TUKWILA, Wash.–Membership growth at $10.5-billion BECU has been up 10% to 12% year-over-year for each of the first nine months of 2012.
“There’s no question the momentum has continued throughout this year,” said Tom Berquist, SVP of member strategies.
Berquist said BECU had a “huge spike” of new members in October 2011 as 16,000 people joined. Because of that influx October 2012 is expected to be the first month this year that will not see a year-over-year increase in new membership.
“We are forecasting to end 2012 up 8%,” he said. “Last October was an off-the-charts month, but we are happy with sustained growth. From September to September our membership has grown 11%.”
On Friday, Sept. 30, 2011, Bank of America announced its proposed $5 monthly debit card fee, Berquist recalled, “and from that day forward we saw growth.”
“Bank Transfer Day reinforced consumer sentiment toward large banks, but the lasting effect on membership growth lasted much more than we anticipated–which is a good thing,” he said. “From what we are tracking these people are not just opening a savings account to say they switched, they look like our other members.”
BECU has done a “good job of adapting” to the flood of new members, Berquist said, including installing many more ATMs than it previously had been projecting. “ATMs are an important part of our business model when it comes to transactions. We don’t have tellers at every branch, so ATMs play a big role.”
Focus On Onboarding Communications
Another change to accommodate new member growth is an increased focus on onboarding communications. Berquist said BECU sends e-mails to new members a day or two after they join to both welcome them and explain how to access their funds through ATMs and online banking.
“We let them know about CO-OP Network and that there are many more ATMs available to them beyond our network,” Berquistexplained. “We talk to people who come into our branches about Visa cards and lines of credit. On the auto loan and mortgage side, we have done a lot of work on marketing to ensure there is a high level of awareness on our mortgage offerings. We price our mortgages to be very competitive in our market.
“As with a lot of credit unions, we are trying to increase loan activity if it makes sense for the member.”
BECU makes appearances at a number of community events and trade shows, especially in the summertime, Berquist continued. He said 2012 has brought much more loan activity at these events than previous years.
“It is amazing how many loan applications we take at a fair,” he said.
Given the influx of new members, and with many of these people having established relationships with a bank that has a teller model, Berquist said BECU has implemented a multimedia campaign spotlighting the CO-OP Network.
“This has had a noticeable difference on our perception,” he said. “In our tracking we are getting better scores and fewer complaints on convenience-related issues.”
Every six months BECU performs a brand tracking survey that includes questions on why people switched to the credit union. Berquist said the top three responses usually discuss fees or a lack of free checking at banks, but more recently it has seen “higher-level philosophical issues” such as wanting to deal with a local institution that has consumers’ best interests in mind.
‘Resonating With More People’
“Over the past four years the credit union model is resonating with more and more people, at least in our market,” he said. “There is a higher understanding of and appreciation for the cooperative model, which was not there before the financial crisis. Previously, people didn’t think much about the values of banks.”
BECU’s branches were busy prior to BTD, “and now they are very busy,” so management is closely examining staffing models, Berquist said. “We don’t want our employees to get burned out. We have relocated some of our smaller branches to larger spaces.”
BECU’s loan applications year-to-date through Sept. 30 are up 33%, although Berquist said loan balances have not grown as much due to continued deleveraging. Mortgage originations are up 18%, with the credit union focusing on growing the purchase side.
“Auto loans are starting to pick up as the auto industry is coming back,” he said. “We are not back to where we were in 2007 but there are some positive signs.
“We are in the ‘managing the growth phase’ right now,” Berquist continued. “The growth is wonderful but we want to make sure we don’t compromise the member experience. That is why we invested in ATMs and expanded the size of some branches. Sometimes it catches up with us because the growth happened so fast.