WASHINGTON, Penn.—Predicting that the typical CU business model won’t survive in the not-too-distant future, Chrome FCU is overhauling its branches to address what it says are consumers’ changing needs and growing competition from outside the financial services sector.
Chrome FCU is in the middle of converting its two offices into “Chrome Stores,” which the CU likens to Apple Stores. The locations will be high on technology and low on transactions, with emphasis on sales and consultation
CEO Christopher George said the old CU model of relying on deposits and car loans won’t survive, at least not for his shop.
“You can only do so many car loans. We were prospering, but we know we would not be profitable five years from now,” explained George. “So do you merge, or change the business model? We decided to change.”
Name Change
Rebranding from Washington Community FCU earlier this year, the new name and look will not only differentiate from other FIs, but allow Chrome to compete with players outside the financial services industry that are already elbowing in on the wallets of banks and credit unions, George said.
“The old model is dead, because we are not only competing against PNC and Dollar Bank, but also against companies like Walmart, Apple and Square,” said George. “Plus, 10 years ago people went to the branch about 65 times a year. Five years ago it dropped to 35. Today that number is a lot lower.”
The $131-million Chrome believes the new model will allow it to reach $500 million in assets within five years, which George said is the optimal size for the CU to achieve the benefits of scale and best serve the membership.
The CU’s main office became a Chrome Store in July, and its second location will make the change by the end of the year. A third store is planned for 2016.
“We went into this thinking ‘if Apple created a credit union, what would it look like,’” said Amanda Lunger, VP and chief brand officer, adding the credit union is projecting that branch visits will continue to decline in the coming years. “After lengthy conversations we decided to go with the store concept.”
High-Tech Look
Lunger said the stores will appear, at first glance, more like a “tech company” than the “typical block-and-tackle credit union. The offices will have a “transaction bar” plus a wall of digital media, and when accounts are opened, documents are e-mailed to members.
“No paper,” said Lunger.
Chrome already offers members a full suite of digital services—mobile, remote deposit capture, online lending . . . which is used by the majority of the membership.
Lunger said the role of the branch and digital services is reversing.
“It’s digital first—so digital is supported by the store network,” she said, saying members will conduct virtually all of their business with Chrome remotely and then stop by a store when they have a question, or just want to speak with someone face-to-face.
Chrome Reps
Front-line staff are “Chrome reps” whose job, Lunger said, will also be to let members know how digital services can make their lives easier.
George said the move is supported by demographic research that indicates consumers in the area like using digital services for most of their banking needs.
Calling the offices stores, said George, is just as important a change as altering the look and feel of the offices—which will have a great deal of open space, teller pods and free Wi-Fi and Starbucks coffee.
“We think banking is becoming a utility,” said George. “We think the store concept is something consumers will soon relate to when it comes to banking, and is in line with what we are trying to do. When you come to the store we are there to help you in person, and to sell you our products and services.”