Sunmark Federal Credit Union decided to think small with its new branch strategy.
The credit union in Latham, N.Y., realized that its physical footprint was relatively small with just seven branches, and it needed to be expanded to better serve members. But management also decided it needed to open branches with modern touches, including no teller lines, ITMs and smaller floorplans.
This revamped model has lowered costs and put more focus on service, rather than just completing transactions. For these reasons, Sunmark has been recognized by the Credit Union Journal with a Best Practices Award for branching.
“Part of the strategic plan was to expand branch footprint and continue investing in brick-and-mortar,” said Darryl Enfield, chief information officer at Sunmark. “The No. 1 reason to do business was physical presence in community.”
The average size for a planned freestanding branch was about 2,700 square feet, according to a 2016 survey of banks and credit unions by consulting firm Bancography. (That number excluded three outlier institutions planning branches of more than 12,000 square feet, which skewed the data.) That’s down from about 3,000 square feet in 2013 and 3,500 in 2006, according to Bancography data.
But the $652 million-asset Sunmark decided to go even smaller than that. One of its newest branches, which opened in January 2017, is only 1,500 square feet and cost about $400 per square foot, or $600,000 total, to build.
About half of a branch is usually the teller line where members can complete transactions, Enfield said. But with the addition of ITMs, Sunmark slashed the space for the teller line and reduced both their branch footprint and construction costs.
Sunmark’s revamp has gone beyond new locations. It has also transformed how members are helped by staff inside all of its branches. Teller staff was reduced by 50 to 60 percent across all of its locations but employees providing advisory services were increased to help members and boost sales.
Sunmark has 15 ITMs in use. The technology is able to support both core banking and ATM transactions within the same platform, which eliminates the need to purchase separate ATM hardware. That means cost savings that can invested elsewhere in the institution.
“The initial projected cost for the ITM hardware, software, core and ATM network integration was paid for immediately in construction cost savings, so we have an immediate [return] on our initial investment to deploy this self-service technology,” Enfield said.
Members typically needed help from an employee once or twice to familiarize themselves with the ITMs before they were comfortable making transactions on their own.
In the third quarter, Sunmark processed roughly 94,000 transactions with about 64 percent of those being completed on the self-service ITMs.
So far Sunmark has opened two new branches and renovated an existing location. It has plans to renovate all of its existing branches to include ITMs and fit its emphasis of service over transactions. It will also open a branch a year until 2022.
“Our goal is to have 75 percent of all teller transactions done in self-service mode on the ITMs,” Enfield said.
