Change can be intimidating, but also a necessity for survival. That’s a lesson players in the credit union market are quickly learning as they face growing competition from larger commercial banks and FinTech firms.
In this competitive landscape, adjusting to changes in the market means keeping up with current and potential members’ interest in sought-after technological innovations.
Over time, this lesson has resonated strongly with the SAC Federal Credit Union (SAC FCU). First launched in 1946 to serve members of the Andrews Air Force Base — previously known as Andrews Field — in Maryland, SAC FCU had shifted its mission to focus on community membership by the early 1990s. Now based in Papillion, Nebraska, the CU has grown to represent 110,000 members and is on track to hold $1 billion in assets later this year.
SAC FCU has embraced change in recent years, investing in new financial services tools like remote deposit capture, and making digital payment tools like Apple Pay and Samsung Pay available through its debit cards. It also introduced interactive teller machines (ITMs) throughout its branches in the past year.
All this change is necessary to meet the rising expectations of an increasingly tech-savvy customer base, according to CEO and president Gail DeBoer. She recently spoke with PYMNTS about SAC FCU’s drive to stay on top of financial payment innovations, and how the addition of ITMs has impacted its day-to-day operations.
Opportunity for Upgrade
The decision to invest in ITMs was largely driven by the credit union’s need to upgrade its ATM network.
“Our ATMs had to be converted to be EMV-compliant, so we were looking at a pretty big investment,” DeBoer said. “It seemed like the perfect time, if we were going to do it, to do it then.”
The new machines allow users to interact with a CU professional through a video conference. They have been installed at SAC FCU’s drive-up teller locations, enabling drivers to interact with a live teller through the screen. Members can use the ITMs to perform the same services they could at a traditional drive-up teller window, including making payments on loans or withdrawing cash from their accounts.
While the services available at ITMs are the same, the interface system is notably different. Because the technology changes how members engage with the FI and its employees, DeBoer said SAC FCU was concerned that ITMs might scare off or alienate members.
“We were worried [about] how it would be adopted,” she said, adding that the CU deployed staff to assist members in learning to use the machines.
The devices have been positively received by members since their rollout, and SAC FCU’s metrics indicate that usage has increased over the past year. The key to that success was to be prepared to help members adjust to — and learn about — the new financial products and the changes they could bring.
“We are always aware of any new technology and how members may react to it,” DeBoer said.
More Efficient Operations
The ITM investment has been beneficial to SAC FCU’s members, and it also led the CU to rethink its staffing decisions.
Under the old drive-up service practices, a CU had two full-time employees (FTEs) staffed at each of its nine branch locations. With the virtual teller experience, DeBoer said the credit union can now have five employees serve all nine branches without physically having to be on-site at any of them.
“We were really able to reduce FTEs with this technology,” she said.
In addition to enabling greater workforce efficiency, DeBoer explained that the ITM investment offered another benefit for SAC FCU employees: heightened security. Drive-up windows opened earlier and closed later than the credit union branches, and were staffed by two people for security purposes. The virtual ITM technology eliminated that need, allowing a small group of staff to remotely serve members from the SAC FCU headquarters branch.
“We wanted our employees to feel safe,” DeBoer added.
Employees’ jobs are also safe with the ITM technology’s introduction. While new technology can put some human jobs at risk, the machines still rely on humans to engage with customers, creating new career opportunities for existing SAC FCU employees and even leading to new hires joining the credit union’s team.
The Millennial Influence
While SAC FCU got its start as a military-specific credit union, DeBoer noted the organization has since grown to cater to a wider customer base — and has more recently begun to focus its attention on millennials. Its efforts to attract this group have so far been successful, as the CU now has more than 34,000 millennial members, according to its data, accounting for approximately 37 percent of its membership.
Having a tech-savvy membership can be a double-edged sword, however. These members want SAC FCU, or any credit union, to offer similar tech innovations to those available at larger FIs.
“Our members expect the same technology they can get at Bank of America,” DeBoer explained.
To meet those expectations, the CU partners with third-party processors to stay on top of the latest innovations. These collaborations have enabled it to introduce solutions like Touch ID and Face ID on its mobile app, although the latter is limited to members with the Apple iPhone X.
Change might be overwhelming for some members, but DeBoer urges the credit union market to consider the risk of non-investment. After all, a lack of technology could result in the alienation of more tech-savvy customers.
“We embrace technology, and I think our members have, too,” she said. “You can’t be afraid of it. You have to look at it as an opportunity.”
In other words, change might be intimidating today, but it can pay dividends to stay on top of it.
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