Successful Expansion Requires Thoughtful Strategy & Commitment to Members
It may not have made sense to many people to hear that a credit union was opening a new branch or acquiring new locations in the midst of a pandemic, due to limited services at branch offices and increased reliance on technology for a wide range of transactions. However, expand is what many credit unions did. According to data from the National Credit Union Administration, in September 2020, 745 credit unions had plans to add branches or expand facilities.
One of these credit unions was Mountain America Credit Union. Founded in the 1930s, Mountain America started with one location in Utah. Now, in 2022, the 102nd branch opened recently, and the credit union has branches in six states—Arizona, Idaho, Montana, Nevada, New Mexico, and Utah.
“We never put expansion plans on hold,” said Sterling Nielsen, president and CEO of Mountain America Credit Union. “Construction shortages slowed some our renovations and construction but they did not stop us.”
The growth of Mountain America has been a mixture of mergers and new construction to add branches where needed in new markets. “Mergers provide a base of membership that we can grow by providing services that members in the market need,” explained Nielsen. “In Idaho, mergers with three different credit unions provided an established membership, then we expanded after we identified a need for more locations to serve members.”
The credit union has found that overlapping branch service areas by building branches within three to five miles of each other provides multiple touchpoints for members, which increases the opportunity to conduct business in-person. However, staffing for some services may not be full-time. For example, each branch may not have a dedicated investment advisor or loan officer but will have them in the branch on certain days or by appointment.
Limitations of in-person branch services at all credit unions during the pandemic increased the adoption of technology by members, but Mountain America knows its members well and has found that when a new branch opens, people flock to it for the in-person experience. “We have found that members may use online tools for convenience, but they want the whole relationship—which includes nearby branches they can visit,” said Nielsen. “During the pandemic, in-person transactions dropped but within weeks of re-opening branches, in-person transactions were back up to our pre-pandemic levels.”
Even with the desire for personal relationships with their credit union, members are more mobile and use digital tools and the contact center more often than prior to the pandemic, said Nielsen. This does not mean that the credit union won’t continue increasing its physical presence but the organization may not expand as quickly as in the past, he said.
Expansion as an Art
Successfully merging two organizations is an art that starts with a strong culture to member service. “We look for credit union teams that can complement our organization,” said Nielsen. Mountain America team members also have opportunities to move to new locations to help train branch staff, lead branch operations and increase membership. Blending staffs from both organizations leads to a smoother transition, said Nielsen.
Connecting with communities is another way that Mountain America builds its brand and reputation in new markets. Involvement ranges from branches supporting and brand that can be expanded to other areas. When possible, existing branch buildings are renovated and updated to reflect the Mountain America brand. Staff members of acquired organizations are oriented to Mountain America’s philosophy, vision, and commitment. In addition, the organization creates beneficial partnerships with local organizations, from allowing a community theatre to use the corporate headquarters parking lot after hours for ticketholders, to sponsorship of the local athletic and entertainment event spaces such as the Mountain America Community Iceplex at Arizona State University and the Idaho Falls Mountain America Center.
Building a strong team and connecting with local organizations is an important step to overcome a community’s unfamiliarity with the benefits and services of a credit union. “Credit unions have a huge identity crisis in some states,” admitted Nielsen. “People in Utah and Idaho understand credit unions but other markets require more education. We look for the best way to reach people and have found that word-of-mouth is often the most effective.”
Underserved communities have supported some of Mountain America’s most successful branches, said Nielsen. “As soon as we opened the doors of a new branch in an underserved community in Salt Lake City, it was successful, and we ended up adding four branches in the community,” he said. “They all stay busy, mostly due to word-of-mouth from existing members.”
Although Mountain America’s expansion strategy has been very successful over the years, not everything was perfect, admitted Nielsen. “We have made a few mistakes, such as opening a location that didn’t take off as expected,” he said. “It’s important to ask why, and it’s okay to close the branch and re-locate to a new location that is more beneficial to members.” Sometimes ‘the why’ is as simple as the wrong manager at the time, changes in demographics or other reasons, but the best strategy is to admit that it is time to pivot, he added. Even though the pace of expansion may have slowed for Mountain America, it has not stopped, reiterated Nielsen. “We are always looking for opportunities to continue a slow, methodical growth in markets where there are options to increase credit union representation.”