ATM Deployment Key For 1 Small CU As It Leaves Its Old FOM Behind

February 12, 2007, 1:00 a.m. EST 3 Min Read

ROCKFORD, Ill. - When its employee-based membership began to shrink due to a corporate takeover, Generations Credit Union converted to a community charter. And that meant adding ATMs throughout that community to add new blood.

ATMs not only offered existing members more convenience, but they did double-duty, allowing the credit union to introduce itself to its new FOM.

For years, the $16.5-million GCU had operated with one office located at the Elco Industries plant. In 2006 Textron bought the plant and quickly began to downsize its workforce. GCU staff saw the writing on the wall and moved off site into a small but very competitive market. With 20 separate financial institutions in a five-square-mile area, GCU had virtually no name recognition.

GCU decided to compete with high levels of personal service and placing ATMs where they knew their members worked and lived. Using co-branded ATMs, GCU started with two ATM owned by a distributor and make themselves look much larger that its limited assets would allow. In doing so, Generations CU staff looked past the machinery and saw the future of their marketing campaign.

"Our ATM strategy became part of our marketing initiative," according to GCU VP Karen Jurasek.

Generations Credit Union doesn't waste time when it decides to deploy ATMs in a public place. GCU started with two Tranax MiniBank 1500 ATMs and now has six, with two more in store for the third quarter of 2007. Jurasek said the ATMs provide foreign transaction fees, spread the CU's logo around the community and can also support a new branch. GCU's first branch away from their main office has an ATM located two buildings away in a bowling alley. One machine is located in a plant cafeteria and another is next to an assembly line at a fastener manufacturing plant. Jurasek said the Tranax ATM model she uses has taken the heat, dust and airborne oil of a manufacturing plant in stride.

"It might be a bowling alley or a manufacturing plant. We need to have a captive audience," she said.

Jurasek said staff-created brochures placed next to the ATMs support membership drives with statements such as "If you're using this ATM, you're probably eligible to join." Or "Would you like to use this ATM for free?" Jurasek said when the public uses GCU ATMs, the credit union gets revenue, and if they join, it gets a new member.

"It's about you making a bigger footprint in the community," she said. "A phone line and an electrical outlet and you're ready to go."

Tranax VP of Sales and Financial Products Group Dominic DiBlasio said Generations CU is a good example of a credit union using ATMs to respond to members, gain new members and market their brand, all without having to purchase an ATM.

DiBlasio said any CU in a similar situation can contract with an ATM distributor to co-brand an ATM. The distributor owns the machine, the CU brands it and they both share the fee revenue.

"A consumer looking at this machine, would think it's a Generations machine. There's very little risk plus the reward," he said. "It's almost like an outsourced approach. They can deploy in far more areas than they thought they could afford."

DiBlasio said the costs and ROI of a distributor arrangement vary by the location of the ATM, how much service it will provide and the transaction volume. DiBlasio added that a credit union needs to first determine the goal of using its own ATMs. For example, a co-branded ATM placed in a shopping plaza may primarily be a marketing tool.

"It's hard to tell you how much it costs, but it's far less than a credit union buying and managing their own," he said. "It really is, to an extent, it is kind of a marketing function."