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Page history last edited by PBworks 16 years, 8 months ago

Credit unions and banks have to figure out what their users, and potential users, really need.

Boeing Employees Credit Union (BECU) services its enormous membership through two branches (Tukwila & Everett) and a network of 38 supermarket mini-branches. Those mini-branches are cashless, tellerless locations staffed by employees who can open new accounts, apply for loans, print out statements, and conduct a lot of different transaction types.  Those employees cannot cash a check, buy a roll of quarters, or get exact change for a member. Cash is limited to an ATM.

BECU thinks this relatively low-cost model allows it to give its members the best pricing.

Many other banks and CUs operating in supermarkets do have teller services. Examples mentioned were AlaskaUSA, Wells Fargo.

Having a credit union/bank in a grocery store seems to be a natural combination, because both activities are regarded as "chores" by many folks.

In the example of BECU with its limited-service minibranches, how many potential members decide not to join due to perceived lack of teller services at mini-branches?

On the other hand, how many prospective BECU members DO decide to join and jump in to using BECU because the local point-of-presence makes BECU much more appealing than ING Direct and its branchless peers.

ING Direct has a handful of "cafe" locations in Canada and the US, much like BECU's minibranches: no teller/cashier services, but employees who can walk prospective clients through the account-opening or loan application process, ATMs, and product information. ING's cafes do feature an espresso bar.



Canada's President's Choice Financial was fairly successful operating "cashless, tellerless" mini-branches in Loblaws supermarkets in Canada. Even though word-of-mouth reputation for PC Financial's client service has been middling (anecdotally, poor telephone customer service support), it's been fairly successful because it offers relatively low fees and the convenience of being very well integrated into the grocery store. 


However, when PC Financial's parent company (CIBC/Amicus) tried to export the President's Choice Financial approach to the US, it failed dismally. The CIBC/Amicus supermarket banks were operated as Safeway Select Bank and Marketplace Bank. CIBC/Amicus failed to grasp subtle differences in US consumers' preferences, causing the banks to flounder even though they offered high deposit rates, low loan rates and very low transaction fees. CIBC/Amicus ailed to anticipate lukewarm cooperation with its sponsoring supermarkets, Winn-Dixie and Safeway: those supermarket chains had already leased out space in many of their stores to existing banks, creating legal conflicts of interest.  Winn-Dixie and Safeway could not effectively market their CIBC/Amicus supermarket banks within the sponsoring supermarket's print and media marketing, due to the contractual rights of their existing lessee banks already operating in their stores.  Those banks never generated much "buzz" or word of mouth except on Internet message boards. By contrast, BECU's mini-branches (which in many cases are in the same Safeway locations where the now-defunct Safeway Select Bank operated) appear to have been financially successful for the CU.


Even with the high technology orientation of Gen Y, there seems to still be a real desire for a local point of presence.


Credit union shared branching gives enormous power to CUs in continuing to serve their members even when they relocate or are traveling.


Big problem: when a lot of CUs raced to having multiple SEGs, and into community charters, did they think through the increased cost of operating branches to serve a "community"?

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