Altura Credit Union has done away with one of the credit union movement’s most widely used conveniences – and biggest selling points to new members – and many Altura members couldn’t be happier about it.
The Riverside, Calif.-based CU recently elected to stop participating in the CO-OP Financial Services Shared Branch network, citing long lines and wait times that led to decreasing member satisfaction.
While the credit union will no longer process non-members’ shared branching transactions, Jennifer Binkley, president and CEO of the $1.2 billion CU, was quick to point out Altura will continue to participate in CO-OP's ATM network, which allows members of other credit unions to use Altura ATMs without incurring a fee.
Because Altura is the largest credit union in Riverside County – with 13 branches around the area known locally as Southern California’s “Inland Empire” – it was a popular choice for those looking to conduct shared branching transactions. Unfortunately, Binkley said, this led to long wait times in branches as large numbers of people from other credit unions used them to conduct business.
While Altura may be “sacrificing some revenue” as a result of its decision, which went into effect Nov. 29, Binkley said the change should reduce lines and wait times “significantly,” which will “greatly benefit” its members.
“For the past two years we have seen member satisfaction deteriorate, especially in the categories of convenience and time in line,” Binkley told Credit Union Journal. “We looked at staffing in branches and we were staffed higher than the industry. We almost could not keep up with transactions.”
The CU’s branches in the desert cities of Palm Springs, Palm Desert, Indio and Hemet saw the most shared branching traffic, she added.
When examining transactions just by Altura members, volumes were lower than peer group CUs, Binkley explained. However, 44 percent of in-branch transactions were shared branching transactions, which pushed its overall transaction figures much higher than its peers.
“We cannot keep up with that,” Binkley declared. “The sheer volume meant we were not giving great service to either our members or the shared branching members.”
Contrary to the stereotype that millennials lack patience, Binkley said it was not just younger members complaining about long wait times – it was all members.
Binkley said the CU and its staff “tried our hardest to notify people” in advance of the Nov. 29 cutoff, offering 60 days’ advance notice of the upcoming change while emphasizing Altura still would be participating in CO-OP’s shared ATM network. Those who entered an Altura branch on or after Nov. 29 are being directed to the nearest shared branching location that does not belong to Altura.
CU Journal spoke with Binkley on the first day of the new policy. When asked if the credit union had received a negative reaction she observed, “People do not like something that is not convenient for them.”
“We have not had a lot of feedback yet since it just started today,” Binkley said. “Our message is, we are here to serve our members first and then we want to support the movement. It does not make sense if we cannot serve our members. We have to improve member satisfaction, member retention and loyalty.”
While Altura looked at alternative solutions – including having shared branching transactions taken care of in a separate line from the CU’s members or allowing shared branching transactions only at certain branches – the management team eventually decided such steps would be more confusing than simply ending participation in shared branching, she said.
“Our growth model for next year includes a push for in-branch services, so we did not want to promote people visiting our branches when we could not do good service,” Binkley said. “Even millennials open accounts based on where they live and proximity to a branch – even if they use digital banking. We are marketing to new residents of the area and we have to make every channel members would use to reach us as effective as it can be – online or onsite.”
Altura will review the new policy after six months, she added.
Shared branching still growing robustly
According to Bill Prichard, director of public relations for CO-OP Financial Services, it is “not common” for a credit union to leave the shared branching network, and about half of all U.S. credit union members can access the network – and that figure is growing.
Still, Prichard said CO-OP is pleased that Altura CU is continuing its participation in the CO-OP Financial Services’ ATM network.
"The great thing about the CO-OP ecosystem is the wide variety of products and services credit unions can elect to plug into,” Prichard said, describing it as a “customizable experience.”
“Our credit union clients choose the solutions that fit best with their strategic plans, existing resources and business objectives,” he continued. “Just as members pick the credit union products that best meet their individual goals, credit unions connect with the right networks, solutions and technologies to meet theirs.
“We are honored to count Altura among the thousands of credit unions who participate in the CO-OP ATM network,” he added.
As of mid-2017, the CO-OP Shared Branch network was the second-largest retail financial branch network in the United States with more than 5,600 branches and 1,800 credit unions participating. Prichard added that the branch network “has been growing robustly in recent years,” with about 150 new branches being added each year.
“Shared branching is perhaps the truest form of the cooperative spirit within the credit union movement, and is particularly valued by members as a way to conveniently conduct their branch business when they are away from home,” Prichard said, adding it has proven to be an important benefit to the institution from a business continuity standpoint in time of emergency.
Millennial outreach successful
At the same time it announced termination of shared branching, Altura said it has seen “strong” membership growth in recent months, with a particular focus on targeting millennials. This focus included the creation of an internal marketing team of the CU’s millennial-age employees to help develop outreach campaigns to these potential members.
Altura reported it is 127 percent over its 2017 target for new members in the millennial age group.
“We are doing more this year than last year,” Binkley said. “We set targets based on the year before, looking a 5 percent increase this year.”
Altura reached out to the two colleges that call Riverside home: California Baptist University and the University of California, Riverside. Binkley said the CU created partnerships with the schools that extend over a three-year period which include Altura ATMs on both campuses, licensing, debit cards with the respective mascots and sponsorships of the athletics departments.
“The debit cards draw a lot of attention,” she observed. “We have done UC Riverside plastic for two years, while the plastic for Cal Baptist just came out this year.”
Binkley credited success to a team of 18- to 24-year-old staffers who were “outspoken” and “peer leaders.” She said they helped with the look of the plastic cards, as well as the overall the marketing campaign.
“The team meets to look over marketing campaigns and promo items. This helps with engagement and with designing products. What appeals to me at 44 is not going to appeal to someone who is 18,” Binkley said with a laugh.
Over the next year, the team will review what Altura has done as far as individual products and the campaign materials to keep the outreach efforts from becoming stale, she continued. The credit union’s iChecking product has been around for nine years and in 2016 Altura developed a first-time auto-buying product that has been modified several times to make sure it is a good fit.
“We continue to add products that appeal to the 18-to-24 age group,” Binkley said.