After growing memberships by nearly 50% between 2009 and 2015, Tukwilla, Wash.-based Boeing Employees Credit Union is wrapping up a transition away from the branch network that fueled much of that growth.
Up until around 2003, BECU had only two branches in total which were built to support employees at nearby Boeing facilities. When the its field of membership allowed for more members throughout Washington State, a plan was needed to make sure members were supported through conveniently located branches. BECU also had a problem of low brand-awareness and needed a way to promote themselves to the sea of potential new members.
The opportunity arose for BECU to partner with SafeWay grocery stores to open 30 in-store branches that operated without a teller. Those branches include automated services and a few member-facing employees handling mortgages, new accounts and small business-related finances, but no tellers.
"The staff [was] focused on relationship building, problem resolution and teaching members how to use digital banking services," BECU's Senior Vice President of Marketing & Cooperative Affairs, Tom Berquist, said about the first grocery store branches offered by BECU.
BECU has now closed down a majority of its in-store locations, primarily because of the large growth seen at the $15.1 billion institution. Since 2009, BECU has seen an average of 7.23% membership growth each year, increasing from 631,000 members in 2009 to 941,000 in 2015.
"As we grew, those small in-store branches could not support the growth. When [the in-store branches] got up to having 5,000-10,000 members tied to the branch, things got a little busy. [Members] queued up back into the produce line [and] privacy became a bigger deal too," Berquist said.
Just two in-store branches remain, which are relatively small locations: around 325 square feet. As its SafeWay contracts were reaching term, the credit union searched for leasable locations around 2,500 square feet to support its 970,000 members. The locations are "usually in some type of strip mall-type setting, very rarely a standalone building," Berquist mentioned.
The BECU SVP credited the deal with SafeWay as one of the primary catalysts for the credit union's significant growth throughout the years. because BECU opened a large number of grocery store branches, they were able to kick-start their brand awareness, while capitalizing on changes to the local marketplace.
"Because we opened so many so quickly, it created a little more awareness and helped drive growth," the SVP said. "The combination of more branches in the market and strong brand awareness growth has been two big keys to our success."
Expanding – But Leaving Tellers Behind
BECU recently opened two new branches in the Spokane, Wash.-area to support the 5,000 members currently residing there. The two "financial centers," as BECU calls them, provide all the traditional services of a branch, but without a teller. The Spokane expansion will be led by BECU's Director of Commercial Banking Steve Hauschild.
According to the credit union, there is still a demand for brick-and-mortar locations to support member services. Seventy percent of new members, whose average age is 27-30, choose to join the credit union at the branch, even though the process to join has been completely digitized through BECU's website.
Only two of BECU's branches have traditional tellers, while the rest have been designed to make room for consultants and additional office space to support mortgage and small business investments.
"We run a huge amount of deposits through our ATMs because we are teller-less," Berquist said, adding "mobile deposit capture has been huge also." BECU recently adopted an online appointment-scheduling system, which was added to its mobile app to enable members set up meetings before coming to the branch.
The 80-year-old institution also plans on adding more branches into the Seattle market in the next few years which are "relatively skinny investments compared to if you were to build one from ground up," Berquist suggested.
