FINANCE

Credit Unions Blend New Tech, Old-Fashioned Service

Financial institutions of the future, serving Alaskans now

By Alexandra Kay

Since the advent of online banking, the future of brick-and-mortar financial institutions has been called into question. According to conventional wisdom, because of new technologies, traditional banks and credit unions could go the way of the dodo and the dinosaur.

And it is true that many consumers have indicated they no longer use traditional tellers for their many financial needs. For example, the number of customers who work with a teller decreased 15 percent between 2007 and 2017, according to Asterisk Intelligence’s “Teller Analytics” report. According to Chase’s recent “2020 Digital Banking Attitudes Study,” about 80 percent of respondents use a smartphone or a computer to complete banking activities, and 85 percent say they save time by managing their finances digitally. It seems as if these changes are here to stay.

While many financial institutions were already adapting to this new financial world, the COVID-19 pandemic has certainly hastened them along. In order to remain viable in a swiftly changing landscape and to continue to best meet their members’ needs, financial institutions are making some big changes.

Engaging Members in Different Ways

However, “brick and mortar branches are just as important today as they were decades ago,” says Alaska USA Federal Credit Union Senior Vice President for Corporate Relations Dan McCue. “Members find comfort in having access to employees and they tend to build a rapport and a lasting relationship with them, allowing for a greater level of overall member service.”

And the stats seem to prove it. According to Novantas, a leading provider of fintech data and decisionmaking support systems, accounts opened at a branch have an 80 percent customer retention rate as opposed to a 50 percent retention rate for those opened online. But transactions that in the past could only be completed with tellers in person—things like deposits, withdrawals, and loan payments—are now things customers are comfortable doing online, so

“We really feel like we’re partnering with our members versus the old way where you walk in and people start to throw products at you.”

Chris Brahney, SVP, Nuvision while they might open an account in person, odds are they won’t deposit checks that way.

Alaska USA Federal Credit Union, Nuvision Credit Union, and Credit Union 1 have all provided varied avenues for their customers to pursue financial transactions and activities for decades, many of which have been outside of traditional teller lines, and all three institutions understand that they must meet members in ways that are most suitable to them.

Redesigned Branches

“Our new member-centric branch design provides members with a greater level of comfort, privacy, and an enhanced overall branch experience,” says McCue. At Alaska USA’s new North Pole branch, there will still be teller pods, but bank employees will also be able to assist members at various locations throughout the branch by using wireless laptops. “This allows members a greater level of comfort as they gain access to their accounts at the tech bar, a couch, a privacy office, or at a teller pod,” he says. With the branch’s “concierge approach,” employees can determine needs and direct members to an employee who will complete their transaction.

At Nuvision Alaska Credit Union’s soon-to-be stand-alone retail store in Wasilla, there will be some automated teller machines (more about those ATM changes later), but the rest of the branch is designed around conversation areas. One such is a welcoming, comfortable area where members can sit and wait for availability or have high-level conversations about financial services. Alternatively, conversation rooms allow for more private financial discussions, like loan applications that require members to share personal information. Instead of being separated from a branch worker by a desk between them, members and branch personnel will sit sideby-side, sharing screens, identifying issues or problems, and collaborating on solutions. “It really does change the dynamic where we really feel like we’re partnering with our members versus the old way where you walk in and people start to throw products at you,” says Nuvision Senior Vice

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President Chris Brahney. In fact, he says with the credit union’s flipped design, time spent on the technical aspect of the conversation will be minimized from what it was in the past.

At Credit Union 1’s Financial Center South, “We took the old model and flipped it to the more personal model,” says President and CEO James Wileman. At the newly refurbished location in South Anchorage, members are personally greeted and have the option to chat with an expert in a chair, nook, or private advisory suite. “With every interaction, we’re aiming for members to feel as personally engaged as they wish to be,” says Wileman.

“When members have bigger financial decisions to make— preparing for retirement, financing a home, education, or car—they want to meet with a person face to face,” adds Nuvision’s Brahney. “So that’s where we’re seeing not the death of bank branches but a transition for what their focus is in our members’ lives.”

While the pandemic sped up the transition to and reliance on technology, it doesn’t look like things will go back to they way they were when it’s over. According to the Chase “2020 Digital Banking Attitudes Study,” about three-quarters of financial institution customers say they will continue to use or begin using digital payment options even after the COVID-19 pandemic subsides, and 85 percent feel they save time by managing their finances digitally. All three credit unions are leveraging advanced technology to meet the needs and desires of their members.

“Members don’t have to wait for tellers to assist them,” says Wileman. “They can approach a virtual teller machine and do typical functions—or tap the screen and talk to a live Credit Union 1 employee. These live reps will be able to help people over the virtual teller machine.”

At Nuvision’s stand-alone location in Wasilla, the credit union is using interactive teller machines as well. “It’s an ATM on steroids,” says Brahney. “It allows a customer to do any type of transactional activity that they would normally do with a teller in a branch… They still have the option of dealing with a human being through a video transaction.” This allows the credit union to increase availability of hours and reach. So, for example, if a member is completing a transaction through one of the new teller machines and has a question about how to do something, they can simply tap the screen for help and get a live teller who can walk them through a transaction.

Another technology Nuvision has adopted is what Brahney calls “omnichannel”: a seamless financial experience no matter where the customer chooses to bank. Brahney gives the example of a member beginning a car loan application in a branch, leaving before the process is complete due to the need for more information, and picking it back up later seamlessly—without the need to start over again—and finishing the application whether in person, online, or over the phone. “We’re using

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Renderings of the Nuvision branch under construction in Wasilla.

Nuvision technology to give the consumer choice of where they want to do their banking and to make whatever they’re doing seamless,” says Brahney.

Alaska USA’s McCue adds that the use of new, convenient digital technologies will provide greater value to members and help enhance the member experience.

New Locations

All three credit unions also mention location as key in their bid to give consumers what they want. In a recent report on its new North Pole branch, Shannon Conley, executive director of retail financial services for Alaska USA, said, “Relocating the North Pole branch to the mall and updating its look will assist in our efforts to cast our branches as places where people can go to receive financial education, advice, and complete their transactions.”

“As people shift from place to place, so do we,” says Nuvision’s Brahney. “We had a branch at the Northway Mall that we were forced to close because the mall was closing, and a lot of people would take that as the perception that we were moving away from the retail focus, but that’s not accurate. Instead, we built a standalone location because we had outgrown the mall space, but we tried to involve the community of Wasilla in the process, and this is something we can all be proud of.”

Credit Union 1 already had a branch located near the Dimond Center mall, but Wileman says the upgrade to a financial center is based on market research. Surveys found members would be comfortable with the newer technology but that there would also be the opportunity to connect with tech-hesitant members and help them accomplish their needs: “Prior to building it, we conducted a market study and learned that the community was a perfect spot to try something bold and leading edge, and we think ultimately it will be in tune with members needs in the branch. We’ll take what we learn there and use it going forward.”

All three institutions are taking what they’ve learned about their consumers and a changing landscape and using it to build the branches of the future—today.