RANCHO CUCAMONGA, Calif.—What’s ahead for shared branching?
More effective use of the service, possibly more cross-sales opportunities at the shared branch without the threat of losing members to another CU, as well as more personalized member interactions thanks to technology.
That’s the forecast from Craig Beach, SVP of shared branching at CO-OP Financial Services, which recently became the second-largest network of financial institution branches in the country.
CO-OP Shared Branch now totals 5,671 physical locations, surpassing No. 3 Chase Bank, which has 5,567 branches as of July 18, according to FDIC figures.
Beach said that the ultimate success of shared branching, in an environment in which mobile transactions are building, will depend on how well credit unions truly embrace collaboration within the shared branching environment.
“This goes back to the balance of competitiveness in the shared branching network, making sure everyone is truly collaborative in this effort and building business through sharing,” said Beach. “Everyone who participates in shared branching needs to be in the same, collaborative mindset.”
Video Interaction
Beach described what might happen with shared branching down the road—where a member from Credit Union A walks into the shared branch of Credit Union B, goes to a kiosk and is greeted by a video teller who knows the member’s banking history and can personalize the interaction.
He said that even if the kiosk does not offer video interaction with a staff member, at least the transaction will be based on the member’s own banking profile.
“I think there is a greater potential for cross sales, from the member’s own credit union, as technology advances,” said Beach. “Say the member comes to a screen on the kiosk and they are looking at loan rates. The credit union can see that the member has a car and boat loan with them from the back-end data, but not a home loan, and could offer a mortgage.”
Craig Beach
Beach said that currently such a kiosk might only work in a “neutral” shared branch environment, where a shared branching network owns the location.
Beach believes tellers today can provide even better personal service to members who are coming to their office from another credit union, as CUs share more of their member data with each other.
“The credit unions that get shared branching realize that I am serving your members and you are serving mine, so we all win,” said Beach. “There have been some exercises that have shown promise as far as how credit unions can work together here.”
Beach said he is confident that technology will allow credit unions to work even more collaboratively with shared branching in the coming years.
“We know that credit unions, even the biggest ones, don’t have the branch networks of Wells Fargo and B of A,” said Beach. “Shared branching is one of the few ways they can serve their members nationwide.”
No. 2 Network--Big Statement
Beach said that the CO-OP Network becoming the No. 2 network of financial institution branches in the country makes a big statement for credit unions.
“That says a lot about the reach of credit unions,” said Beach. “When shared branching first started, credit union members ranked credit unions highly for service, but then also complained that they were not very convenient. With shared branching now, credit unions have the ability to compete on convenience with the Wells Fargos and Chases.”
Will shared branching become less important as more consumers turn to mobile banking?
Beach does not think so, noting that many had predicted Millennials would turn away from branches as they rely on their phones. But he reminded that data shows Millennials are still using branches at a high rate.
“We have been saying forever that the new generations won’t use branches, they will use mobile,” said Beach. “What surveys are finding now is that Millennials ages 25 to 30 are using branches more often. That makes sense, as they are entering the borrowing stage of their lives, needing car loans and even home loans. So they want a branch close by. Experts are calling this the generation of omnivore users, using all of the banking channels more often, using what channel they want when they want. If the need is quick and simple, they use their phones. Something more personal and important, they stop by the branch.”