WEST PALM BEACH, Fla. – From disaster recovery benefits to helping offset banks' brick and mortar advantage, shared branching leaders say now is the time for credit unions to take a closer look at how this 25-year old concept can help them. And for those who haven't looked lately, they'll be happy to know there is now a nationwide share branching credit union network at their disposal. This past January, the nation's three credit union shared branching networks – Financial Service Centers Cooperative (FSCC), Credit Union Service Center (CUSC), and Service Centers Corporation (SCC) – joined forces to form a nationwide shared branching network under the umbrella of the Credit Union Service Centers Network, Inc. CUSCNI acts as a single national switch for shared branching among the networks. Although FSCC and CUSC partnered nearly eight years ago, all three networks are equal partners and offer over 16 million members of 900 credit unions branch access at over 700 locations in the U.S., Guam, Japan and South Korea. Though the three shared branching players collaborated to create the national venture for the good of the industry, they still compete with each other. It's up to individual credit unions to evaluate the networks and see which one works best for them. As of June 2002 a total of 93 credit unions have been added to CUSCNI with 63 signing with CUSC and 29 with FSCC. Since banks have CUs cornered in terms of physical locations, shared branching can be the ace in the hole credit unions need to compete with them. "Not every credit union is able to afford to build a branch on every corner. And with members wanting more branches, shared branching seems to be a way to help members while also helping the credit union's bottom line," said FSCC CEO Sarah Canepa-Bang. The concept of a shared branch began over 25 years ago with Southfield, Michigan-based SCC. Reacting to a study predicting a checkless/cashless society for the 1980s, credit union leaders from the Detroit area began thinking of ways to meet the need for more service delivery options. At the time EFT was just beginning to emerge and many credit unions were looking to add branch locations to reach members. In 1975, SCC opened the first shared service center known as a Credit Union Family Service Center. The shared branching network vision continues to be for any member to walk in to any credit union or service center branch in the nation and transact business as if they were at their own credit union. Services available through shared branching include making deposits, withdrawals, balance inquiries, wire transfers, and loan payments; having statements printed; and ordering checks and ATM cards. Post September 11 shared branching is also being touted as a disaster recovery asset. For example, CSCU had XCEL Federal Credit Union set up and running member transactions within a week of its headquarters being destroyed on September 11. SCC also came to the aid of Washington Postal Federal Credit Union, which was forced to vacate its office in Washington, D.C. due to the anthrax scare last fall. According to Canepa-Bang, one of the greatest advantages shared branching offers is leveling the competitive playing field. "In a world where you have a Bank of America on every corner, to say to your members that they have access to over 800 branches around the country means a lot-especially to a $20 million or even $3 billion credit union," said Canepa-Bang. "This is the one tool we have that they don't and it proves that credit unions are different. Field of membership does matter, we do work cooperatively in an amazing way for our members' benefit and we take a perceived risk for better service and members love it." The income potential is cited as yet another advantage. Under the shared branching system credit unions get paid for each transaction. With monthly shared branching transactions averaging 20,000 to 30,000, tellers take center stage as the extra work and increased human interaction rests on their talent. Some credit unions offer tellers incentives per transaction to keep them motivated. Other challenges include the cost of the data processing interface -if needed-which can range from $12,000-$35,000 per side (not per branch) as issuer and acquirer. According to CUSC Vice President of Marketing Communications Craig Beach, to figure out which network will work best credit unions need to understand what each of the three companies can offer from technology to cost. Credit unions then need to decide if they want to be an issuer only or an issuer and acquirer and the costs and advantages associated with each. "Other questions credit unions need to ask about are certifications costs and how much it costs to get that specific system tied into the switch," said Beach. "Then, once those issues are answered take the time to start marketing to members. So although there are not a lot of steps to joining, they are big ones with the data processing system and interfaces being number one." CUSC plans to focus more on technology and look at a new way of connecting and broadening communication. Its latest project called the Next Generation Network is in the beta stage with plans for a January 2003 kick-off. The in-house switch, which is an enhanced ISO8583, has been designed to diminish fraud by providing tellers more information and broadening parameters from flagging a new account to tracking the number of facilities a member has used. "We think this is the future of shared branching and building a more cohesive network," said Beach. "Especially since fraud is huge ordeal around the country and service centers are no different so this can provide a mechanism to help fight it." Five credit unions in Washington state- Spokane Federal Credit Union, Telco Credit Union, Global Credit Union, Numerica Credit Union and Spokane Teachers Credit Union- are gearing up to offer local members this September the ability to make transactions at more than 24 branches operated in Eastern Washington and North Idaho. "This is basically a retention strategy to keep members from leaving us," said STFCU President/CEO Steven Dahlstrom. "We surveyed members who left and 85% said the reason they were closing their accounts was convenience. We are also saving on building branches the next couple of years. Every area we looked into building a branch was across from another credit union so for us shared branching really made sense and now we've got 24 branches to serve members instead of the seven we currently offer," said Beach. 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