ORANGE, Calif.-A "smart" branch of $805-million Financial Partners Credit Union that features no cash but is heavy on technology has been so successful the CU plans an immediate sequel.
Nader Moghaddam, CEO of Financial Partners, based in nearby Downey, Calif., noted Credit Union Journal he used to oversee site locations for a "pretty large" bank, meaning he knows "what works and what does not" for branches.
"What I am really excited about is eight years ago our organization invested in our sales and service culture and revamped our delivery strategy. The paperless branch is part of that delivery strategy," he said.
The cost of the smart branch is one-third of a traditional branch-$300,000 versus $1,000,000, including the ATM and all of the new equipment. Moghaddam said the keys are everything is wireless, and the layout is "very sleek" thanks to an absence of bandit barriers. All cash transactions are done at the ATM. "We are able to run the branch with two employees instead of five," he said.
The smart branch soft-launched in early April, and just six weeks later it already had nearly 400 membership accounts, more than 350 checking accounts, $500,000 in shares and $2 million in loans-all without any advertising. "It has a 100% Net Promoter score," Moghaddam said.
Electronic Sign-In
Members sign in by swiping their driver's license, or any ID with a magnetic stripe, explained Laurie Tyler, VP of member services. The system captures their name, takes their picture and asks the reason for their visit. It then advises them the number of people ahead of them and an estimated wait time. For some functions members are directed to self-service kiosks, or there is a place to wait.
Smart Check-In
Employees have iPads and can see how long members have been waiting, as well as their picture so the members may be given a "warm greeting" by name.
"This smart check-in triggers the messages shown on the multiple flat screens all around the branch," said Tyler. "The messages are targeted to the members."
Added Moghaddam, "It is a smart branch because it knows a lot about the members. We call it 'Apple-esque.' Plus we have really smart employees that are well trained in needs-based selling. For years financial institutions have wanted to be more efficient in handling transactions so they could be more consultative, and we think we have achieved this."
Tyler, who has been at FPCU for two years, said the smart branch is part of an expansion into the City of Orange.
"We are looking to serve the Orange community, and also the medical community as there are two hospitals across the street," she said. "It is open 7 a.m. to 8 p.m. because we want to capture both nursing shifts."
By not handling cash, Tyler said the employees can talk to people about what matters, such as how to improve their credit score or how to save money. "As people use cash less and less, we can help them set up how they set up their accounts on their smart phone or a computer."
So far, Tyler said the reaction from members has been very positive. Five credit unions have toured the branch and have been "very positive."
Moghaddam said Financial Partners plans to open another paperless branch in the next two months.
"We are excited about what has happened at this branch," he said. "We were not planning on opening another one this year, but the results are really good so we will shift things around.
"The last three years have been really good for our credit union," he added. "Our capital position is strong and we are fully committed to growth now, and these branches are a key element."
Financial Partners CU reported $5.8 million in net income in 2012, after paying $626,631 to the Corporate Stabilization Fund. It had $1.5 million in net income in Q1 2013. Its net worth ratio as of March 31 was 9.01% (well capitalized).
