The First Alliance Credit Union ($271.2M, Rochester, MN) branch on Commerce Drive in Rochester, WI, is flooded with the smells, sights, and sounds of a popular business community hub. First Alliance owns the building and leases adjacent space to a local bakery, a coffee shop, and a title company. But what’s even more remarkable than the convivial atmosphere is the innovative technology at work inside the branch lobby.
There are no tellers or teller counters; instead, a team of three branch advisors coaches members on how to use several stand-alone interactive teller machines (ITMs) that boast advanced functionality. The new branch’s design reflects First Alliance’s strategic commitment since 2016 to deliver exceptional member service, reduce operating costs, and provide members with a memorable and empowering, if not delightful, experience — all through technology.
Prospering Despite Limitations
First Alliance collaborated with its core system and primary technology provider to develop a roadmap for transforming its branch operations by leveraging emerging new technologies. The central idea was to serve as a proving ground, or a beta tester, for its partner’s new products.
“For a credit union of our size, we couldn’t justify the cost of a software development team,” says David Schouten, senior vice president and chief information officer at First Alliance. “Few credit unions in our peer group can afford to have more than one technology staff member and that person usually helps manage day-to-day issues.”
That strategy enabled First Alliance to act nimbly and move products to market much faster, and with development taken care of, the credit union turned its attention to the member-facing side of its business, focusing on technology innovations, convenience, and service.
In 2016, First Alliance piloted a wireless, instant issue card printer wherein members enter data on a tablet device and a new debit card quick prints to a card printer.
“It helped us deliver instant issue much faster and had the added value of helping our partner beta test one of its new products,” Schouten says.
First Alliance then focused on its lending business. The cooperative especially wanted to help members with damaged or no credit — those overlooked by many other institutions. According to Schouten, loans to these members can be immensely helpful in turning their lives around. So, the credit union automated where it could and redirected resources to more difficult decisioning cases.
“Human resources are precious, and it’s important to deploy them in the most productive manner,” Schouten says. “We saw an opportunity to apply automation to loans that were much less labor-intensive — what some would consider no-brainers. Other more problematic loans required an experienced loan officer.”
The approach worked. In 2018, First Alliance reported 18% loan growth.
“It seemed like the house was on fire,” Schouten says. “We couldn’t keep pace like we wanted.”
Solving Teller Turnover And Replacing The Mundane With The Magnificent
Further compounding the credit union’s productivity challenges was a high turnover rate among its branch tellers. So, First Alliance introduced ITMs that support approximately 95% of all transactions and allow members toaccess all of their First Alliance accounts, not just checking and savings, regardless of the platform on which they reside.
“Our core system processor already had solved a large part of the multi-platform integration challenge,” Schouten says.
But First Alliance wanted more; it wanted to both astonish and delight visitors to its branches. After a lot of research and a year-long implementation period, the credit union rolled out palm vein scanning biometrics with its ITMs.
Members walk up to the ITM and hold up their left or right palm to the touch-free scanning screen. The ITM authenticates the member and automatically displays their accounts. No card, PIN, member number, or other data entry is required. Members don’t even need their wallets.
To retain a superior experience, the credit union has a small team of on-site advisors that greet members, ask them what they want to do, and acquaint them with the ITMs.
“We went into this with eyes wide open,” Schouten says. “We felt we would fail if visitors didn’t see a person when they entered the branch. We took to heart the concept of high touch with high tech.”
First Alliance introduced the palm scanning technology in 2020 at its newest branch on Commerce Drive in Rochester, just as COVID-19 was shutting down retail locations and forcing financial institutions to close their doors or offer appointment-only services.
First Alliance retrofitted one branch during the height of the pandemic. That location opened in July 2020 and remained open thanks to the self-service ITMs that allowed the credit union to provide a safe and personal experience. The branch’s ITMs offer a “Help Me” button that enables members to connect via video with a live associate, located in the contact center, who helps the member through the transaction.
CU QUICK FACTS
First Alliance Credit Union
Data as of 03.31.22
HQ: Rochester, MN
12-MO SHARE GROWTH: 7.4%
12-MO LOAN GROWTH: 11.5%
From Lemons To Lemonade
The retrofitted branch was a success. Unfortunately, First Alliance was forced to close the branches that it had not yet converted to the new ITM technology. The credit union’s initial plan was to convert four branches incrementally during the next four years. Instead, it converted them all in 12 months.
During the pandemic, members began to better understand how to use their smartphones and laptops to access the credit union. Usage skyrocketed as members realized they didn’t need to visit a branch to confirm a payroll deposit or check a balance.
According to Schouten, members’ growing confidence in self-service channels was evident in the level of traffic that migrated to mobile channels. Many members even said using the kiosks and coin counter machines was fun. As an added bonus, members can insert the printout from the coin counter into the ITM to deposit monies into a selected account.
The Branch Of The Future Today
When members use a First Alliance ITM, they can use a card or PIN to authenticate their identity and gain access to the accounts associated with their payment card. If they use the palm scanning biometrics feature to authenticate their identity, they can access all of their credit union accounts
When it comes to face-to-face interactions, members have a couple of options.
The “Help Me” button starts a live interactive video session with a contact center representative. This was the feature that worried Schouten the most.
“We were concerned members would lean heavily on the video assist agent and whatever operational cost savings we saw from less branch staff would be offset by having to maintain an army of video assistants in our contact center,” Schouten says.
The credit union aimed for a kiosk transaction ratio of 75% self-service and 25% video assist. It was pleased to note an 80% adoption of the self-service branch model.
For the low percentage of transactions that are beyond the scope of the kiosks’ functionality, the credit union staff present in the branches are trained loan officers who can also assist members.
“We view our branches as a physical symbol of our presence in the communities they serve,” Schouten says. “They’re like billboards. Members tell us they joined First Alliance because we had a branch close to their neighborhood. But they’ll also tell us they never visit it unless they need to.”
The branch on Commerce Drive attracts new members who visit the shared location for the bakery and the coffee shop. Setting up branches with coffee shops and other high consumer demand businesses are in First Alliance’s plans for expansion and growth.