Credit Union: Boeing Employees Credit Union
Nominated By: IBT, Atlanta
Nominated For: Approach To Branching
For most credit unions, grocery stores branches are merely cost-effective ways to extend reach among members who might open an account or take out a loan between squeezing the melons and picking up a pork roast.
At Boeing Employees Credit Union, Tukwila, Wash., extending reach is certainly part of the plan. But the $4-billion credit union's success with its Express Service Centers has led to an entirely new strategic approach, says Garce Semingsen, BECU's vice president of member services.
With the assistance of IBT, Centennial, Colo., BECU has extended its branch network, streamlined its processes and, in effect, changed its entire service culture, says Semingsen.
"Our mission is to consistently provide superior member service through select delivery channels, and the Express Service Centers do all that," Semingsen says.
BECU began five years ago, installing the modular units developed by IBT in Albertson's, TopFoods, QFA and Safeway food stores in the Puget Sound area. BECU averaged one-and-a-half openings per year. In 2001, the credit union opened three Express Service Centers, Semingsen says.
Unlike other branches, however, BECU's Express Service Centers operated with a distinctly different philosophy. The branches had no tellers. Instead, says Semingsen, between three and five credit union "consultants" staffed the 300-square-foot to 450-square-foot spaces.
It was the consultants' role to work the areas in front of the branch to build relationships and draw members into the branch. Once there, consultants would answer members' transaction questions about conducting other business through one of several electronic delivery mechanisms. The branches offered ATM and Internet access and members could conduct any transaction that credit union offered, she said.
"The consultants could help members with more difficult activity but they never did routine transactions," said Semingsen. Some members complained, but most adapted to the new technology, she added.
Cheaper Than Bricks
The Express Service Centers are cheaper to buy, install and staff than regular branches would have been. An Express Center costs about $300,000 to install and can be done in about three weeks, said Semingsen. Standard brick and mortar costs significantly more and takes significantly longer based on the where the branch is located and how big it is, she said.
"Express Service Centers recover their costs in about 18 months, whereas a standard branch takes 36 months before beginning to show a profit," said Semingsen.
BECU also gained an unanticipated benefit of the in-store branches. In addition to being cheaper to install and run, members proved more receptive to the ease and convenience of the branches. Moreover, the sales-oriented consultants took a proactive rather than reactive approach of traditional tellers. Members walked away from Express Service Centers with an average of 4.2 products, compared to 3.4 products from BECU's two Financial Centers, more standard branch models.
BECU has 30 more Express Service Centers scheduled for the next two years thanks to a new contract signed with Safeway Foods. The credit union also is retrofitting its two Financial Centers to give them the look, feel and serviceability of its Express Service Center, said Semingsen.
