Extending Their Reach: CUs Branch Out

Credit unions continue to meet members' changing needs through a variety of delivery channels.

 
 

Credit unions continue to meet members' changing needs through a variety of delivery channels. In the first quarter, 339 credit unions reported at least one new branch. 811 credit unions have opened one or more branches since the first quarter of 2007. Since the first quarter of 2003, branches have grown at a CAGR of 2.8%. Furthermore, 1,056 credit unions reported as of March 31, 2008 that they would expand existing facilities or build new ones within the next 12 months. While branch growth is seen as part of an active member growth strategy, total members increased 1.2% over the first quarter in 2007.

Graph: Credit Union Branches and Growth Rate | Data as of March 31, 2008

FDIC-insured institution branches number 97,261 as of June 30, 2007. Credit unions manage 17% of the nation's branches, but only control 5.7% of total financial institution assets including banks and thrifts.

From a Transaction Center to a Relationship Center
Over the past year, though, credit unions have deepened existing relationships. The average share balance increased 6.5% of $7,638. The average loan balance increased 5.3% to $12,166. Focusing on increasing wallet share and providing new methods of banking may be a key to credit unions to growth in the future.

In a recent Internet Strategy Consortium survey of 14,000 online members, 80% of those surveyed reported visiting the branch at least once a month. New services, such as remote deposit capture, may lessen the number of transactions conducted at the branch but will make those transactions important in developing relationships between the member and credit union. With fewer opportunities to connect with members face to face, branch environments will need to convey the value of being a member and the philosophy of the financial institution.

Graph: Survey of Delivery Channel Usage (14,000 Members) Source: Internet Strategy Consortium

Innovation in branch design may be one area where credit unions can dominate. For example, Umpqua Bank's “stores” offer large seating areas, free wireless internet and many have coffee shops within the branch. On the credit union front, Wright-Patt has two “dialogue” branches, in which teller stations are individual and spaced throughout the branch. Members are able to see what representatives are doing on a computer and become engaged in the financial process. The result is a welcoming retail environment, where members can discuss their financial situation and representatives may refer products or services to best suit the member's needs.

 

 

 

June 9, 2008


Comments

 
 
 
  • it would be helpful to find out more about the newer channels Credit Unions are using to attract younger members
    Anonymous