In the Digital Age, Shared Branching Stands the Test of Now

While in the future, credit union branches may look and function very differently than they do today, the fact is that branches continue to hold tremendous value for consumers.

In fact, research published by the ABA Banking Journal found that almost one in five banking customers – a full 18% – “still use their bank branch most often to access their bank accounts … [and] banking in person at branches has consistently maintained its appeal to a large number of people.”

Another ABA study also bears this out. The association reported 87% of survey respondents “say it’s important to have a local bank branch easily accessible from their home.”

While branches are among a financial institution’s most valuable assets, the challenge for many credit unions is to meet and exceed the expectations of an increasingly digital/mobile consumer in the branch.

Following a branch transformation strategy is clearly a high priority today for modernizing the branch experience. Still, many credit unions struggle to determine what kinds of innovations to embrace while finding rapid, sweeping technological and operational changes difficult to implement on their own.

So, what exactly do consumers expect from branches today, and how can credit unions ensure the viability of their branches for years to come?

For many, shared branching holds the answer. A shared branching model not only allows credit unions to establish a nationwide branch footprint on par with the likes of Wells Fargo and other national banks, but it also enables new innovations to be brought to market quickly in service to members.

Giving Universal Account and Data Access

Around 1,800 of the 5,500 credit unions in the United States participate in the CO-OP Shared Branch network, incorporating about 5,700 locations nationwide.

Maintaining and growing this system is a technological feat, and the system allows members of any participating credit union to visit a shared branch and complete these and other transactions as if they were in their home branch:

• Deposit cash and checks;
• Make cash and check withdrawals;
• Transfer funds between accounts;
• Make a loan payment;
• Print a statement;
• Purchase money orders and traveler’s checks; and
• Reorder personal checks.

Consider also that shared branching increases the number of credit union touchpoints for members – which helps reinforce and grow member relationships. In fact, convenient branch access remains the number one factor in new checking account decisions – and having an extended branch network reduces the rate of attrition when members relocate.

Because credit unions have also combined forces to create the nation’s largest surcharge-free ATM network – 30,000 machines strong – and many of these ATMs are located at branch locations, shared branching ensures fast, easy access to the kind of self-service options members value.

According to Bill Lowry, president/CEO of the Hobart, Ind.-based Midwest Carpenters & Millwrights Federal Credit Union, “Shared branching allows us to provide convenient face-to-face member services, allowing my members to walk into over 5,700 credit union buildings just by having their account with us.”

Delivering on Digital

Convenient branch and ATM access are perhaps the most tangible benefits shared branching offers. However, beneath the surface, shared branching’s digital infrastructure is designed to drive innovation.

For example, the shared branching network enables complex technological advances – from digital wallets and real-time P2P payments to fraud detection tools – to be quickly deployed and implemented by credit unions system wide.

And transactions throughout the network yield volumes of member data which, when aggregated, can lead to valuable member insights credit unions can use to their advantage.

Serving the Sharing Economy

While shared branching meets a host of tactical and technological needs for credit unions and members, the concept itself is also very much in step with an emerging cultural paradigm: The sharing economy.

According to Mesh Labs Founder and Chief Instigator Lisa Gansky, consumers “are moving from an organized kind of mindset in the last century where most of us as individuals and businesses aspired to own things” and instead “to a world in which access to talent, goods and services will triumph over owning them.”

Think of shared branching as the Uber of the banking industry. Consider also that shared branching is something banks will never be able to offer because, by nature, the concept is at odds with their for-profit business model, one that competes – not collaborates – with other banks and answers first to investors – and then to customers.

People Helping People

Even as fintech marches on, the shared branch experience will continue to resonate with members in truly unique ways. This has everything to do with our movement’s people helping people mission.

When members walk into a credit union branch, shared or otherwise, they are treated more like part of an extended community and less like a number – more like a partner in the community’s financial well-being and less like a sales prospect.

Shared branching also plays a pivotal role in the financial health of credit unions. In fact, the Rantoul, Ill.-based Credit Union 1 realizes annual net revenue of almost $450,000 simply by being a member of the network and opening its branches to guest transactions.

Midwest Carpenters & Millwrights FCU – whose membership includes a high percentage of travelers – saw loans and membership triple shortly after joining the network, all because members were then able to access accounts and data virtually anywhere their jobs took them.

And the benefits of shared branching are felt industrywide.

In the words of Paul Simons, Credit Union 1 president/CEO, “We’re allowing access at Credit Union 1 locations to members of our network’s 1,800 credit unions – 1,600 of which have had a member use a Credit Union 1 facility. Without the access to our Chicagoland branches, many of those 1,600 credit unions would lose membership due to lack of convenience.”

Dr. Kathy Snider is SVP, Debit/Prepaid Shared Branch Product for CO-OP Financial Services. She can be reached at kathy.snider@coop.org.