Optimizing Your ATM Channel

Three of the top ten credit unions are successfully meeting the cost vs. convenience challenge.

 
 

According to a recent survey from Bankrate.com, average ATM fees are now at all-time highs. This may sound like good news to credit unions, whose ATM fees represent 9.4 percent * of non-interest income. The truth is, however, that as fees rise, consumers will increasingly migrate towards no-fee cash withdrawal options, such as retailers who allow cash back from debit transactions.

The threat of large-scale customer loss creates a significant challenge for credit unions: integrate their ATMs with their total delivery channel strategy and minimize operating expenses without alienating members with fees. While there is no set strategy to meet this challenge, three top credit unions (see chart below), are successfully providing member convenience in a cost-effective manner.

Pennsylvania State Employees Credit Union ($2.2B in Harrisburg, PA)
Of the credit unions over $1 billion, Pennsylvania State Employees Credit Union’s (PSECU) strategy relies on remote delivery channels. With only three branches and 220 ATMs, PSECU proportionally has the smallest branch network of the billion-dollar credit unions. PSECU also participates in shared ATM networks and serves over 300,000 members in its statewide membership base.

BECU ($5.5B in Seattle, WA)
BECU is well known for its unique branching strategy, with in-store branches comprising more than 90 percent of its locations. These are “cashless branches,” which do not have teller drawers and rely on ATMs to provide members with on-site services. These ATMs are not only a critical touchpoint for transactions throughout Washington, but also a fundamental portion of the daily activities of the in-store branches.

Actors Federal Credit Union ($84M in New York, NY)
Actors Federal Credit Union is the smallest institution to make the list and has the most non-traditional partnership. It has ATMs located in McDonald’s restaurants and subsidizes its large network with a $0.99 fee charged to non-members. The ATMs are purely for withdrawals and only about one in ten transactions is from a member. The partnership allows for many convenient locations and enough foot traffic from non-members to help cover the expenses of the expansive network.

The credit union’s two branches are both located in prime locations in New York’s Times Square. Since members’ primary means of transportation is on foot, Actors felt it was important that ATMs were accessible within walking distance of where they worked or resided.

Top 10 Credit Unions by Branches and ATMs

as of June 30, 2005 for credit unions over $20 million in assets

 

Rank

Credit Union

ST

# of ATMs and Branches

# of Branches

# of Wholly-Owned ATMs

Members per Branch

Total Assets

1

STATE EMPLOYEES

NC

1,035

185

850

6,748

$12,705,704,119

2

WESCOM

CA

158

38

120

6,583

$3,083,020,981

3

NAVY

VA

389

106

283

24,405

$25,002,000,850

4

THE GOLDEN 1

CA

337

69

268

9,357

$5,958,453,281

5

PENNSYLVANIA STATE EMPL.

PA

223

3

220

101,036

$2,289,781,751

6

SUNCOAST SCHOOLS

FL

210

40

170

9,447

$4,806,504,844

7

BECU

WA

187

38

149

10,823

$5,567,764,275

8

ACTORS

NY

178

2

176

7,977

$84,458,581

9

AMERICAN AIRLINES

TX

160

41

119

4,974

$4,025,353,180

10

SAN ANTONIO

TX

152

18

134

13,020

$1,838,019,182

 

TOTALS FOR THE CREDIT UNION INDUSTRY

19,734

 

 

4,366

$685 BILLION

 

 

 

 

 

Source: Callahan & Associates, Inc.

The top 50 listing is available in Callahan's 2006 Credit Union Directory.

 

 

 

*Callahan and Associates’ Second Quarter Non-Interest Income Survey.

 

 

 

Dec. 12, 2005


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