AUSTIN, Texas–The operations department for $9.5 billion-asset Security Service Federal Credit Union – which is headquartered in San Antonio and has operations in Texas, Utah and Colorado – wanted a way to look at each branch and region it serves and determine every branch’s performance. This led to a thorough and detailed project with unexpected consequences.
Jason Scott, SVP of enterprise performance and analytics for Security Service FCU, told a crowd at the 2018 CUNA CFO Council conference here once the branch performance and efficiency data was collected, the management team realized it could be used in other areas of the credit union.
The first step? “You have to collaborate,” he said. “You have to discuss the wants and needs of getting the data, and you have to make sure you get buy-in on the data and any other information used.”
With branch performance data, the CU can make better decisions on staffing, plus improving overall branch evaluations, Scott continued. For its project, Security Service used Axiom, which is data-profitability and forecasting software, to put out all transactional, loan and deposit data relating to activities at each branch.
The next step was performing time studies. Branch managers provided input on the time it took to do various activities and took an average of their times that would be applied to activities.
“Be aware that when discussing time in a study, the natural reaction is to lowball the estimates so as to look more efficient,” Scott warned. He advised following up with in-branch visits and job shadowing to provide detailed insight into total time allocated to tasks such as opening a checking account, applying for a secured loan and other interactions. It is important to add in administrative duties, including the work done after the member leaves.
Scott created charts comparing and contrasting branches in the same region in terms of loans, deposits, transactions and fees. For loans, columns counted such factors as: full-time employees, new members, miles to the next branch, number and dollar amount of new secured and unsecured loans, total new consumer loans divided by number of full-time employees and more.
“To measure the performance of large branches against smaller branches, divided total deposits by full-time employees,” Scott said.
Once each branch’s loans, deposits, transactions and fees were quantified, and total activity time calculated, an efficiency ratio could be derived.
“Once you have the data, create dashboards to be able to show it to executives,” he advised. “You want to have data to show to the board and the executives, not opinions.”
As a follow-up to the original study, Security Service FCU created a branch matrix, comparing miles to next branch, leased branch versus owned, loans, CDs, savings, checking, total operating expenses, total revenue, revenue/expenses ratio. Scott said this assisted in determining if any branches needed to be restructured.