Playing The Long Game

Northern Credit Union’s technological capability is well beyond its asset size. Learn why the rural New York cooperative has been at the forefront of the self-service revolution.


Northern Credit Union
Data as of 12.31.19

HQ: Watertown, NY
ASSETS: $282.7M
MEMBERS: 31,709
ROA: 0.60%

Between 2006 and 2007, Northern Credit Union ($282.7M, Watertown, NY) replaced its traditional teller line with a pod-based concept that allows members and employeesto stand side-by-side while conducting transactions. Members quickly took to this dialog banking approach and offered positive feedback on the evolution of the credit union’s relationship centers.

That’s why the credit union was confident members would readily use a personal teller machine when the cooperative placed one in the lobby of its corporate office three years later.

That’s not what happened, says Christine Booth, Northern’s vice president of member relationships.

CEO Dan St. Hilaire uses stronger language, calling it a bust. Still, Northern was not about to let one misstep change its progressive, long-term view on technology adoption and self-service capability.

We’ve had the same vision since 2002, the CEO says. We’re driven to find ways to make life more convenient for our members through self-service.

Waking Up To Technology

Northern is headquartered in Watertown, NY, and serves an eight-county membership mainly within New York’s North Country.

It’s a rural membership, says Nathan Hunter, Northern’s CFO. Members are used to personal interaction.

When St. Hilaire joined Northern in 2002, the area’s regional banks and credit unions, by and large, offered the same legacy service and products that they had for generations. And therein lied an opportunity for Northern.

They were all sleeping on technology, St. Hilaire says. The CEO saw that as a clear opportunity to differentiate.

The credit union started implementing advanced technology that offered better, broader self-service capability through its digital channels, making the credit union easier and more accessible to all members but most especially to millennials. At the time,the oldest millennial was 21, and there was little motivation among industry players to undertake an expensive operational upgrade for a generation that was still financially immature and years away from profitability.

Others were happy to keep banking the way it had been done forever, St. Hilaire says. They were being shortsighted.

Today, the millennial generation represents some 82 million individuals in America, making it the largest financially mature generation. However, it’s not the largest generation overall. That would be its successor, Gen Z, which includes more than86 million members in America. And both generations share a predilection for technology.

We are the only financial institution in our area that has what we have.

Christine Booth, VP Of Member Relationships, Northern Credit Union

Northern has quietly been building its technological capability for years, which has required a hefty investment from the cooperative. Since 2002, Northern’s operating expense ratio has grown 2.15 percentage points. By comparison, that ratio hasincreased 22 basis points for credit unions in the $250 million to $500 million asset band. That investment in technology, though, now allows Northern to go head-to-head against any sized institution in terms of talent, experience, and execution,St. Hilaire says. And, it has set the credit union apart in the North Country.

We are the only financial institution in our area that has what we have, says Booth, the member relationships executive.


Technology is a short-term investment with long-term benefits, though it may take years to recognize those advantages. Still, Northern advocates for others to stay the course. We’re not afraid to invest now to benefit later, saysChristine Booth, vice president of member relationships. And, we’re not afraid of change.

People And Processes

Northern’s technology strategy started successfully with the introduction of in-branch pods. Then, it stumbled with the deployment of PTMs. But the credit union has learned from its experiences.

For example, months before it rolls out new technology, the credit union now distributes videos and surveys to assess possible reaction and feedback. That information has helped Northern respond faster to member usage before and after deployment. It alsohas generally improved member engagement. Additionally, Northern has doubled down on cultural training and developed hiring practices that ensure front-line service representatives are comfortable with the technology and willing to help members useit.

In Croghan, NY, representatives from Northern Credit Union paint the town orange while walking in the town’s Spring break parade.

That’s important because technology has proliferated across Northern’s nine-location footprint. Each relationship center contains at least one smart office, which the credit union introduced four years ago. Smart offices privately connecta member with a centralized representative who can do everything from open an account to originate a loan over a Cisco video connection. Universal representatives in the branch focus on the initial member conversation, and once it’s clear themember needs assistance beyond making a deposit or withdrawal, they pass the member to a video associate for further assistance.

Branches also include tech bars a centralized desk with iPads cash recyclers, coin machines, and, yes, even PTMs. Today, the credit union operates 17 PTMs,

seven located in lobbies and 10 placed at drive-thrus. The drive-thru PTMs have allowed Northern to introduce weekend hours without increasing staff. And, members have generally become more accepting of self-service and video banking, thanks to widespreadsmartphone adoption. In December 2019, Northern members conducted 19,000 transactions on PTMs.

Members are using the technology, St. Hilaire says. They’re not intimidated.

Northern team members celebrate summer on the St. Lawrence River at one of the credit union’s annual boat cruise team member appreciation events.


For Northern’s pod-based relationship centers to be effective, front-line staffers must be willing to pass off members, via smart office, to a team of centralized lenders. That kind of trust requires employees to buy into the credit union’sservice culture. We have a selfless team in place who work to give our members the best possible experience, CEO St. Hilaire says.

Couch-Based Mortgages

For Northern, building a best-in-class technological experience to attract a millennial membership has paid dividends. The credit union has grown its share of millennial members from 10% a decade ago to 35% today. But in the coming months and years, itwill leverage its technology for another purpose: creating economies of scale.

The credit union converted from a federal charter to a state one in October 2018 and added five counties to its field of membership. Three of the five counties are in the North Country, which the credit union can serve by building branches closer to ruralcommunities. The remaining two, Onondaga and Oswego, are in Central New York and present a different market with different costs to operate.

Brick-and-mortar in Onondaga can be expensive, St. Hilaire says.


In recent years, Northern has fielded more than a few calls from state and national credit unions asking to visit or seeking advice on its technology and integrations. The North Country cooperative is happy to oblige. We make ourselves available,CEO St. Hilaire says.

Northern’s technical capability, however, enables the credit union to explore concepts that will allow it to serve more expensive communities, with or without a physical presence.

Key to that will be how well the credit union meets service delivery expectations, especially through PTMs. Abandonment spikes in those channels when members are not served within 10 seconds, but Northern’s expectations are more demanding than that.Representatives work to make video connection within three seconds meaning service and not Hi, I’ll be right with you.

The credit union also has technology plans that are grander than simply extending its network of PTMs, which it plans to expand by 10 across 2020. Northern wants to leverage video to serve members who don’t want to leave their couch, not just theones who enter a relationship center or drive-thru.

You can order groceries on your phone today, CFO Hunter says. Why can’t we say the same for a mortgage?

The credit union has partnered with a third-party company to turn that dream into a reality, although Northern is still working on an implementation plan.

CFO Nathan Hunter and CEO Dan St. Hilaire serve pancakes at A Pay It Forward event at the International Maple Museum Centre in Croghan, NY.

Someday soon, however, a Northern member might be able to complete a mortgage application from the comfort of their home. When that happens, it will be thanks to a two-decade vision for how technology can improve the member experience, but it won’tbe the last word in technology at Northern.

Technology is where the world is moving, whether we’re talking groceries or finances, Hunter says. If we are going to remain relevant, we need to be at the forefront.

Wait, There’s More!

This is just one section of the Anatomy Of Northern Credit Union series that appears in Credit Union Strategy & Performance. Read the whole discussion today.

April 14, 2020

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