SANTA ROSA, Calif. — Redwood Credit Union recently earned the highest mark on Glatt Consulting's Credit Union Industry HealthScore.
"We are no different than any other credit union in our desire to use technology in supporting our members," said Tony Hildesheim, SVP of information technology at the $2.5 billion CU. "What we do differently is work diligently to ensure we select cost-effective technology and ensure that it is used by our members."
Tom Glatt, founder of Glatt Consulting, explained that the "Credit Union Industry HealthScore: is a composite financial performance score reflecting the financial health of U.S.-based credit unions.
"Every quarter, we score all 6,100 credit unions give or take," said Glatt.
The HealthScore calculates overall credit union health by scoring/grading credit union performance across 11 different key ratios including: net worth, ROAA, operating expense, efficiency, charge-off, delinquency, loans, deposits, loan-to-share, asset growth, and membership growth. Grading is based on a five-point scale, with 0 reflecting poor and 5 reflecting exceptional health.
"Redwood CU is in an area of the country, a little north of San Francisco, that it a tech hot bed. They place a heavy emphasis on the technology they offer members," said Glatt. "They have developers on site and not too many credit unions have that. This defined emphasis on technology I believe has helped them maintain a high level of financial health."
Apple Pay
With 242,000 members and 16 branches, Redwood CU recently undertook a couple of technology initiatives that have proved successful. These include offering Apple Pay and replacing all 35 automated teller machines with NCR ATMs.
The decision to offer Apple Pay was to remain competitive, but also to meet the expectations of Redwood CU's approximate 45,000 members who are monthly mobile banking users.
While downloads of the mobile app is divided near equal between Apple and Android users, Hildesheim said he sees about twice as many Apple users logging in compared to Android users. The recent rollout of Apple Pay has been deemed positive thus far, though he noted there were lessons to be learned.
"The major area with potential impact to members is in the registration process, if their identity cannot be confirmed by Apple/Visa," he said. "We set up a special phone queue and the call center was prepared to help members through this process quickly. That made the experience very good."
By tracking member transactions, Hildesheim said he has seen a slight uptick due to Apple Pay, but couldn't yet confirm whether it is a direct result of adding Apple Pay as there are still limited retail locations that accept the new service. With regard to the Apple Watch, he added: "We don't know of any Apple Watch usage and have not made any specific application for the watch."
ATM Imaging
Four years ago, Redwood CU took on a more detailed technology initiative when the decision was made to update its ATM fleet to image-enabled NCR ATMs. Since then, new services were added including preferences.
"We have seen significant usage in members setting their preferred language, quick cash and receipt options," said Hildesheim. "This information has been beneficial in understanding member behavior as well."
Another ATM initiative was enabling OAR (open account relationship), which allows members to obtain cash and transfer funds between several account types as well as making loan payments at the ATM.
"A side benefit that our members like is that the nickname they place on their account in online banking now appears at the ATM, so that the experience is consistent," said Hildesheim. "We also made this the default at the teller line to ensure consistency in all channels."
As with Apple Pay, a learning curve was realized Redwood CU rolled out its new ATM fleet. Hildesheim explained that educating employees and members on related services was critical to the success of the costly upgrade.
"If members come into the branch and stand in line to make a deposit, we take the opportunity to offer them a better alternative through ATM or mobile," he said. "There are many who simply forget the service is available or who are intimidated by it because they seldom or never use it."
