How PenFed Improved Its Branch Experience

One-hour wait times at a branch in Puerto Rico inspired the Virginia credit union to open a second branch in a San Juan suburb.

Credit unions make financial services accessible and affordable for millions of members. That mission remains constant from credit union to credit union, from coast to coast, and even from country to country.

In late December, Pentagon Federal Credit Union ($19.5B, Alexandria, VA) opened its second Puerto Rico-based branch. The first, acquired through a merger with the former Fort Buchanan Federal Credit Union in 2008, is located on the military instillation and requires base access.

I’s been difficult for our members, and for the military instillation to have us, says Kevyn Myers, the credit union’s executive vice president and chief operating officer.

Eliminating Friction


Pentagon Federal credit union
Data as of 12.31.15

  • HQ: Alexandria, VA
  • ASSETS: $19.4B
  • MEMBERS: 1,374,181
  • BRANCHES: 31
  • 12-MO SHARE GROWTH: 9.87%
  • 12-MO LOAN GROWTH: 7.12%
  • ROA: 0.86%

In 2008, PenFed counted some 30,000 members in Puerto Rico. By 2015, that had skyrocketed to 140,000. And although members can bank online or by phone, Myers says the branch is by far the most popular way for members on the island to conduct their banking relationship.

Unfortunately, this one branch caused some significant friction, as it could take members up to an hour to gain access to the base branch and conduct their business with the credit union.

We have competitive rates and great products, Myers says. We had members waiting to do business with us.

PenFed had considered opening a new branch on the island for some time, but it wasn’t until five months ago that Myers and others flew south over the Atlantic to scout the right location.

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Staying Near San Juan

The San Juan metropolitan area is the most populated city in the Commonwealth of Puerto Rico; it’s also among the 50 largest cities under the jurisdiction of the United States. The city is an important seaport and the island’s manufacturing and financial center. It’s also the location of Fort Buchanan.

To meet the greatest member need, PenFed knew it needed a second location that remained near San Juan. It chose San Patricio Plaza, a 640,000-square-foot, three-level enclosed shopping mall within the San Juan metropolitan area. The credit union’s newest branch is just three kilometers away a 15-minute drive on a good day still close to the military instillation and yet accessible to all members regardless of military status.

We looked at where our current members live in Puerto Rico and where most of them do business, and then we tried to find a compromise between the two, Myers says. I think we did a pretty good job.

We looked at where our current members live in Puerto Rico and where most of them do business, and then we tried to find a compromise.

Indeed. Not counting its always-busy Washington, DC, branches, the San Patricio branch is the largest volume branch in the credit union’s 31-location network, according to York. And despite the fact PenFed coaches branch representatives to focus less on transactions and more on conversations, York says the credit union still completes an average of 100 member transactions a day.

There would be more if there was more time in the day, says Deb York, the credit union’s senior manager of branch operations says.

We do a booming business there, Myers agrees.

A New Branch Design

PenFed opened its San Patricio Plaza branch nearly two months ago. A few months prior to that, it rolled out a fresh branch design with a new location in Niceville, FL, close to Pensacola and several military instillations. This is the design PenFed used for its San Patricio and newest Guam branch.


An exterior shot of the new branch through the local fauna.



Two panorama shots of the new branch which together create a 360 degree view. Click to enlarge.

According to Myers, PenFed hadn’t done much in some time with its branch design. Thus, it conducted nearly a full year of research to decide on a direction. It took inspiration from other financial services providers and retail locations of Apple and Starbucks as well as elicited feedback from members before introducing its new open-concept branch.

The design makes way for new technology such as cash recyclers and private pods, which have helped cut transaction times in half and eliminate out-of-balance conditions and other cash errors, York says. Branch managers and officers work in clear offices, giving them an unobstructed view of the entire branch.

If they see members come in and no representatives are available to greet them, they can greet the member themselves, York says. They can keep traffic flowing evenly and make sure every member is helped in a timely manner.

The easy flow of the new branches is a key aspect of their design. PenFed wants members and employees engaging with one another, building relationships. And so far, so good.

The credit union was initially concerned with its members’ response to unfamiliar concepts and the open floor plan. Its concerns proved unfounded. The spacing between pods is enough to offer a bit of privacy, and members are good about keeping an appropriate volume in conversations.

Just as important, members can get in and out more quickly. No more hour-long waits.

It’s now easier for them to do business with us, Myers adds. Members are thrilled with it.

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December 21, 2016

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