and a similar rate when economy rebounded. Our results indicate that transactional websites offer credit union members more convenient services with no negative impact on the interest rate on deposits. The results are robust to different definitions of internet-based services non-adopters and different models used to estimate adoption probabilities