"What can shared branching do for me, really?" There it is, the million-dollar question, the one we aim to answer everyday. How do I respond? By turning the question around. The real issue credit unions should be focusing on is: What can't shared branching do for me?
Although shared branching has grown tremendously in popularity over the last several years, some credit unions out there still hesitate to implement the concept in their organizations. Perhaps it is because of lack of awareness of the service. Perhaps it is lack of support. Either way, at CUSC, we think shared branching is key in providing the highest level of member service while demonstrating the credit union difference.
Shared branching offers many benefits to both credit unions and their members, and when complimented with other services offered by credit unions, provides a one-two punch other financial institutions can't compete with. Although shared branching benefits are numerous, the true value lies in the utter convenience it offers to modern members who demand from their credit unions a range of locations at which they can conduct their financial business.
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Convenience is the foundation for building the ultimate solid, long-lasting member relationships. Without easy account access, your members will not stick around because they have too many other convenient choices. And although you may offer your members many ways to access their accounts, whether through avenues such as online banking or ATMs, a large percentage still prefer to have the face-to-face interaction only available with physical branches. The importance of branches is demonstrated from the instant credit unions develop relationships with new members, as expressed with one of the first questions posed upon account opening: "Where are your locations?" With 65% of American credit unions only having one branch and 97% having less then 10, this means credit unions may not have the answer new members want to hear unless they participate in shared branching. And what about current members? The extensive geographical reach provided by shared branching gives credit unions the edge their existing members desire. With members scattered all over their home state or the nation, many credit unions find the service allows them to provide branches where their members live, opening doors where they were closed before. Shared branching also accommodates traveling members and helps retain members when they relocate or retire, while attracting members' relatives in other cities and states.
The majority of credit unions lack the economy of scale to add the number of branches needed to give potential and existing members the limitless options they desire. For a very minimal cost compared to brick and mortar expenses, shared branching allows credit unions to give their members access to 2,300 locations nationwide, a number that is growing every day.
Shared branching also makes credit unions a serious threat to the true competition, the banks found on every corner. Ranked sixth in the nation by branches after major powerhouses such as Bank of America and Wachovia, shared branching puts credit unions on a level playing field with those to which they are most likely to lose members.
Some credit unions hold back from providing shared branching because they fear members will be "stolen" by another institution. The fact is, if a credit union doesn't offer the convenience provided by shared branching, members will probably be stolen anyway–by a bank, not another credit union. The numbers paint the true story. The largest credit union in terms of branches in the nation has 200 locations. When compared to the major banks that boast thousands of branches, credit unions are living in a shadow that they must step out of.
With 68% of those surveyed in a recent CUES study choosing a bank over a credit union due to convenience, we see that credit unions must join together and face the competition, banks. Not being desirable is the biggest threat of all, not another neighborhood credit union. Members can see the difference between credit unions and other financial service providers and offering shared branching is sure to help credit unions remain their members' primary financial institutions.
We should be most concerned with losing members from our credit unions to other types of financial institutions. Even though strict rules have been put in place to prevent the loss of members from one credit union to another in the shared branching environment, at CUSC we have never had to take action against a facility for a violation. History has shown that credit unions have acted honorably, steadfastly exemplifying the cooperative spirit that makes us so different from banks. This cooperation, a founding principle of the credit union movement, helps provide the exceptional member experience, and helps credit unions walk the cooperative spirit walk, not just talk the talk.
Getting credit unions to buy into the shared branching concept is a hurdle we constantly work to overcome. Everyone who works in the movement, from frontline staff up to executive management, must see how the service benefits members, credit unions and the movement as a whole. Credit unions must realize that by participating in the network, they are helping grow the movement by keeping member accounts in place.
We hear objections from those familiar with the service and questions from those who are not on a daily basis. The benefits of shared branching seem to speak for themselves, creating champions outside of our organization. By focusing on the big picture and spreading the shared branching message we can complete our objective of providing the most access points for members as possible. Today, 1,300 credit unions in nearly every state give their members the freedom to choose where they want to complete their transactions. Imagine the possibilities if all of America's 8,800 credit unions were to join in.
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