It might be a good time to think proactive, rather than reactive.

Is it time for Credit Unions to go Virtual?

The labor market has had 20 consecutive months of sustained job growth. The unemployment rate has been hovering around a 50-year low. It’s really no wonder that employers are having to boost hourly and salaried pay just to compete for workers.

Credit unions are in the same boat. It’s harder-than-ever to find new, qualified personnel. Some jobs stay unfilled for months. Some credit unions are even running marketing campaigns to attract new tellers, on top of their regular marketing promotions.

But what’s a CU to do when they can’t find employees? It might be time to try something new. We know a few CUs that have made the move to virtual services, instead of chasing the old meatspace normal. And why not? With today’s technology and connectivity, you can absolutely do more with less.

Here are a few ideas for you to consider, getting more and more “virtual” with each step:

Replace your ATMs with ITMs

A midsize west coast credit union had to shut down one of their branches during COVID. Once the crisis seemed under control, they were left with a conundrum; should they open up the branch as it was (and try to find new staff), or do something different? They chose “different”.

They reopened the branch, but instead of ATMs or a teller line, they put in ITMs (Interactive Teller Machines). There are two ITMs outside available 24/7, and two inside. These ITMs can do far more than an ordinary ATM, and during business hours, the member can connect with a representative over video to do even more.

With this change, all teller transactions are now handled via the ITMs. During business hours, the minimal branch staff on hand can answer questions, open accounts, and handle loan applications and questions.

While the credit union has no plans at this point to go completely virtual, they are replacing ATMs with ITMs at all branches so members can get more done, faster. Sounds like a rousing success to me.

Outsource jobs to virtual staff

A small southern credit union suddenly found themselves needing a marketing department. They promoted someone from their staff to manage both social media and marketing, but it’s hard for one person to do it all. They needed a full marketing department with a wide variety of talents, so they hired us to help with all aspects of their marketing strategy, from planning, to automation, concepts, creative, and design.

With a new, virtual marketing department to make their ideas a reality, their marketing results have really taken off. With more automation, and by outsourcing creative to iDiz, their marketing person now has the time to oversee several campaigns at once, stay active on social media, and get things done quickly when something new pops up. She’s even had time to fill in a teller line in emergencies (hence an ad campaign for new tellers.) It’s been a great partnership.

There are other CU-savvy vendors and CUSOs offering all kinds of virtual services where you might otherwise need to hire, train, and retain staff. These services can handle everything from outsourcing IT to providing a virtual CFO. If some of these services allow you to do more for your members at a lower cost and with better quality and results, that could be a win for your members.

Shut down your branches and go completely virtual.

Okay, I know that sounds pretty drastic. But it has been done. Successfully.

In fact, their success has been so obvious that they decided to share their journey with other CU peers.

In short, NorthPark CCU has been working on the idea of a virtual credit union since 2015, when Carma Parrish took over as CEO. Their vision was to “provide financial services in robust deliverables”… and to “minimize its operating expenses to improve its owners’ capital for the greatest return.” As equipment came up for renewal it was replaced with virtual-friendly hardware. Desktops were replaced with laptops, and phones and servers moved to the cloud. Every week at staff meetings they talked about processes and transactions that needed a better solution. One by one, they worked out ways to improve.

First they did their research, in order to know how many of what transactions were being done in the branch. They didn’t have the core capabilities to track these, so they had each teller tally them by hand. Then, once they had the necessary technology in place, they asked for input from an advisory board of local leaders to make sure that virtual branching would benefit their members and market. They showed their staff how moving to virtual would take away the traditional hierarchy of the credit union and provide more potential for career advancement. Next, the Board approved both the strategy and the measurements of success, and the process began.

Every member who walked into the branch was asked the exact same thing –“Did you know you could do this transaction virtually?” – then taught how. One by one, members stopped using physical branches.

Once the Board was satisfied by the success of the three key metrics, the first branch was closed in 2019, and the second branch (down to less than 10 members a day coming in) was scheduled to close 2Q2020. On March 17, 2020 NorthPark closed the two remaining branches because of COVID, and went completely virtual. When they later decided to remain virtual and not reopen a branch, NorthPark deposited a $65K profit-sharing dividend from virtual branching savings to all of their members.

They also went paperless in 2021, and are letting other not-for-profit organizations use their branches free of charge. They are even planning on turning one branch into a collaborative Community Resource Center. No wonder they have consistently high numbers on Google Reviews these days.

Is going virtual a good option for your credit union?

Going virtual covers a whole range of steps. Some credit unions may be willing to take one or two of those steps, while others won’t even consider them.

But change is happening all around us. Credit unions are going through a lot of changes these days. Mergers continue to increase, which means the number of credit unions gets smaller. Fintechs are competing with MegaBanks, both of whom have deeper pockets to target your potential and current members. So making a change may be a matter of “when” rather than “if”, for many of you.

It might be a good time to think proactive, rather than reactive.

Kent Dicken

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