Everyone is talking about big changes happening in consumer banking. The prognosticators have been telling us what consumers will think and what to expect and countless articles deliver pros and cons in the debate and data that changes seemingly by the minute. I won’t weigh in on the latest version of what to expect. I can tell you from personal experience, however, that we’ve embraced self-service technologies and they’re driving our numbers.
Credit Union West is a $500+ million credit union with 11 branches in two counties near Phoenix, Arizona. We were used to having heavy lobby traffic days where an efficient queuing line was a must. We had cash dispensing machines installed so that the teller transactions would be fast enough to keep the line moving. Our labor pool amounted to four to five tellers and three to four MSOs at each location.
We always had a walk-up ATM and usually a drive-up ATM at each location. A small percentage of our members used the ATMs, but most of our members preferred face-to-face transactions with our staff. Much of our business was conducted in the branch with Tellers handling the majority of the transactions and more highly trained Member Service Officers (MSO) working with those that had more complicated requests.
About five years ago, that began to change. We added a checking product called KASASA Cash that rewards members for using electronic channels. If our members agree to accept e-statements, have at least one direct deposit and use their debit card at least 15 times each month, we give them a high interest rate and refund any ATM fees they may incur. It is amazing how that one product changed our members’ behavior.
Three years ago, we added an innovative product brought to us by Better ATM Services: an ATM-dispensed Visa Gift Card. This was enthusiastically embraced by our members. Our members could purchase gift cards 24/7 at their local Credit Union West ATM. Our ATM use began to increase overall.
We noticed that our branch traffic began to lighten up. Our on-line banking membership began to swell. The new financial rewards caused our members to try these electronic channels and the vast majority of them absolutely love it. They now prefer the self-service way of doing business.
We track all of our member transactions in a variety of ways. We look at total transactions and break that number down by either branch or electronic channels. We also look at how many are teller transactions versus MSO transactions. We separate total transactions by face-to-face transactions versus mail or electronic transactions. The results have been eye opening. Just in the past year, at some of the locations, we have seen face-to-face transactions decline 30%. Our branches are just not as busy anymore. The new reality has meant that we have had to make some decisions regarding this rapidly changing environment.
Our labor force in the branches needed to be evaluated and in most cases trimmed. We are cross training all tellers and MSOs so that each can handle any of our members’ needs as they arise. The look of the branches will be reconfigured, too. We envision doing away with a traditional teller line and opting for more private offices for each employee. Finally, the use of self-service stations within the branch will provide the member with quick and efficient service. If a member needs a simple withdrawal or deposit this could easily be accomplished by the self-serve kiosk.
Rather than adding new branches to serve our members, we are investing in new technology and opportunities to leverage our ATMs to help meet their needs. We’re offering Remote Deposit Capture that allows our members to use their smart phones to take a picture of their checks and then to deposit them electronically. We’re evaluating two-way video kiosks that can be placed in remote locations with a MSO in a central location taking care of several members at one time.
You’ve heard it before and the drumbeat will continue. Self-Service options are an imperative and will continue to drive change. Distinguishing our brand with self-service products and services is a proven winner. From where I am sitting, change is not an option. Understanding what consumers want and responding to that demand requires that each of us adapt to remain viable and profitable in this ever-changing landscape.
About the author
Bob MacGregor has been President and Chief Executive Officer of Credit Union West since 2009. He assumed his position following his role there as Vice President, Chief Financial Officer to which he was appointed in 1998.
Originally an accomplished CPA, Bob began working for a CPA firm in Miami, Florida that specialized in credit union audits in 1988. Bob moved to Phoenix, Arizona in 1996 to manage an office for another CPA firm that specialized in credit union audits. He has led or participated in over 400 credit union audits throughout the U.S. Bob worked as a credit union examiner for the Arizona Department of Financial Institutions for 1-1/2 years before accepting his position with Credit Union West.