When the coronavirus (COVID-19) pandemic hit in early 2020, most credit unions shifted to a digital-first service model due to social restrictions.
Alliant Credit Union in Chicago made that shift several years ago. The $13 billion asset credit union got its start serving United Airlines employees and has always relied more heavily on convenient remote services rather than its small branch footprint to serve its national membership.
When Alliant expanded its field of membership beyond United Airlines employees in 2014, it moved toward a digital-first, branchless model. By 2020, the credit union had only two branches—only one of which was publicly accessible—and it closed them permanently soon after the pandemic hit.
“COVID-19 might have accelerated our transition to a fully digital branchless model, but it wasn’t the cause,” says Alliant President/CEO Dennis Devine, who took over the credit union’s top spot in July. “But that’s not just us. Transactions at all credit unions and banks increasingly are taking place through digital channels.”
That creates less need for physical square footage and associated costs, he says.
“Because we don't have that cost structure, we're able to invest in our digital experience and offer among the highest rates and the lowest fees in the industry,” Devine says. “That's a great value for our members when they weren’t using the branches that much to begin with.”
Alliant members can do virtually everything digitally, including applying for loans. This year it has seen a 38% increase in loan originations, with first mortgage originations more than doubling.
‘You want to be high touch where you can add value to the experience.’
Dennis Devine
Devine is quick to point out that Alliant’s service model includes the human touch of a robust member care center.
“You want to be high touch where you can add value to the experience,” Devine says. “We offer a high-quality live-agent experience. That's an important part of our model.”
Through other cost efficiencies achieved through that model, Alliant also invests in gaining insights from data analytics to create more personalized experiences through each member’s digital journey.
“We’ve invested in a team of designers that is constantly listening to what our members are telling us and creating personalized experiences based on what matters to each individual member,” Devine says. “Where we can keep it simple for them, we do that. Where we can provide value, we’re there to assist them.”
This model allowed Alliant to transition quickly to changes brought about by COVID-19. “Our members didn’t have to learn how to bank with us differently,” he says. “They were already engaged with us digitally.”
Perhaps most importantly, Devine says Alliant is well-positioned for 2021 and beyond.
“From a practical standpoint, credit unions will have to continue to rethink the branch model,” he says. “Are they open? Are they closed? But with this model, we’re cost-efficient and we offer as good as rates as anyone. Consumer behavior has changed with this pandemic. We’re full steam ahead.”
Credit Union Magazine’s Summer 2023 issue highlights the lending outlook for the rest of the year, how credit unions leverage fintech companies to boost digital lending, the power of lending partnerships, common Bank Secrecy Act violations, and the shift board members must make when becoming chair.
