With the prevalence of wireless devices like PDAs, cell phones, BlackBerrys, and the new iPhone, today’s consumers literally have everything at their fingertips. They can instantly download music to a computer or cell phone instead of hiking to a store to buy a CD. They can pay bills online with the click of a button. What it all boils down to is convenience – consumers want to access what they want, when they want.
This desire for convenience isn’t limited to gadgets and technology. I’m sure you’ve noticed that the number of bank branches in the marketplace are increasing. Banks caught wind of the important role locations and convenience play in determining whether or not to join a financial institution, and they took action. As a whole, most credit unions don’t have the luxury of allocating funds to build new locations, but that doesn’t mean we can’t compete. Indeed, shared branching is a cost-efficient solution for credit unions to increase their number of locations.
Shared Branching is Economical
While online banking has increased in popularity, not everyone feels secure handling their money over the Internet, and some people just prefer seeing a friendly face in a branch. Between construction costs, phone and electric bills, staff salaries, and other expenses, building and maintaining new branches is expensive.
Additionally, the majority of credit unions cater to localized populations. Building more branches in your community may please some of your constituents, but it isn’t necessarily ideal to reach members who have relocated and want to stay with your credit union.
Shared branching addresses the issues of cost and increasing locations by allowing a credit union’s members to perform a variety of financial transactions at another credit union’s facility. With buildings and staff already in place, this eliminates the need to build new branches and gives your members access to more locations. Members of credit unions that participate in shared branching have access to 2,400 locations nationally.
Shared Branching is Convenient
Branch locations enhance your members’ perception of how convenient your credit union is. Students who attend schools in other cities or states, members who commute long distances to work, and “snowbirds” who winter in warmer climates are some of the members who aren’t always able to use their neighborhood branches. With shared branching, they still have brick-and-mortar locations they can walk into and feel like they’re at home.
The Next Generation
The concept of shared branching has existed since 1975, so it’s a bit surprising that more credit unions don’t take advantage of it. Shared branching is a convenience that banks won’t offer because, at the end of the day, they answer to investors who want a bigger bottom line than the next guy. If all credit unions participate in shared branching, we have the potential to collectively offer our members access to more than 8,000 branches nationwide (as compared to Bank of America’s 5,700 branches or Wells Fargo’s 4,100). But we’ve all got to work together.
We need to remember that shared branching is an opportunity to strengthen our movement. Ideally, one day any credit union member would be able to walk into any credit union in the country and still access their money… surcharge-free. Wouldn’t that be convenient?