The last several years, marred by economic downturn and recession, have not been easy for the financial sector. And, while credit unions have done considerably well compared to banks, they too have had their share of tough times including cut backs, layoffs, and even branch closures. They are currently tackling the need to cut costs due to more rigid loan margins as well as competition in the marketplace. However, out of all types of despair can come some good in the way that credit union branch closures have created a need and thus paved the way for new and improved mobile banking services.
While remote banking does not take the place of brick and mortar, it certainly serves as an additional valuable tool to help credit unions best serve their members during times of difficulty and/or transition. Mobile banking coupled with Shared Branching has helped many credit unions weather some of the worst days of this economic storm guided by a focus on a “Member First” philosophy and the hope for brighter days ahead.
Rivermark Community Credit Union (Beaverton, OR) recently closed its Salem branch and has plans to close its two locations in Clackamas and Newberg this fall. While economic challenges and pressures facing financial institutions often contribute to these types of decisions, Rivermark is also focused on their vision to be a technology-savvy credit union.
Likewise, Altura Credit Union (Riverside, CA) has made some changes to their branch network. In January 2011, two branches in Hemet were merged, and in May 2011, the Riverside County credit union closed a branch inside a Wal-Mart Super Center and converted three other branch locations to all-electronic branches (basically ATM service). Since then, one of the electronic branch locations was sold and the ATM removed at a second one. The third location, in Murrieta, was re-staffed in April of this year, and returned to full service.
According to Altura’s spokesperson, Carol Kramer, these decisions were not made lightly, and were done so as a direct result of the “Great Recession” that began in late 2007 and early 2008. “The Inland Empire area of Southern California, where Altura is based, was hit particularly hard in the downturn,” explains Kramer. Unemployment and home foreclosure rates were among the highest in the country during that period. Unemployment topped 15%, and still remains above 12% - much higher than the national average and the average for California at 10.7%. Local foreclosure rates have come down, but are still the fifth highest in the state. “Obviously, this directly impacted our members and our bottom line - Altura repeatedly had to reduce its costs of operation,” says Kramer. Those measures, some severe, were necessary as loan losses mounted, while revenues, primarily from Member loan activity, ground to a halt. During an economic crisis, understandably people were simply averse to borrowing money.
Kramer says that Altura’s moves in 2011 to convert and close branches was a continuation of cost-cutting measures begun in 2008, and that, fortunately, those steps have paid off. “From second quarter 2011 forward, Altura returned to profitability - a loss of $5.8 million in 2010 was reversed and replaced with a gain of $8.4 million in 2011,” she reports. The benefits have continued into 2012 as well with Altura’s net worth ratio increasing from 5.70% in 2011, to 8.69% as of June 30 this year.
Credit unions are known for their exceptional member service and the personal attention they provide. During transitional periods, financial co-ops work even harder to maintain this redeeming quality although it can be a challenge in truly tough times.
For Altura, their members living in the southern part of Riverside County, a very large county in Southern California, were most impacted by the conversions of branches to all electronic. “Two of the three converted branches were located in that area which meant a 20-30 minute drive for members to reach an Altura branch,” explains Kramer. However, since Altura is part of the shared branching network, their members could conduct financial transactions in a shared branch of another credit union. Plus, these were the newest branches in Altura’s line-up which did not have a chance to fully realize their potential and seemed like the most logical choice for cut-backs in terms of minimizing member impact.
With a focus on online services and digital product development, Rivermark has been encouraging members to make more mobile and online transaction in addition to promoting Shared Branching wherein members can use other credit union branches and ATMs.
While Rivermark does not plan to become a branchless credit union, its members have become accustomed to its mobile access channels including mobile banking, remote deposit checking, and online loan applications with e-signatures. The credit union is also part of the Co-Op Network's nearly 30,000 surcharge-free ATMs.
In the same vein, Altura offers an impressive suite of Mobile Banking products and services. Although never perceived as a replacement for branches, but instead as another tool for members, similar to online banking, their members had been requesting it so it seemed like the next logical step.
Kramer reports that nearly 13,000 members (out of the credit union’s 95,000 members) have signed up for Mobile Banking. The new App is getting higher ratings than the original version, and feedback from members has been positive. “With the latest version, members have told us they like the new look and upgraded features -- they are particularly excited about the check image deposit feature coming later this year,” contends Kramer.
If you want to be part of a forward-thinking financial institution dedicated to bringing you quality financial solutions with superior member service, through good times and bad, then look to a credit union. Not a member? Find a credit union and join today!By Cyndi Cohen