NASHVILLE, Tenn.-When flooding forced the closing of a half-dozen branches last week here, several credit unions pointed to the relief offered by having shared branches available elsewhere at which members could conduct business.

While convenient for credit union and member alike, those types of disasters aren't really the driving force in the ongoing growth of shared branching at credit unions. Instead, says proponents, it's several new technologies that have been developed that are helping overcome several long-standing obstacles to even greater adoption of the concept.

In addition to cost issues often cited by credit union CEOs reluctant to join a shared branching network, others have expressed fear that members who perform transactions at so-called foreign locations will be "stolen away" by the host CU-despite contractual requirements to the contrary-while others have criticized shared branches as little more than a glorified ATM; a place where only simple transactions are performed with no opportunity for cross-sales.

But evolving technologies-combined with ongoing pressure from members for more convenience-are working to breaking down some of those barriers.

Craig Beach, SVP of marketing and business development for CO-OP Shared Branching, Atlanta, acknowledged transactions continue to drive traffic at shared branches, but "As far as the evolution goes, though, the technology that drives shared branching is being leveraged by credit unions to get into other products-especially the use of kiosks."

CO-OP offers access through V-com kiosks at 7-Eleven stores, for instance. The kiosks that presently are in the market are able to perform virtually any transaction that can be done with a live teller in a branch, Beach noted, predicting that it will be kiosks that ultimately facilitate cross-sales.

"When someone walks in and identifies himself to the kiosk, the kiosk software can give him information on a product," he explained. "This is different from a teller in a shared branch, because those interactions must be kept neutral. As technology continues to improve, I think we'll see some avenues that will allow credit unions to promote its products, regardless of which channel they use. We already see this with call centers."

In Lakewood, Colo., Doug Burke, president and CEO of CU Service Network, said taking full advantage of shared branching as a sales window "has always been an elusive component." His company has worked with participating credit unions to look for alternatives, "such as a portal on a PC in a branch where members can have access to more information."

"There are different philosophies on how to pursue this," Burke said. "If there is a self-service kiosk, with a PC and a phone, then it doesn't burden the staff. Obviously the configuration would be up to the individual credit unions. What we've seen is, No. 1, the need is convenience. Studies have borne that out-when members see the credit union as convenient, they might add a car loan and/or other services."

Ongoing growth in networks are boosting that convenience. "The technology is well-positioned and there are new delivery channels coming on board all the time," said Beach. "Last year we saw 578 new locations added to the CO-OP Shared Branching network. It would be very challenging for any credit union to come close to those numbers of new branches."

CU Service Network's Burke sees opportunity in those CUs that do not participate in shared branching.

"There are some states where it is well-entrenched, but in others it is a new concept. In Colorado we've had it for 17 years; in Iowa only three years. Because of this difference in maturity, we have to use different methods in different markets. But in any case it is exciting because there are a lot of good things going on."

Among those good things is that member traffic continues to increase.

"In 2009 there was about a 4% increase from the previous year," he reported. "It is difficult to measure transaction volume sometimes because of mergers. If two credit unions merge that both were shared branching participants, then future transactions at each other's branches would not show up as shared transactions. But in spite of that we are still seeing growth."

CU Service Network recently welcomed San Juan Mountains CU, Montrose, Colo., as the 100th credit union to join shared branching through its network.

The transaction volume increase is similar in other networks. Beach reported the CO-OP branch network recorded 37,000 deposit transactions in 2009, up from 32,000 in 2008. Dollar amounts were up, as well.

As reported in CU Journal earlier, (How Shared Branching Drives Revenue Is Explored In Study, April 19, 2010), Raddon Financial Group found in a study sponsored by CO-OP Shared Branching that credit unions have leveraged shared branching to capture consumers who are dissatisfied with banks-including many higher-revenue households.

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