CU QUICK FACTS
HQ: East Lansing, MI
Data as of 12.31.18
12-MO SHARE GROWTH: 9.5%
12-MO LOAN GROWTH: 11.8%
The strategic direction of Michigan State University Federal Credit Union ($4.2B, East Lansing, MI) follows a single directive: Serve the member.
“It might sound simple when you boil it down,” says CEO April Clobes. “But that is our focus.”
The credit union has plans to serve more of its members across the state by expanding into new markets with redesigned and reimagined branches and has formalized branding, hiring, and training strategies in lockstep to ensure the member, and employee, experience remains high.
If You Build It, They Will Come
When students of Michigan State University graduate, they move all over the world. MSUFCU serves students, staff, and alumni of the university — as well as Oakland University some 90 miles to the southeast — and counts members in all 50 states plus more than 100 countries worldwide.
Are Branches For Millennials?
With an average member age of 35, MSUFCU serves many young members. So, is it true that millennials don’t need branches?
“That’s not what we see,” says Lea Ammerman, executive vice president of member services.
According to Ammerman, millennials are going through new life stages and want advice and direction on their finances.
“We stereotype and say older generations are more likely to come in,” she says. “But they’ve purchased a car six or eight times in their life. They don’t need to come in to do it. It’s not scary to them anymore. We see that millennials are the ones asking for help.”
A network that large requires robust e-services and call center staff — collectively, these employees combined to handle more than 850,000 chats and messages in 2018 — without diluting the hightouch experience for the complex, consultative questions that can’t be conveniently answered online or over the phone.
“Our members ask for branches, they use our branches,” says Lea Ammerman, executive vice president of member services at the credit union. “But we see the role those branches play changing.”
Locally, MSU grads flock southeast to Detroit and west to Grand Rapids. Currently, 13 of the credit union’s 19 branches are located in mid-Michigan. Five are in Metro Detroit and one is in Grand Rapids, but MSUFCU has plans to open more brick-and-mortar locations in these two regions.
Last year, in addition to 5.4 million in-branch transactions, the credit union opened 65% of its new accounts in-branch. And when construction on a new branch begins, potential members notice, Ammerman says. Members start to open accounts up to six months before a new branch is completed; often, they’ll follow the construction progress and show up before the credit union even announces the branch opening.
“We’ve never had an empty house on the first day of a soft launch,” Ammerman says. “That is surprising because they don’t know we’re actually open, but they watch closely.”
BEST PRACTICE: KNOW HOW FAR THEY’LL GO
When it comes to building branches, know members’ “errand and destination radiuses,” advises Lea Ammerman, executive vice president of member services at MSUFCU. Members travel different distances for shopping or financial services. Where a branch falls within those radiuses will influence how frequently they visit.
That’s not to say the credit union doesn’t market its new branch presence. It advertises on billboards, TV, radio, and online. Spotify — check. Google Ads — check. Geofencing — check. One advertising wrinkle MSUFCU has run into is the size and cost of entering the Detroit and Grand Rapids markets.
“The price definitely escalates, and our message can get diluted,” says chief marketing officer Deidre Davis. “I could put up a billboard in Lansing and one-quarter of the population sees it. I put that same billboard in Detroit and maybe 5% see it.”
When members do visit the branches, however, MSUFCU wants its members to experience a modern approach to banking — one that doesn’t simply re-create the digital experience.
Every day something new and exciting happens. No day is boring.
For that reason, MSUFCU takes a different, current approach to new branch design. The teller line is gone, replaced with a sit-down pod concept with two stations separated by a cash recycler. Seating is curved to protect privacy, and pods are staffed by universal employees who are trained to conduct conversations rather than transactions. Thus far, employees and members alike have been receptive to the changes.
“Members love it, and we find this setup better engages our employees,” Ammerman says. “Members visit us here, and we want to ensure the experience is worth the time they’ve given us.”
Never A Boring Day
With unemployment at 50-year historical lows, hiring and retention is a challenge, especially in a smaller metro area like Lansing. Engagement here is key.
“The younger employees want a level of engagement previous generations haven’t,” says chief risk officer Jim Hunsanger. “We need to demonstrate we can provide them that and the kind of career development required to keep them here.”
When it comes to attracting and retaining talent, MSUFCU tackles staffing on many fronts. The credit union runs a yearly analysis of the average salary and compensation in its markets. And since 2016, it has operated its Financial Innovation & Education Center in downtown Lansing to train 20 to 25 interns every semester. The center provides interns with real-world job experience and introduces them to the credit union industry. Whitney Anderson-Harrell, who oversees the center, says many interns graduate into full-time positions within the credit union.
Then there’s the credit union’s facilities — perhaps most notably its two green-glass headquarters buildings.
Across both buildings, the first opened in 2008 and the second in 2017, the credit union houses hundreds of employees — including its senior team, call center staff, and technology team — in a modern space complete with meeting and co-working spaces and two employee cafés. Overseen by chief human resources officer Silvia Dimma, the cafés offer a place to satisfy a caffeine fix or partake in spontaneous conversation.
“People come together to talk about their kids or their pets or their weekends and develop relationships with one another,” Dimma says. “But they’re also an excellent resource for those who want a snack or forgot their lunch.”
MSUFCU’s regions of focus — Grand Rapids, Lansing, and Detroit — run the width of the mitten and are separated by a little more than 150 miles (and a whole lot of cars).
Beyond impressing potential new hires with modern digs and amenities, MSUFCU is careful to match candidates with its culture. MSUFCU looks for caring and compassionate new hires, those who get an intrinsic satisfaction from helping others, and requires multiple interviews within multiple levels of the organization, “to make sure we understand them, they understand us, and see if they’ll be fulfilled with what we’re asking them to do,” Ammerman says.
Currently, new hires attend a four-week onboarding program wherein they learn about culture, products, and services. However, MSUFCU is splitting training into two segments. New hires will still receive an initial two weeks of culture training. The tailored product and service training, however, will be administered by an on-site trainer. Not all new hires learn at the same speed, and moving the training into the branches, call center, and e-services department will help them build confidence and acumen through oneon-one coaching.
“There’s a lot of effort put into making sure our new hires understand the purpose behind the credit union,” Ammerman says.
BEST PRACTICE: NO HELP OFF-THE-SHELF
MSUFCU developed its new hire e-learning content in-house. “We tried to find off-the-shelf e-learning programs, but they often didn’t align with our culture,” says chief human resources officer Silvia Dimma.
Even when the fit is right, engagement can ebb and flow — especially among younger employees whose eyes might be more likely to wander.
“We want to keep them engaged, so they’re always learning something new and their position evolves as they advance,” Dimma says.
MSUFCU often hires from within — the majority of its 10 senior level staff were promoted from lower levels of the organization — and provides plenty of opportunity for employees to grow along with the credit union.
Within its branches, call center, and e-services area, there are six levels of progression, all of which come with escalating loan-limit increases as they gain additional responsibility and experience. Employees can move along a spectrum: FSRI, FSRII, Senior FSR, Loan Officer I, Loan Officer II, Senior Loan Officer.
Elsewhere in the organization, MSUFCU offers management training programs. One day per month for 12 months, a local competency and management leadership trainer comes on-site to teach a class. When the trainers are not on-site, employees in these training programs take a break from their day-to-day roles to shadow department managers and get a sense of the full scope of the credit union.
In total, retention is high — 82% annually, according to Dimma — which speaks to the success of the credit union’s efforts. But employees who are smart and compassionate to begin with, then well-trained, will always have options in the job market. It’s up to the credit union to align what members and employees want with what the credit union offers.
“We’re excited about our growth and expansion,” Dimma says. “We’re finding ways to give members what they need. That brings with it all kinds of opportunities for our teams. Every day something new and exciting happens. No day is boring.”
This article appeared originally in Credit Union Strategy & Performance. Read More Today.
Wait, There’s More!
This is just one section of the Anatomy Of Michigan State University Federal Credit Union series that appears in Credit Union Strategy & Performance. Read the whole discussion today.