CLOQUET, Minn. — To close the convenience gap between credit unions and banks that have branches on every corner, some credit union aren't seeking to add bricks, but instead add hours.
One analyst suggests it's a good strategy. Rocky Clancy of JD Power & Associates recently told attendees of Credit Union Journal's Grow Show that while convenience of physical locations continues to be a major vulnerability for credit unions, one way to bridge the gap without the cost of building new branches is to extend the hours at existing branches.
Members Cooperative Credit Union here has extended its hours of operation at all six of its branches, with some offices now opening at 7 a.m. and not closing until 6 p.m. every weekday.
"We just felt that our membership was working at the same time we were open so they couldn't get in to transact their business," said CEO Tammy Heikkinen. "We're primarily blue collar workers with daytime jobs though we do have some businesses that run shifts. On our lunch hours would be a lot of traffic and I don't think we were really fulfilling our mission with members when our lines were too long."
Heikkinen does not expect the new hours to impact the bottom line negatively as the back offices of the buildings that will be open the earliest and closing the latest were already up and running. The credit union is not increasing staff to keep up the longer hours either.
Spokane, Wash.-based Numerica Credit Union has expanded both its weekday an weekend hours, with two of its branches open from 9 to 7 during the week and 9 to 5 on Saturdays. Fourteen of its 17 retail locations are open for at least half of the day on Saturday. The extended hours expand FTE by 1.5 at branches open for the half day on Saturday; the two branches with the longest hours have an additional two FTEs, EVP Jennifer Lehn told Credit Union Journal.
"Where the bigger costs lie, however, is in support functions that extended operations require," she continued. "Our call center is open all day Saturday to match branch hours; information technology must be staffed, same with collections and central loan underwriting. We've held off on staffing departments such as card services, but the request to have them available has certainly been there. We offer a full-service operation on Saturdays, so member expectations are fairly high."
Along with additional man-hours and support costs, the $925-million institution has also seen staff turnover directly attributed to asking employees to work on the weekend. But the credit union is seeing its investment pay off.
"We have incurred these extra costs because we absolutely believe that the benefit increases membership and loyalty," noted Lehn. "Just as an example, our member growth in 2008 totaled 6.28%...33% higher than other credit unions in our peer group."
Why One CU Opted Not To Add Hours
But over at Spokane Teachers Credit Union, it opted three months ago against extended hours when it was opening its newest branch.
"We determined not to go with the extended hours because of the technology we've deployed and our shared branching," said Director of Branch Operations Patsy Gayda. "If we had made the decision [to extend hours] it would have been full service. It just didn't make sense."
The expense of bringing in backoffice staff was simply not worth the potential benefit, Gayda continued, and the technological solutions in place now suffices for members who would need teller help on weekends.
"Our membership is not asking for [longer branch hours] either," she added. "And if we did do that it would be real hard to roll that back if it wasn't successful."
Expanded operating hours is part of a larger plan Members Cooperative CU outlined for this year to increase its walletshare and attract additional members. The credit union already utilizes voice and Internet banking, but Heikkinen pointed out that staff determined that the members wanted an increased opportunity to touch multiple contact points and expanded branch hours satisfies that demand.
"You have to look at your membership base right now-what kind of members do I have right now and what do they want," she said when asked how a credit union should determine if increased operating hours will be worth the investment. Though the $253-million CU may not see more transaction volume because of the extended hours, Heikkinen is hopeful that the additional cross-selling opportunities will bear fruit here.
"When we strategically looked at it we wanted to place ourselves at a competitive advantage," she explained. "When you increase hours it doesn't mean you increase transactions, you may just spread out the transaction over the hours. But that gives us time to expand our relationships with our members because we're not so crunched."
"We realize that as a credit union we'll never have the branch convenience of a Bank of America or Wells Fargo," Lehn added. "So the expanded hours do tend to level the playing field."
