Reports of Branches’ Demise Greatly Exaggerated
Members continue to embrace branch services, such as instant-issue debit and credit cards.
For months, predictions have abounded about the imminent demise of branches and branch services.
It’s no wonder, therefore, that credit union CEOs and other decision-making executives are cautiously considering the “next big thing” for their branches. Many wonder, “Will our co-ops become “iCredit unions” that figuratively, if not literally, occupy a shelf in the Apple Store?”
Or will the question, “Do you have an app for that?” become an answer in providing quality member service?
These questions may seem overly lighthearted. However, there is reassuring news coming from the Pacific Northwest.
Our client, Scott Daukis, executive vice president of operations at TwinStar Credit Union, Olympia, Wash., explains a fresh investment the $800 million asset credit union made in all of its branches: Instant-issue credit and debit cards.
This might seem quaint if you believe futurists who claim that 30% to 50% of branches will be gone in the next decade. But for TwinStar, the in-branch instant issuance program has been quite successful.
In-branch issuance of debit and credits cards has been around for some time, but recent advances in printer and software technology have made the issuing process much simpler.
The older machines were bulky, and used pre-printed cards. Not only did these machines take up a lot of space, they required branch managers to inventory and track all of the cards.
Most importantly, the credit union could only issue cards from the pre-printed stock on hand. For institutions with multiple debit and credit programs, this meant either keeping large quantities of stock on hand or issuing only one or two types of cards in the branch.
Today’s printers use blank cards that are coded during the printing process, relieving branch managers of tiresome administrative burdens and empowering line staff to issue and activate all types of cards, credit or debit, during the account-opening process.
According to industry averages, 74% of account openings take place within a branch. This is a tremendous opportunity for credit unions to deliver cards to their members in minutes instead of days or weeks. Whether it’s their first card with the institution or a replacement for a lost or stolen card, members are delighted at the instant-issue process.
Not only does instant issue maximize member satisfaction and loyalty, members are far more likely to use these cards the same day they receive them. For TwinStar this has meant increased interchange revenue, helping the credit union to mitigate shortfalls resulting from the Durbin amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2012, which cut debit interchange fees roughly in half.
In fact, since its implementation in November, TwinStar has seen increases in account openings and card activation and usage. The credit union anticipates recouping its branch investments within the first year through increased interchange income and savings from reduced issuing expenses.
Moreover, instant issuance permits TwinStar to confront concerns on the horizon, such as EMV and custom photo cards.
The credit union is in the process of converting its card programs to include an EMV chip. TwinStar’s card printers are already equipped to support the EMV technology and can accommodate the delivery of the smart chip cards in each branch.
Finally, TwinStar is introducing “Pic Your Pic,” an online platform that allows members to design their credit and debit cards with pictures of loved ones, pets, and friends. With instant issue, members will be able pick up their Pic Your Pic card at a branch within a day of creating the card online.
While the question of “how will we bank in the future?” confounds prognosticators, the answer is obvious to forward-looking credit union executives.
Today and in the future, supporting member services in branches and growing revenue do not have to be mutually exclusive propositions.
CYNDIE MARTINI is CEO of Member Access Pacific, a leading provider of the Visa DPS debit, credit, ATM, prepaid, and mobile processing platform for credit unions.