Timing Ideal for CU’s Branch Update

Members Cooperative Credit Union in Duluth, Minn., didn’t plan its technological overhaul around the COVID-19 pandemic, but it turns out the two went well together. While sudden lobby closures over transmission concerns might have been a headache for many, this credit union was ready to pivot.

That’s because in 2019, it completed a futuristic branch transformation, allowing it to hold video banking sessions, have members use outside interactive teller machines day and night, and use biometric palm scanning technology to avoid surface contact and tighten security.

The aim was to cultivate the same level of service and sense of trust whether members interacted with their branch via their smartphones or by walking through the door, according to Chief Information Officer and COO Janet Vold. Because although the credit union has long invested in technology, she noticed a gap between online and in-person experiences.

The branch was traditional before the overhaul, according to Vold, who said it was more about “coming in and doing a task” than anything else. Members would walk in and line up to meet a teller in a room that didn’t feel as open, inviting or modern as it could have.

Enter: Fiserv, a Brookfield, Wis.-based financial services technology company that teamed with biometric provider Fujitsu to offer a new way of authenticating members.

By scanning the pattern of blood flow within the veins of a palm, Dave Reim – director of product management for Open Solutions at Fiserv – said credit unions can tell exactly who’s who. It’s an identification method called liveness detection, which Fiserv said is more accurate than fingerprints, iris patterns and facial features.

“That infrared sensing device is taking a picture of that blood flow,” Reim said. “There’s up to five million reference points in your palm that we encrypt and store in our database.”

The best part? It all happens within a second and is contactless, Reim said, as users need only float their hand two inches above an infrared sensing device while it compares the blood flow to what its database says.

“You don’t have to worry about going into your pocketbook to grab your wallet to get our ATM, your debit card or your license for authentication,” Reim said. “Your palm is your PIN.”

It’s a nifty piece of technology for members to interact with in Vold’s experience, she said.

“Suddenly, they can access all their accounts without having to use a debit card, without having to say their name,” Vold said. “They can just put their hand over a palm reader, and it now recognizes that it’s them and they have full access to their accounts.”

It’s also a boon for eliminating fraud, according to Erik Nilsen, vice president of product management for Open Solutions at Fiserv, because you can’t spoof a live hand.

“I might have your license or your debit card, but I can never go into the branch and put my palm up there,” Nilsen said. “They would know immediately.”

‘Technology Can be Scary’

For Vold, the hardest part was encouraging the creatures of habit we call humans to embrace something radical.

“Getting people to use new technology, it’s hard,” Vold said. “People don’t necessarily want to stand out in the middle of some area trying to learn how to do something new, even if it is easy.”

For that reason, it helped to have a team member float around the branch, greeting members, guiding them to the machine and offering to walk them through how it works.

The credit union also implemented interactive branch kiosks, which act as hybrid ATMs, where members can do all their transactions while staff help them with any issues via video. Vold said that meant people didn’t feel they’d been left alone to figure out some new machine.

“That really took down that anxiety level for the member, of, ‘I don’t know what I need to do when I step over here,’” Vold said. “By pulling those pieces of technology into that branch, members became more comfortable with using technology because we were there to help them bridge that gap. And it really helps the members not be so scared of that technology. Because technology can be scary.”

Self-service concierge kiosks – or pods, as Vold calls them – adjusted the Feng Shui inside the branch, creating space for a more consultative experience.

“Instead of just fulfilling a transaction, it became more having a conversation with the member and understanding more about what their needs were,” Vold said.

While you might find older technology in several different devices, such as printers and license scanners, behind a traditional teller line, Reim said the plan here was to consolidate all that into one tablet, decluttering the work station.

It’s not a cheap endeavor, according to Vold, who said it took several years of groundwork and gradual implementation but can greatly reduce costs down the line.

A Hit With Seniors?

Vold conceded that her team assumed the changes would appeal predominantly to younger people, but it turned out they were wrong.

“I think, initially, we thought that the adoption rate would be really low among the senior membership, and that was not the case,” Vold said. “They really enjoyed being able to use that ­technology. They enjoyed being able to have assistance to help them use it and they liked the security of it, interestingly enough.”

For that reason, she suggested keeping an open mind before a digital transformation.

“When you go into implementing new technologies, you have to be very open about how the members will embrace it and what demographics will embrace it, because I think it will surprise you who will adopt the technology,” Vold said. “We went into it thinking one thing and came out the other side realizing that there was a far bigger audience than what we had gone into it thinking.”

The key to success, Reim said, is for the internal credit union team to fully embrace the echnology first.

“Once they’re drinking the secret sauce, it’s easy for them to pass it on to their customers,” Reim said.

Reim and Nilsen said their greatest challenge has been overcoming objections to biometrics – which usually sound something like, “I’m not doing that. The government already knows enough about me.”

But after testing the technology with three different customers – one of which served a large Amish Quaker population – they had a similar revelation.

“The demographic we thought wouldn’t accept this was greater than 60, and they were the ones who welcomed it the most, because it was so easy to use,” Reim said. “They didn’t have to remember it. They just came in with their palm.”

It’s an opt-in feature, according to Reim, who said the biometric information is encrypted twice and locked with a license key unique to each customer.

Members Cooperative’s high-tech consultative branch model means members don’t have to depend on someone else to provide a service, which Vold said has proved handy during a global pandemic.

COVID-19 also sparked a quicker uptake, as members became more concerned about avoiding face-to-face interactions.

“Where we may have had some gaps in our membership using those technologies, those gaps were suddenly closed,” Vold said. “We didn’t find anything that we weren’t able to do for our member remotely that we were previously able to do in the branch, beyond, probably, safe deposit boxes.”

All the excitement over palm scans has even left Reim a little perturbed that he can’t use them at all financial institutions. Reim recalled recent experience inside a bank, when he had to hand his license to a teller after an ATM machine spat out a check. Authentication required backing up a few feet and pulling down his face mask to reveal his face – which isn’t ideal when there’s an airborne virus around.

“People don’t want that icky experience where you use your ATM or your debit card and you put in your PIN or do a swipe,” Reim said.

Marrying palm scanning technology with Verifast has translated to more accounts being opened up, according to Nilsen, as less time is wasted.

“In the past it’s taken 25 seconds, often, to validate who somebody is when you put your card into a card reader, or type your PIN in and then hand over your driver’s license, and the teller’s screen pops behind while they wait awkwardly in silence,” Nilsen said. “Not only does it modernize a look and feel of something that had been so stale for so many years, but the speed that we can serve members and customers now is greatly improved through efficiency gains.”

Reim and Nilsen said they’re now working with the credit union to potentially incorporate the palm scans into drive-up teller systems, and to develop voice commands for tablets so customers won’t have to touch anything.

And although Fiserv does not currently have a product in the works, Nilsen said it is exploring the idea of using biometric identification instead of debit or credit cards – making it impossible to steal someone’s card and buy anything with it. “Not that it’s the ‘Mission Impossible’ with Tom Cruise-type-thing,” Nilsen said, “but it’s really about the speed of having secure payments that guarantees there is no fraud.”