How can credit unions reconcile the costs associated with shared branching? It’s not hard to visualize the benefits of shared branching: A nationwide network of 4,500 branches sounds convenient and impressive by any standard. But, even as the economy wakes up a bit, it still can be difficult to rationalize new expenses. Will shared branching pay off in dollars and cents? It isn’t always easy to quantify. Some of the math is easy to do:
- Shared branching enables a credit union to offer its members the fourth largest branch network in the country for about the cost of hiring a single teller. That’s leverage.
- “Shared branching users generate more than four times the profit of non-users,” says Katie Elston, Senior Marketing Manager for CO-OP Shared Branching, Duluth, Ga. According to a Raddon Financial Group study conducted on behalf of CO-OP Shared Branching, 38.6 percent of households using shared branching are profitable, compared to 28.8 percent of non-user households.
- The Raddon study also found that credit unions that act as both issuers (allowing members to use participating shared branches to do transactions) and acquirers (accepting transactions on behalf of other credit unions) earned, on average, $23,000 in transaction fees annually. “Even when revenue generated doesn’t negate the total cost of participating in shared branching, it does offset issuer costs,” says Miller.