CHICAGO—Five years ago, Alliant Credit Union went through the kinds of significant changes facing many CUs now as a result of the coronavirus pandemic, and as a result is offering some advice and strategies.
The $12.3-billion Alliant CU went totally digital, and CEO David Mooney acknowledged making such a transition requires courage, focus and the ability to accept some members accustomed to using branches will be unhappy, feel alienated and leave.
During CO-OP’s THINK20 Virtual event, Mooney discussed the challenges more credit unions may encounter as they choose to migrate more of their services away from branches to digital, and possibly close some locations.
Getting ‘Committed’
A National Direct, Digital Provider
Mooney began by emphasizing his credit union, which originally served employees of United Airlines, had already been heavily reliant on digital banking.
“We'd always had a fairly heavy reliance on remote self-service access, so the transition for us was a little easier,” he said. “About five years ago we decided we wanted to become digital first, committing to becoming a national digital direct provider.”
That meant the credit union made investments in digital technology and digital talent, both in the front office and back offices, while also moving to close physical locations.
“That was difficult. We had members who relied in part or in all on our branches. So we did have some strong backlash. I learned some new word contractions I've never heard before that I can't repeat on this broadcast,” joked Mooney.
The Strongest Reaction
But the strongest reactions, Mooney recalled, came from members sharing concerns for Alliant Credit Union’s staff.
“Frankly, that was the hardest part of the decision,” said Mooney. “We had a highly professional, highly productive branch staff and these folks were losing their jobs through no fault of their own. We have always been very upfront with our employees that branching was not a key part of our strategy, so it may not have come as a huge surprise to them. And in the end we knew it was the right thing to do strategically for the good of our collective membership.”
The credit union lost some members in the process, Mooney said.
“But our mission is we serve the interests of the collective membership. And most of our members, even those who depended on branches, understood the very high-value givebacks we provide all year is in large part due the fact we operate a small branch system,” explained Mooney.
Making the Switch
Mooney described how he knew one day members had made switch to the new digital Alliant. During a credit union event one retiree held his cell phone in the air and said, “Now I do all my banking on this.”
“God bless him,” said Mooney, adding that made it clear to many what the focus of the credit union had become.
Mooney stressed the big driver in getting that member and so many others to make the jump to digital was heavy marketing on the advantages of electronic services.
“We really worked hard to promote the time and place convenience aspects of online and mobile banking,” said Mooney. “As well as having fun with the idea that that the branch is really in your pocket.”
Value of Communication
For other credit unions, Mooney stressed constant communication with members during the pandemic is critical.
“We really believe in providing useful information people need, especially now,” said Mooney. “So we've been communicating things to give members more knowledge around things like forbearance, loan modification options, and how the credit union is handling the economic impact from this crisis. We've been trying to be not overly intrusive with people, but provide them with information we think will be useful and helpful to them now.”