OMAHA-Centris FCU here has launched a fleet of self-service kiosks to serve under-banked consumers as it seeks to expand its marketshare.
The 73,000-member, $485-million credit union's strategy for the kiosks is based in part around a 2009 FDIC study that revealed more than 18% of the population in the region Centris serves is unbanked or underbanked, according to Laura Castro de Cortes, VP of alternative financial services/emerging markets. Those figures are actually low when compared to other nearby regions in the study, including nearly 36% in Wichita, 26% in Des Moines and 29% in St. Louis, figures Castro believes may have increased since their initial release.
The kiosks, which Centris is calling "Bank In A Box," use technology from Nexxo Financial Corp. Nine kiosks have been deployed, including five in Centris and four in local supermarkets. The machines use touch-screen technology, and after users log in they can select from a menu of options, including check-cashing, sending money to Latin America, buying money orders, buying pre-paid cellphone minutes and more. The machines also have a phone that connects directly to Nexxo's call center, with English and Spanish language options available.
Centris is offering the services as an agent of Nexxo, running under its license, said Cortes, and can offer the services to non-members because it is not acting specifically as a dedicated FI in this case. All machines are branded with Centris logos.
ROI On Kiosks
Cortes declined to reveal the costs associated with the kiosks, but said that Centris expects to see an ROI on the machines within 18 months and to grow to 16% marketshare in Greater Omaha within the next three years. The credit union expects to see about 1,500 registrations for the machines in the first year and expects to cash about 13,000 checks.
While Cortes said Centris isn't specifically targeting low-income consumers or minorities, "we know there's a good 15% to 20% (of potential users) that are going somewhere else to do these services."
Centris has placed the kiosks in areas where they are most likely to be utilized by such populations, including machines inside the vestibule of its new South Omaha branch, which has a heavy Latino population.
CFCU also offers an "Ambassador program" for employees at supermarkets with Centris kiosks, giving those employees discounts on services the kiosks can provide. Centris has brought on 15 new employees to staff the machines and help consumers learn to use them, hiring from within the communities where the kiosks have been placed.
How The Kiosks Work
Users pay a fee for each transaction they perform on the machines, though those participating in the Ambassador program receive a discount. Government-issue and printed payroll checks cost 1.50% (1.25% for Ambassador members), while hand-written payroll checks cost 3.5% (2.99% for Ambassadors). Money orders are $1.50 ($1.25 for Ambassadors), bill pay is $2.50 ($2.25 for Ambassadors), and topping off pre-paid cell phone minutes costs users $3 ($2.50 for Ambassadors). Cortes stressed that the fees Centris charges are lower than the competition in that market.
Cortes explained that the first time someone registers to use the machine it can take between five and 10 minutes, because of the time needed to set up accounts, verify checks and more. After that, most transactions can be done in as little as 30 seconds.
Centris plans to use Bank In A Box as part of its expansion strategy, and Cortes said that the credit union has branches in North Platte, Neb. And Grand Island where it plans to install them.
"It's all very tailored to where our consumers are," she said. Cortes compared the systems to the popular Redbox DVD-rental kiosks. "Redbox spread like wildfire not because people tried it by themselves, but because people said it's so easy and they taught each other. We know that's how we're going to gain, because it's person to person."