Doubling One Credit Union's Footprint
Believing that members measure convenience with points of access, Texans Credit Union launches an aggressive branching strategy.
Texans Credit Union, headquartered in Richardson, Texas, is nearly $2 billion in assets and currently has 156,000 members. Started in the 1950s as a credit union for Texas Instruments, Texans converted to a community charter in the 1990s owing to a restructuring of the computer industry. The credit union is primarily concentrated in Dallas, where it has 30 branches. Fourteen of the branches are in SEGs, including Texas Instruments, Raytheon, Nokia, Nortel and Ericsson. Texans also has 81 ATMs; 17 are image-enabled and 13 are in SEGs that include Fossil, Computer Associates, Sanden, TruQuint, Vinson & Elkins, and Solectron.
Aggressive Branching Growth
Texans is in the midst of an ambitious five-year new branch strategy that began in 2005. The planned expansion is for 25 new branches and a comparable percentage of ATMs. When complete, the new branches and ATMs will nearly double the credit unionâ€™s presence and will be largely in the Dallas region.
To date the credit union has added six new branches and eight new ATMs. Over the next nine months it will add five new branches and at least five more ATMs.
The aggressive branching strategy stems from the credit unionâ€™s belief that points of presence and branching is still the principal convenience for members. Although banks in the Dallas region have over-built and saturated the market, Texans believes credit unions are so far behind that members could and would welcome more credit union branches.
Bigger Broadband, Smaller Footprint
Changes in technology allow more information to flow over less bandwidth, allowing Texans to place more technology in the new and proposed branches. As a result, the branches are able to do as much as or more than older branches but with a smaller footprint.
New branches are 3,400 square feet or less. For strip mall branches, the credit union requires an end cap location with high visibility and ample room for three or four drive-through lanes. In addition to strip mall locations, Texans continues to look at pad sites for stand-a-lone locations.
Texans anticipates a significant part of its growth will come from the commercial side, especially on the deposit side of member small business services. Commercial deposit growth is viewed as an essential complement to a very successful commercial lending program that has originated over $1 billion of commercial loans in the last three years.
Recently Texans evaluated its technology and concluded it didn't have the "right" technology to offer its commercial members. Consequently, it began an aggressive project to replace all of its electronic delivery channels, including its core system. The work was scheduled for completion by September 1.
Believing that the small business people whom the credit union is attempting to engage define convenience in miles or minutes five of either being about the right number the new branches are located on a hub-and-spoke model. Rather than attempting to forecast population growth, the credit union takes a wait-and-see approach and then locates branches in areas where significant growth is occurring.
New Branches, New Technology
To assure the expansion plans do not strain the back office, Texans has installed a VIOP (Voice Over IP) network. The additional bandwidth and speed enabled by this network has allowed the credit union to push more data and marketing content to all locations.
An industry-wide problem has been high turnover of branch staff. But Texans combats this with Windows-based GUI interfaces, which make for more efficient training than legacy "green screen" systems. In addition, the technology allows employees to deliver a higher level of member service.
Additional technology investments include a new general ledger, ALM, and product profitability system. The profitability system allows Texans to measure the profitability of their products and all of their delivery channels. These data are distributed in monthly reports to all appropriate personnel.
Texan's branching strategy combined with technology enhancements should position it for robust and sustained growth.