EAST LANSING, Mich. — Michigan State University FCU here is the dominant credit union in the local market, and one of the biggest financial services players in town, but one person says that its success comes from always acting like an underdog.
"We definitely are aware of our size and our impact, but we try not to view ourselves that way," said April Clobes, EVP and chief operating officer at the $2.6 billion credit union. "There are some issues if you look at yourself as being really big and the best at everything, because we don't want to become where we're so confident that everything we do will be amazing. We look at everything we do as though we're the underdog."
Award-Winning Approach
That approach has led not only to growth and success in recent years, but also to the credit union being named NAFCU's FCU of the Year for credit unions of more than $250 million in assets.
Clobes — who in March 2015 will take over at the helm for retiring CEO Patrick McPharlin — credited the university with being the driving force of the credit union's growth.
However, she also noted that because the credit union's average member age skews a bit younger — about 37 years old — it does some things differently, including placing a heavy focus on technology.
"By the very nature of serving individuals at a university, they are more apt to utilize technology," said Clobes. "So in that regard you'll see very high usage rates of our mobile apps, our remote deposit capture, electronic statements, home-banking logins, things like that. For us, we excel compared to other people in certain tech adoption, and I think that comes from a younger membership but also a university-based membership."
E-service channels — and particularly RDC — have been a boon for MSUFCU, said Clobes, who reported that mobile deposit helped revive dormant memberships and even bring some former members back to the credit union, along with boosting check volumes for active members.
During the first quarter of 2014, she said, the credit union had nearly 111,000 mobile check deposits. That's more than half of what the credit union had during all of 2013 (200,680 mobile deposits). RDC also has not cannibalized in-person deposits at the teller line, she said.
"We have 185,000 members, so the [check] volume is staying pretty steady, even as we're growing. Overall that would lead you to believe that people are using checks less individually, but our aggregate has stayed pretty consistent."
In addition to its standard mobile application, the credit union also launched Money.edu, a financial education app designed in partnership with students at Michigan State University. Clobes said the app was borne out of the fact that many college students' financial knowledge is quite poor, so "we offered to put together the app so we could help their students and our members have a better financial base of understanding, which would help them be more successful in school and throughout their life as they understood what they were encountering through either borrowing, setting up savings plans or things along that line."
The app is largely about educating, such as defining certain financial terms, tips on how to set up a budget, where to find further resources, and more, said Clobes, but about 10% of it is also MSUFCU-related, including the CU's logo and brand, as well as a link to e-mail financial questions to the credit union's experts and links to current rates.
Clobes stressed that the CU-specific component of the app is "very minimal — it truly is designed to be educational, and that's part of our mission: to help people have financial knowledge and education to have financial security for the future."
While MSUFCU is the area's biggest credit union, Michigan's capitol region has no shortage of CUs, including Astera CU, Lake Trust CU, CASE Credit Union, LAFCU and more. Clobes said that all of those institutions traditionally served their own groups, something they all continue to do today, whether their FOM includes local schools, the auto industry or any other FOM.
SEGs, Mergers Drive Growth
For SEG-based MSUFCU, that has meant finding ways to add additional employer groups in the area, as well as mergers, such as last year's merger with Eaton County Educational CU, which gained MSUFCU about 4,000 members.
"We also serve Oakland University in metro Detroit, and when they were founded it was as MSU Oalkland and was an MSU satellite campus," said Clobes. "We had served that university up until about eight years ago, and they did an RFP for financial services and at that time we lost. That contract came back up and we are now back on Oakland's campus, so that has been some of our growth as well."
All told, MSUFCU saw about 7% membership growth during 2013.
As for its next steps, Clobes said that the credit union continues to investigate mergers and other expansion opportunities, such as some Michigan State satellite campuses.
"We always think that there's room in our existing community to grow and in some of the outlying areas where we're looking at branches and other things in the community," said Clobes. "We always think there's opportunity to grow."
