Texas Credit Union Plans Airport Check-In Style Branches

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University Federal Credit Union plans to open branches that resemble modern airline terminals.

Under its design, which took several years to take flight, employees roam the branches' aisles, available to assist customers whose main points of interaction are tablet-like automated teller machines.

"These machines … are not the six-foot-tall beasts. They are small, unassuming devices that help you get the job done," says Steve Kubala, the Austin credit union's senior vice president of operations.

"Everyone is trying to develop the next new business model that will help them be sustainable in the long run," he says. "And that is what we are trying to do."

University Federal plans to launch three branches based on this design in the North Austin suburbs before April 2012. The credit union says its members work in technology and higher education.

The branches, which operate without tellers, would have about four ATMs each. The machines are four feet tall and accept envelope-free deposits.

Altogether, University Federal will use 12 to 17 of the tablet-like ATMs and 10 to 15 traditional ATMs. The credit union has been designing the tablet machines with Diebold Inc. of North Canton, Ohio.

"The idea is to provide good service to the customer [and] maybe sell other products," says Jeff Hill, Diebold's vice president of product engineering.

Credit unions are hungry to differentiate themselves from the bigger banks and lure customers away with more compelling technology, experts say.

"Credit unions have shown, across a variety of technology areas, to be earlier than banks," says Bob Meara, a senior banking analyst at Celent. "But I think the U.S. is destined to see more self-service in branches. I think that's an economic necessity."

For instance, Mid-Hudson Valley Credit Union operates 24 hours a day using kiosks that connect customers to bank representatives using video conferencing. The 11-branch credit union has 24 personal teller machines made by uGenius Technology of Sandy, Utah.

Still, the self-service plan is a gamble for University Federal, which has seen its deposits rise year over year, according to the latest statistics available from the SNL Financial.

In the first quarter of this year, the credit union saw a 15% rise in its deposits, to $1,233,426.

"There is risk to this," says Kubala. "But we feel that the key to everything is that we are trying to fulfill the promise of technology, and do it in a friendly way that makes our members accept it, just like the best airlines."

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