Financial Service Centers Cooperative (FSCC) is a non-profit cooperative CUSO that began as a shared branching network to give credit unions a cost-effective way to expand their footprints. Our mission is to “provide a cooperative network of convenient, low-cost access points so that credit unions can compete.” Our vision is simply to make American credit unions the most convenient financial institutions in the nation.
FSCC began in 1990 with the idea of establishing a system of stand-alone shared branches. This proved expensive and as a result, our ability to expand the network was limited. We needed a new model. We explored the concept of outlets, and in fact pioneered the effort to create an interface that would work with major teller platforms. We found a way to make many different teller platforms act as though they were one. This was a technological breakthrough that has carried FSCC forward ever since.
With the technology handled, our next big challenge was to convince credit unions to send their members into the branches of other credit unions. Nearly 20 years and hundreds of millions of transactions later and we have proven the value of that strategy.
Our other big challenge was in bringing together the three major shared branch networks: FSCC, Credit Union Service Corporation (CUSC), and Service Center Corporation (SCC). FSCC and CUSC were the first to create the combined network; SCC joined in 2002. This network of networks is called Credit Union Service Centers Network, Inc. (CUSCNI) with its now familiar “swirl logo.” This combined network allows members of credit unions in any one of the three networks to use the branches of any of the other CUSCNI-member credit unions. In the same year, 2002, FSCC expanded overseas, onto military bases; FSCC is a major presence in the Defense Council of Credit Unions. Shared branching is now in 46 states providing 2,635 shared branches.
FSCC is a technology driven company, but one grounded in the needs of our credit unions and their members. So although we are a shared “branching” network, we realized that traditional shared branches and outlets were not enough. This has led us to explore and implement other access points and networks.
From Call Centers to 7-Elevens
The strategy of maximizing the shared branch interface began with a search for a 24/7 network call center. After some research, we approached Digital Dialogue, and together we developed a generic 24/7 call center outlet. Members of an FSCC credit union may call an 800 telephone number, be authenticated, check balances, find branch locations, check account history information, apply for loans and more. Credit unions in the FSCC network participate in this without incurring additional cost because they already had the interface that allowed for the shared branching.
We realized then, of course, that we were not only dealing with shared branches but really with shared access points. This shifted our way of looking at things. We began to think of our goal as delivering access points rather than walk-in locations.
In 2002 and 2003, various research and reports extolled the improved performance of self-service kiosks, and the waning value of ATMs. Although we realized we might be cannibalizing existing shared branches, we saw the value in attaching our pipeline to the machines. In 2004 we began to deploy kiosks, which sometimes have been described as ATMs on steroids. Indeed, they can do all that an ATM can but because they are connected to our more robust data pipeline; they can deliver a full set of transactions to members. With a kiosk, members can make loan payments, distribute payment from a single check to different loans, receive loan advances, see where they could extend lines of credit and so on. Working with a kiosk is almost like being in a branch and working with a teller. In fact, some credit unions – Hanscom FCU in Massachusetts, in particular – are using the kiosks in place of tellers.
Although we were excited about the ability to provide shared branch transactions through kiosks, we knew that doing it one or two kiosks at a time was going to take a very long time. We needed scale. So it was in 2003 that we began working with 7-Eleven stores to deploy shared branching through their virtual commerce machines, known as Vcom units. At the time the Vcom were deployed in 1,100 stores across the country doing a variety of transactions including bill paying and check cashing. We saw this as our opportunity. They wanted more transactions; we wanted scale.
Four years, and a lot of development later, our plans are to launch shared branching transactions on Vcom at 2,000 7-Eleven locations in 19 states. With the addition of 2,000 locations to the existing 2,600 in the national shared branch network, credit unions are taking a huge leap forward in convenient access points for members. The fact that these units are available 24/7 is another significant advance for members.
We take our strategic planning very seriously, and as I said we are on track to make the credit union system the most convenient financial services system in the nation. Our Board members have encouraged us to be entrepreneurial. Our senior management studies the financial services industry, including researching what banks and nonbanks are doing to deliver financial services. If you had attended our 2003 annual meeting, you would have heard our CEO forecasting our involvement in kiosks and outside networks. We are always looking for ways to maximize the shared branch interface and provide more access.
Despite being labeled as technology driven, we believe our greatest strength is in anticipating the needs of consumers. Once we know what our credit unions and members want, we can make the technology work. Lately we have been testing Mobile Banking – to better engage Generation Y – and remote deposit capture.
We receive a great deal of input from our credit unions. We have an Operations Advisory Committee, composed of our member credit unions. We ask committee members for ideas, especially about what kinds of products and services they would like to see, and they are very good at telling us. We also ask them what they think of any new product we are considering.
Our existing framework of user credit unions together with the single interface gives us the scale that individual credit unions cannot achieve. With numbers and size comes the ability to do even more for more credit union members. Our scale and the ability to connect to so many members at once is what got us in the door at 7-Eleven.
We understand that a good strategic plan is of little use without good implementation. Thus we pay special attention to how our services are deployed to our member credit unions. We do lots of training, lots of face-to-face work in the credit unions. We supplement these with webinars and online training. We secret-shop locations to assure that the training has been effective and the services used well to the benefit of the credit union members.
To sum up, we believe we are dynamic and we intend to remain so. We look for good ideas that are going to help the millions of people who are members of credit unions in our network of networks. We are enthusiastic about them, about the technology that can improve their financial lives and about how much more we can do.