Credit unions have seen quite a bit of membership growth overthe last year–much of it due to the consumers' disdain over thepoor reputation commercial banks have earned lately. Credit unions,to their credit, have profited from this consumer windfall and arenow showing many of these new-found members how beneficial theyreally are by providing equal if not better service, equal if notbetter technology products and much better rates.

The one area most credit unions cannot compete, however, is thevast number of branch locations banks host nationwide, and that's abig issue with many new members used to big banks branches plantedvirtually on every corner. Without this Starbucks-like coverage,how can credit unions retain its latest wave of new members whostill demand traditional in-branch services?

Branches are here to stay for the time being, just not as manyof them. Yes, they are expensive to build, maintain and staff, butthere's a handy cooperative service that only credit unions have inthe financial services world that is one of the keys to retainingmembers who like visiting their branches. Shared branching providesa massive opportunity for credit unions to retain their members bycost effectively expanding their footprints without the added costof building, maintaining or staffing a brick and mortar locale.Using another credit union's branches, along with an entire branchnetwork of thousands of locations nationwide, is simply a smarterway to do business, which will ultimately help attract new membersbut also keep the ones they already have.

For example, the $87 million Midwest Carpenters &Millwrights Federal Credit Union based in Hobart, Ind., serves morethan 15,000 members residing in 15 states with just 13 employeesworking in its original location. Midwest Carpenters serves itsgrowing membership across multiple states via its shared branchnetwork, which provides the infrastructure needed to accommodateits growth without the costly expense of building and maintainingits own branches and adding scores of employees to its payroll.

Another example is the $746 million Purdue Federal Credit Union.Since incorporating shared branching into its service offering,Purdue FCU based in West Lafayette, Ind., successfully retainmembers who find it easy and convenient to manage their accountswith the credit union by using shared branches.  Based onthe continually increasing numbers of transactions the credit unionexperiences through this service channel, it clearly provides aneeded service for its members. 

In 2012, members of the credit union deposited more than $31million into their accounts at the credit union. Ordinarily, thisis a number that wouldn't raise eyebrows, but more than 2,300different branches from 789 credit unions across 49 states wereused to make these deposits along with other member transactionactivity. 

Not only does shared branching make sense to increase memberretention among its student members, but the credit union also feltit would benefit the entire industry as a means of competing withlarge financial institutions through its nationwide branchservices. The shared branching network has helped Purdue improveits member retention by 25% since 2007, as the credit unioncontinues to promote shared branching very heavily tostudent-members, aiming to retain them as future members when theyenter their prime earning years.

With these two examples, two of many by the way, branches remaina standard for member service with shared branching leveraging thatmainstay. This service, unique to the credit union industry, allowscredit unions to compete with the larger financial institutionsproviding comparable brick and mortar accessibility. As a result ofthis access, coupled with the tidal wave of online and mobilesolutions currently flooding the industry, members are moreinclined to stay with a credit union. 

But there's one caveat. Credit unions need to enhance theirmessaging about the benefits of this still largely unknown sharedbranching service to consumers. so there never is a second thoughtof switching to another financial institution for lack ofconvenient branch locations. The coverage is there. Credit unionssimply need to educate the influx of new members along with theestablished members to retain them for continued growth andsuccess. 

Dan Davis is executive vice president, chief financial officerat Credit Union Centers.
Contact 800-285-5300 or [email protected]