SAINT PAUL, Minn. — With more than $800 million in assets, 63,000 members and 190 employees, Hiway FCU here has grown over the years, but it hasn't added a single branch. In fact, the "no-branch" approach is an integral part of Hiway FCU's business strategy.
Jeff Schwalen, CEO of the credit union, said that the investment of multiple branches is not in "Hiway's members best interests."
"We have two offices-one is administrative, one is a retail office," Schwalen said. Everything the CU does in relation to its members is done from the retail location.
"This is the history we had before I got here," Schwalen said of the no-branch approach, "and I endorse it. We feel we can do as much with phone or at-home transactions. Most members auto-deposit. In a former life, I worked in savings and loans in the '70s and '80s, and managed several branches. It's a huge expense."
Schwalen said many members have never visited the CU, while Hiway FCU has had consistent membership growth of 4%. "We open checking accounts on the web, over the phone, or mail out a package," he said. "The current economy is actually helping us. "There's a flight to safety."
Hiway does its marketing mainly in the local St. Paul market, including billboard advertising and "a lot of web presence," Schwalen said.
Hiway FCU's field of membership is the Department of Transportation (DOT) and businesses that work with DOT. The CU regularly surveys members, sending out about 700 surveys per month. It gets about a 20% response rate. "They will tell us if there is a complaint," Schwalen said. "We usually score 4.8 on a five-point scale."
There is also an area on the survey for members to write in their opinions. Examples received include, "We'd like to have a Saturday hours," or "We'd like to have a branch closer to our house," Schwalen said. "But I've talked to other credit union CEOs who have several branches, and their members still complain about not having a branch close enough."
That's why Schwalen advises CUs invest in IT and a good phone system, he said. "I firmly believe it could work for other credit unions," he said. Another tip: be active in the community, Schwalen advised. "It's not 'If you build it they will come,'" Schwalen said. "You don't necessarily need to have that approach."
He also suggesting having a live person answer the phone. "Everyone that calls our credit union gets a live voice. It's been a godsend for us really. We're getting to be known that 'I can call Hiway and get a human voice.' That's really helped us."
Moreover, when a member applies online for a loan, a CU representative contacts them by phone within 24 hours. "That's so important, especially for a first mortgage that tends to be more complicated," Schwalen said.
