One Strategy For Making Shared Branching Work
Credit Union: Patelco CU
Nominated By: Financial Service Centers Cooperative, Ontario, Calif.
Nominated For: Usage of Shared Branches
In order for credit unions to survive and thrive, Andy Hunter believes members must have ease of access to their institutions from as many points of entry as possible. That not only includes online capabilities and telephone access, but brick-and-mortar entry points as well.
Given the nature of competition, even large credit unions sometimes have trouble rising to the challenge, says Hunter, president and chief executive officer of $3.2-billion Patelco Credit Union, one of the largest in the San Francisco bay area.
Shared branches operating through the Financial Service Centers Cooperative is how Hunter chooses to meet that challenge, both on behalf of Patelco's 190,000 members and those of other California credit unions as well. For a big institution like Patelco, serving other members can become both a time-consuming and costly occupation.
"We process about 100,000 transactions per month for members of other credit unions," said Hunter. "But for us, shared branching is the only way to compete with big institutions like Bank of America and Wells Fargo."
Philosophy is one thing, but assuring that equally enthusiastic service for all occurs with each and every transaction is quite another, Hunter says.
Patelco employees have been trained to make sure Patelco members get the best possible service. For some front-line and even backshop employees, serving large numbers of members from other credit unions can clog the service pipes, slowing transactions and causing blockages in branch lobbies and drive-ups.
Despite the best intentions, employees may not be motivated to serve "foreign" members, especially when it compromises service to Patelco members, Hunter admits. "Out goal is to build an environment of enthusiastic service for ALL credit union members," he says.
Reward For Employees
To meet that goal, Patelco shares 10% of all fees earned from foreign credit union transactions with credit union employees. Hunter declined to disclose what those totals are, only to say that sharing reminds employees there are fees to be earned by the credit union from foreign transactions. The added income, in turn, helps existing Patelco members by reducing the operating margin and improving services and facilities.
Hunter also cites empirical data showing that members who use shared branches-either those through the Financial Service Centers Cooperative or Patelco's own branch network- tend to be more active members. On average, they use more credit union services and their membership is more profitable to the institution, Hunter says.
The recognition, along with the credit union's "profit sharing," helps the Patelco president-CEO drive his point home. It also sets the stage for what Hunter says will be continued growth in shared branching and cross-credit union service usage in the foreseeable future.
There more than 200 shared service centers in California and 49 in the San Francisco bay area alone, Hunter says. The system also has expanded to include facilities on military bases in Guam, Italy, Japan and Korea, he says.
"We have to be at the front of this because it has all the earmarks of becoming an international phenomenon," Hunter says.