BEAVERTON, Ore.-Rivermark Community Credit Union says it has no intention of going branchless, but it has closed or is scheduled to shutter three branches in 2012 as it ramps up its electronic banking efforts.

RCCU, a $556-million credit union that serves 63,000 members, closed its Salem, Ore., branch June 29, and recently announced its locations in Clackamas and Newberg will cease operations on Nov. 9.

David Noble, marketing leader for Rivermark, told Credit Union Journal the closures were a simple case of numbers. He said 63% of members visited the Clackamas branch less than once per month, while 60% of members visited the Newberg location less than once per month.

In the past year, he continued, the number of members using Rivermark's mobile banking service has increased 86%, online banking use is up 34%, and members who open and fund a new savings or checking account online has increased 57%. At the same time, the number of in-branch transactions has declined steadily.

"The Northwest has more online banking usage than other places," he said. "When you have that many members not coming in to the Clackamas and Newberg branches, it made us question keeping them open."


To Branch or Not To Branch?

Rivermark's strategy makes it a poster child for the ongoing debate over physical branches vs. electronic transactions.

Some experts insist a brick-and-mortar presence is increasingly unnecessary as consumers embrace technology, while others say most people need to see a branch near their home or work before they will consider joining a credit union. One participant in a recent branching panel at the Directors' Convention (CU Journal, Sept. 3) said members of Generation Y like to open their accounts in person, but once that is accomplished "they never set foot in a branch again."

Rivermark's Noble said management is well aware that some folks still like to see a building with a logo.

"We weigh that into our decision, but this is proactively executing our business plan," he explained. "We want any delivery channel to be the highest performing, and it does not make sense to keep a delivery channel that is not serving the members. We still think branches are viable, and we have looked at all branches to make sure they are higher performing-that is how we make decisions."

After the closures Rivermark will have six physical branches. Noble pointed out its members also have the option of shared branching access through CU Service Centers and CO-OP Network. The credit union reported $1.6 million in net income at midyear.


The 'Game Changer'

Noble said Rivermark was the first Oregon CU to implement mobile deposit in March. Many industry analysts describe mobile deposit as a "game-changer" because members no longer have to bring physical checks to a branch. In six months, nearly 10,000 Rivermark members have deposited more than 31,000 paper checks using their iPhone or Android mobile device totaling $12 million.

Online funding also has changed the account opening procedure, he added.

"Members now can open and fund new accounts online very easily, which lessens the need to have as many branches. We don't want to be a branchless credit union, but with online and mobile, members are just are not coming in to branches as often."

Rivermark's E-Signature service allows members to sign loan documents from anywhere with Internet access, including via smart phones. In July tech trend website NerdWallet spotlighted E-Signature as a top pick for credit union high tech.

"We are being proactive and responsible in how we allocate resources by investing in the services and technology our members prefer and use the most," Noble declared.

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