CUSB Misconception: Existing Branch Network is Convenient and Sufficient
A recent CO-OP Financial Services white paper is debunking myths about Credit Union Shared Branching. Here is an exert from the white paper that address the seventh and final misconception: Existing Credit Union Branch Network is Convenient and Sufficient. Hear what fellow Missouri credit union representative Tony DiGiovanni has to say about the issue.
Misconception Seven: Existing Credit Union Branch Network is Convenient and Sufficient
While some credit unions have multiple branch locations within a given region, the way members define “convenient” has drastically changed over the last decade. Aside from travel, emergencies and moving, this trend is especially true for the Gen Y demographic, whose members are accustomed to speed and ease-of-use delivery channels and expect the same from their financial institution.
Credit unions of all sizes are taking a serious look at member age and convenience issues in hopes of closing the gap. Georgia’s Own Credit Union, with 177,485 members and $1.7 billion in assets, has a large proprietary branch network of 25 locations throughout the state of Georgia. Despite this uncharacteristically large footprint, the credit union supports shared branching.
“This group [Gen Y] of people needs a wide variety of channels. They want it all. In our experience, we find that if we put it out there, they will use it. This includes branches among other things,” says Vice President of Branch Services, Kathy Igou. “We also hoped this would help us see an increase in credit union membership statewide. As far as we were concerned, it didn’t matter what credit union the member belonged to. As long as it wasn’t Bank of America, we were happy.”
For those members who might be traveling or on temporary work assignments, the convenience of a shared branching network is essential. “We have had members who have been out of town and lost their debit card and we sent them to a shared branch and they were able to get cash so their vacation wasn’t ruined,” said CSD Credit Union’s President Anthony DiGiovanni. “Also, instead of wiring money and incurring a $25 fee to the member, we have advised them to go to a shared branch to get the cash.”
An ancillary misconception is that a credit union membership is “all local” and therefore doesn’t require a large branch network; however, members routinely leave the area on vacation/business travel or for personal emergencies. And then there is bad weather and natural disasters such as the recent Super Storm Sandy that left the Jersey City, New Jersey-based Liberty Savings Federal Credit Union without power for one week, along with countless other regionally impacted credit unions.
The Credit Union National Association reported that since Bank Transfer Day (2011) approximately 1.9 million consumers switched from banks to credit unions. While this is a positive indicator, credit unions must ensure that existing members’ needs are met. Additionally, migrating banking customers accustomed to the benefits of a large branch network come with high expectations. It is for this reason, and the aforementioned, that a “local” mindset will not suffice in the new competitive financial institution landscape.
“Being a part of the shared branching movement has always been beneficial to us. We have members located throughout the states; so this movement has really let our members keep their accounts even after moving away from our area,” said Pinnacle CEO’s Lisa Williams. “We have several members in Tennessee that have always called to get a check sent to them; however, now we tell them which service center is closest to them so they may receive their funds immediately. The Human Resources person of the SEG in Tennessee even called us and said that if we gave her the information, she would put it in the employees’ pay stub envelopes so everyone would be aware of the location.”
Click here to read the entire white paper.
Click here to learn more about Shared Branch.