You've really got to give some credit to credit unions; they're remarkably resilient. While a number of midsize financial institutions and community banks are closing branches in favor of a lighter footprint, credit unions are in the midst of resurgence in a number of respects. For instance, according to the National Credit Union Administration, they've experienced a boomlet in membership, topping 120 million in 2020, up from 90 million in 2010.
They're also quite rich in assets and poised to reach $2 trillion within the next few years compared to $1.2 trillion a decade ago, based on NCUA data. Even American Banker is documenting the credit union explosion, out with its latest "Best Credit Unions to Work For" report.
What explains credit unions' newfound fame with the public and among finance professionals? It may have something to do with their focus on technological innovation, something that other FIs have been more reluctant to do.
How the nation's first credit union embraced technology
Look no further than the nation's original credit union as the latest example. With core-integrated interactive teller machines, the 113-year-young credit union has a new lease on life. While ITMs seemed like a swing and miss initially, they're now a home run for the staff and the customers who use them on a regular basis.
Located in Manchester, New Hampshire, St. Mary's Bank is not only the United States' first full-service credit union, it was on the cutting edge of ITM deployment amongst its peers, doing so in 2019.
"The post-COVID world has hastened the pace of digital implementation and adoption."
The post-COVID world has hastened the pace of digital implementation and adoption, but before the pandemic, it was met with some initial hesitancy at St. Mary's Bank and among its members. Leo Simard, who serves as the company's senior vice president of retail sales and member experience, said that some of the biggest challenges for other credit unions who had them in place was the unfamiliar interface — users simply weren't accustomed to all the bells and whistles ITMs feature. Furthermore, the ITMs weren't integrated with the core. Thus, many of the unique benefits that ITMs boast — like new accounts opening, cardless transactions and real-time bill pay — weren't available for members to try out.
But Simard was able to avoid these mistakes by implementing a smarter rollout, teaming up with Hyosung America and BranchServ Convergint for the ITMs and the core integration installation which facilitates a 'self-service first' approach. This enables members to perform the vast majority of transactions without assistance.
"Through vendor and internal training, we held one-on-one sessions with employees and guided them through the experience both for self-serve transactions and remote teller assistant transactions," Simard said. These training sessions enabled employees to show members how to use ITMs, Simard added, providing "in-person assistance for each new ITM deployment to educate members about the capabilities of our ITMs and guided them through the transaction process." Ultimately, he noted that the credit union had "significant, positive feedback from members who have used the machines. Based on this, our (St. Mary's Bank) investment in the technology is giving us an improved member experience."
Other ITM success stories
ITM adoption has proven to be invaluable for other credit unions as well, especially during the height of the COVID-19 pandemic. Josh Wade, chief operating officer of Alliance Credit Union in Texas, told ATM Marketplace that their financial institution's ability to get through their challenges was made easier by core integration ITMs.
"Members were able to use the machines at their convenience and the perception of not being a 'face-to-face' transaction eased some of their concerns," Wade said. "We were able to staff all of our ITM's Active Teller functions with one person, therefore reducing staff in the office and offering better social distancing options."
"Big banks have spent big bucks on technological innovation, integration and implementation."
In a January 2020 podcast, Jelena Williams, chairperson for the Federal Deposit Insurance Corporation warned that financial institutions that fail to embrace technological innovation do so at their peril. As summarized by The Financial Brand, Williams noted there are two potential avenues that community banks and credit unions will travel over the next decade: the digital one or the analog one. If it's the former, the institution will be that much closer to the successes and capabilities larger banks are now experiencing, both in terms of profitability, footprint and membership. If it's the latter, then it's only a matter of time before it folds. In short, the gap that separates the smaller players from the larger ones will be impossible to bridge. Or as Williams put it, the gap will be "an unbridgeable gorge."
That's largely because big banks have spent big bucks on technological innovation, integration and implementation. In 2020 alone, for example, one of the country's more well-known financial institutions spent more on these efforts than America's 59 banks with assets ranging between $10 billion and $50 billion combined, according to The Financial Brand.
Whether you run a credit union, community bank or any other financial institution, embracing tech today can lead to a brighter, more efficient tomorrow. BranchServ Convergint has the solutions that can show you the way. Contact us today to learn more about what those are.