CO-OP’s Shared Branch Network: Enabling Credit Union Competitiveness


We’re in an interesting moment for credit unions. Branches and mobile banking are currently core of most important financial consumer experiences, but credit union members are asking for more.

Building strong community relationships was always a credit union advantage. Shared branching is one way credit unions can leverage this relational distinctive to stay competitive and meaningful. Branches are still a brilliant and necessary part of the credit union commitment to serving members’ financial needs. Shared branching supports this commitment by offering better experiences, helping credit unions stay open for more members and protecting continuity of service.

Credit unions have access to a substantial network, too, that actually dwarfs many of the national bank networks. As of 2017, CO-OP Financial Services’ Shared Branch Network is the second largest branch network in the United States with over 5,600 brick-and-mortar branches and 1,800 credit union members. Self-serve terminals, branches and ATMs connect credit union members in all 50 states, providing access to financial services almost anywhere consumers live, work and travel. In total, around half of all credit union members in the US are connected to this network. That’s a lot of branches and plenty of touchpoints for credit unions looking to reach and expand to new audiences.

Where User Experience Starts

Truthfully, consumers aren’t dumping the branch experience en-masse for mobile banking. They want both.

For credit unions, marketplace competition itself has changed—it’s no longer credit union-versus-credit union. The competitive terrain has shifted. With more opportunities than ever before to connect with their finances, financial consumers are no longer tied-down to one platform or even one institution. Peer-to-peer payments and lending, mobile banking and alternative payment platforms such as PayPal are all options that today’s financial consumers relish. It’s led some observers to believe that branches are irrelevant.

There’s plenty of active speculation about the impact generational changes, too. Mobile banking is popular. 49 percent of Millennials, 31 percent of Generation X and 16 percent of Boomers use it, according to a JD Power report published this year. Interestingly, though, the same study found that 71 percent of Millennials do visit branches. On average, these consumers are visiting their local branch 11 times per year—for Boomers, it’s 14 times.

Younger consumers still value what traditional brick-and-mortar branches have to offer. It turns out that a defining preference for many of today’s credit union members is user experience (UX). Relationships matter, and physical branches allow credit unions to cement these connections with their members.

Becoming that Primary Institution

Together with smart tech, shared branching allows credit unions to provide for their members more of the high-quality user experiences that many consumers are desperate for. The CO-OP Shared Branch network helps credit unions compete in today’s challenging financial marketplace. By sharing their technological leadership, they guide credit unions and provide compelling strategies and tools that these institutions can use to meet their members’ needs.

Kathy Herziger-Snider, Senior Vice President of Debit/Shared Branch Management at CO-OP Financial Services, believes this environment is creating new opportunities for credit unions. While there’s been plenty of concern among credit unions about competing successfully in this mobile banking era, Heriger-Snider sees this as a chance for credit unions to highlight their distinctive advantages and value to consumers.

“Everybody is seeking to become that primary financial institution for the member and shared branching allows credit unions to do just that,” she said. “It really is incredible, but any member can walk into any credit union in the network and we have the ability to really retrieve the entire relationship through the shared branch network.”

For credit unions wanting to stay competitive, offering more ways to connect members with their accounts is a means of building engagement. Heriger-Snider sees digital tools, apps and mobile banking as supports and enhancements of the branch experience rather than symbols of the branch’s irrelevance.

With these changes, though, it’s tempting to invest digitally and step away from physical branches. That’s a mistake, says Heriger-Snider. Consumers haven’t given up on branches. If anything, the physical branch is now more crucial than before—as consumers travel, use new payment technologies and engage in more online purchasing, members are looking to convenient, relationally-aware branches for the financial services they need.

Local-to-National Reach

Credit unions have always been very local, community-driven institutions. Many credit union organizations are smaller, with a few regional branches or even a single branch location. They’re very close to and tuned-in with their members and the needs of their communities. Over time, some small credit unions grew into large networks rivaling regional banks in size and revenue.

These institutions knew that their members needed more. Alone, no credit union could provide a national network of branches where members could conduct transactions, interact with a live teller and seek access to financial products.

This is why shared branching is brilliant. Credit unions can scale across the country (and around the world) while preserving the fundamental relationship that’s essential to great user experience.

The Credit Union Distinction

“The concept of shared branching is a distinction that credit unions should market to their members,” says Bill Raker, President and CEO of Firefly Credit Union in Burnsville, Minnesota.

With longtime personal involvement in the shared branching movement, Raker has observed the difference having access to additional branches can make for credit unions. Through a series of different mergers and acquisitions, Firefly grew and added both branches and members from other institutions. At some point, it made sense to his credit union and its membership to use a shared branching strategy. “It did not fit for us to continue operating some of those physical branches,” he noted.

With shared branching, Firefly could continue to offer service in the same communities. “We retained a large percentage of those credit union members. We also have a lot of other members using the shared branch network—at one point, I saw that we had more than 3,500 transactions occur across 35 different states.” Firefly can have physical locations everywhere their members travel, because they’re connected to the CO-OP Shared Branch Network.

Compliance and Preparedness

Shared branching’s relevance goes beyond travel. Both Heriger-Snider and Raker agree that shared branching is also a key disaster preparedness strategy for credit unions. Emphasizing this year’s devastating hurricanes as just one example, they note that continuing to offer support for members during disasters is a central part of credit unions’ commitment to their communities.

Credit unions that were part of a shared branching network were able to refer their members to branches that were unaffected by the storms and available to provide the same financial services. “Shared branching is a security blanket and a backup plan,” Raker noted. “Federal regulators have also commented on the smart strategy of having shared branching as part of a backup plan credit unions have for how they manage their own responses during disasters.”

Shared Branching’s Moment

This may very well be shared branching’s moment to unveil the potential of credit unions to more consumers than ever. Credit unions have untapped markets and many new opportunities to offer more to their members. “I think the technology that exists in the shared branching network has yet to realize its full potential,” Raker added. He says that there’s potential growth and service expansion that shared branching and its technology can really highlight within the financial marketplace.

As Heriger-Snider claims, “Wells Fargo is only ahead of us by about 500 locations. There’s so many choices out there, but our strategy is to be the enabler of technology for credit unions. With this solution, consumers stay connected to the credit union.”

Credit unions can, in fact, use both physical branches and mobile banking to stay competitive. And shared branching successfully empowers this strategy—making this also a new moment for credit unions.

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