CUNA Strategic Services alliance providers:
1. CU Solutions Group: cusolutionsgroup.com
2. Diebold Inc.: diebold.com
3. Digital Insight: digitalinsight.com
In 2008, the U.S. economy was starting to tank, especially in manufacturing-dependent Michigan.
“The state had hit an all-time low and people were leaving Michigan to find jobs elsewhere,” says Lisa Rizk, senior vice president, sales and partner relations, at CU Solutions Group, a CUNA Strategic Services alliance provider. “This impacted credit unions, who were afraid of losing members as they moved out of state.”
That’s when CU Solutions came up with its “Invest in America” program. “Because we’re based in Michigan, we needed to do something with and for the auto industry, the state’s economic backbone, as well as credit unions,” Rizk says. “Banks weren’t lending, while credit unions had billions to lend. So we approached the ‘Big Three’ U.S. automakers with a credit union-linked sales program where members could receive substantial savings on vehicles through the manufacturers and low-rate auto loans through credit unions.”
Invest in America went national in 2009 with General Motors (GM) and Chrysler, she adds. “Credit unions became very important to the two automakers in helping generate sales and funding the loans.”
Rizk says the program aims to help credit unions retain current members while drawing in new ones. “Auto dealers started letting consumers know that if they joined a credit union, they could get good deals on cars. Credit unions started picking up new members, attracted by lower rates and great prices on vehicles.”
Through Invest in America, credit unions ultimately generated 360,000 vehicle loans worth $8 billion. The program eventually morphed into a more extensive rewards program, “Love My Credit Union Rewards,” with several options credit unions can off er members. In addition to the Credit Union Member discount from GM, rewards include:
“We estimate that we’ve saved credit unions members $1.1 billion over the years with no stress or pressure on them,” says Rizk. “We’ve generated $72 million in revenue that we’ve returned to the industry, plus an estimated $13 million in 2014. Plus, there’s no cost for credit unions to participate, and marketing materials are provided for free.”
For David Adams, CEO of the Michigan Credit Union League and CU Solutions Group, Love My Credit Union Rewards creates a great credit union/member cycle.
“The program’s exclusive savings encourage not only member loyalty and membership growth, but when aligned with a credit union’s core products and services, it helps boost auto loan volume, increase debit/ credit card transactions, and expand noninterest income.”
SIDEBAR "Reach On-the-Go Members With Text Message Banking"
A branch transformation
“Branch transformation” is a soupto- nuts, kit-and-caboodle concept. “It means the complete rethinking of a financial institution’s branch network— format, role, technology, and customer/member experience,” says Raja Bose, vice president of branch transformation and advisory services at Diebold Inc., a CUNA Strategic Services alliance provider.
The branch remains a vital tool in developing and sustaining member relationships, he says. When examining their branch networks, credit unions should determine whether they have the right number of branches in the right places.
“In the digital world, ‘branch’ has come to mean all touch points,” Bose says, “from a standalone ATM to a small branch to the flagship location—and even people’s smartphones.
“When considering the location of a brick-and-mortar branch,” he continues, “credit unions should ask, ‘Should it even be there? Are there enough consumers to justify one? What’s our share of deposits in this market? What are its age groups and income levels? How many [potential users] show a propensity for selfservice?’ ”
Then, consider the branch’s look, feel, technology, and staff. “A branch located next to a retirement community will have a different look and feel from a branch located next to a university, so format will vary according to function,” Bose says.
The need to appeal to a younger demographic led to Diebold’s creation of what it calls “New Model Branches,” which are much more self-service oriented. “They’re more open—no barriers or teller walls— so staff and members can easily intermingle,” Bose explains.
Such branches have certain “experience zones,” including:
“Another consideration is whether you’re looking to maintain or expand market share,” Bose says. “Once you’ve decided what kind of branch you want, technology is an easily installed enabler.”
He describes Diebold’s five-step approach to a branch transformation: Define strategy, assess current strategy, develop road map, implement solution, and monitor actions/ assess success.
“Unfortunately, some credit unions going it on their own start at step 4,” Bose says, “so when they reach step 5, we’ll get calls asking, ‘Why aren’t we seeing improvements or a difference?’ ”
Much of Bose’s work centers on staffing, where cost effectiveness is a factor.
“Say you have a nine-person branch: four salespeople and five tellers,” he says. “You convert instead to four ‘universal tellers’ who combine both clerical and sales skills, coupled with increased self-serve options. The people you recruit are often those with retail, ‘outwardfacing’ experience. Sometimes you can find them in-house. Typically they’ll self-select from your current employee roster once the job description makes it clear there will be sales quotas.”