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Attracting young members through partnership

Tue, Jun 2, 2015

Columbia, Maryland

An article by Erik Payne published in CreditUnions.com discusses the success of a Texas credit union’s collaboration with a local coffee and tea house.    The May 27 article follows: 

Sustaining membership
with a cup of tea


The newest branch of GECU ($2.0B; El Paso, TX) is located on N. Oregon Street and University Avenue, on the edge of the University of Texas at El Paso’s campus. It’s a modern-looking, stone building, and aside from the blue and green GECU sign, it looks like anything other than a financial institution. CEO Crystal Long is ok with that.

"The less it looks like a financial institution the better," she says.

The fact is, the branch — which opened in October 2013 — is not dedicated entirely to financial services. Inside, there is a tea house where members and non-members alike can grab food or drink, work, and learn about their finances. Other credit unions offer tellers and kiosks inside retailers and schools, but this branch might be the first of its kind.

Call Me. I Have An Idea.

Two years ago, Kinley Pon walked into GECU’s operation center and asked to speak with someone about starting a partnership between his business, Kinley’s Coffee House & Teas, and the credit union.

“I think he handed us a note or a business card and said, ‘Could you have somebody call me? I have an idea,’” Long remembers.

The idea ultimately blossomed into a partnership wherein the two entities share a space that Pon owns and GECU leases — Long declined to disclose specific amounts of the partnership’s purchase agreement. As for the layout, a local firm designed the space with input from both parties.

“This was a joint effort all along the way,” Long says. “We worked together to create something we thought would resonate among the kids at UTEP and would serve the community well.”

On the first floor of the two-story building, a GECU concierge greets visitors and directs them in the direction of either an ATM or chamomile tea, maybe both. Kinley’s is located on one side of the lobby; ATMs and personal teller machines (PTMs) are located opposite the tea house. PTMs offer all the standard teller services, but the physical teller interacts with the member virtually from another GECU location. PTMs are available from 8 a.m. to 8 p.m., Monday-Friday, to accommodate college students’ need for flexible hours.

“Not everyone is available from 8 to 5 to do their transactions,” Long says.

A “smart office” fills the remainder of the first floor and offers the ability to interact virtually with a GECU employee who handles account and loan requests as well as problem resolution. The credit union uses the second floor for free financial education workshops but also encourages members and customers to use the space to relax, work, and eat.

“It’s not your traditional branch,” Long says. “It’s quite the opposite.”

The four-employee tea house branch pales in staff and location size to the credit union’s 10,000-square-foot branches, but, as Long says, it’s important for the credit union to find new ways to reach young potential members, especially as it attempts to grow younger.

“It’s important to go out in those areas with a smaller footprint than we’ve had in the past,” Long says. “It’s a way we can be sustainable because we’re bringing on younger members, which we will need.”

How It Works

Long considers Pon an important man in the El Paso community. His personality and business attract many UTEP students to his tea house, offering them a hot drink or a bent ear should they want either. She believes Pon is more concerned about what he can do for the El Paso community and its students than what they can do for him financially. GECU and Pon had similar ideologies before entering into this partnership, something that has and will help it grow.

“We had philosophies that were aligned,” Long says. “His organization as well as ours has a tremendous heart for the university and the students. [We want to] provide whatever it is they need to be successful.”  

El Paso is partially a college town, but it is also a credit union one. Of the approximately 800,000 residents, Long estimates 500,000 are members of a credit union. GECU, a credit union with a community charter, has 310,000 members.

Like other credit unions, GECU wants to grow its membership among the younger demographics. Students of UTEP, many of which have bank accounts with high fees or no accounts at all, fit this profile. GECU offers them an opportunity to bank smarter, and its partnership with the well-known UTEP student hang out has offered immediate results.

According to Long, the tea house branch opened 100 new checking and savings accounts for students in the first month after opening.

The Future Is Now

There are no similar branch designs in El Paso or its surrounding communities, and GECU has no immediate plans to open additional tea house locations. However, Long believes the future of credit union branches will resemble her partnership with Kinley’s, which encourages customer bases to overlap and brings business to both entities. Plus, less square footage means lower operating expenses, which allows the credit union to increase its number of locations and offer more convenient options for members who haven’t always had a branch on their block.

This might be the future, but change takes time to catch on. In the meantime, the credit union remains cognizant of its end goal.

“It's a long-term strategy,” Long says. “I see it as providing service to students who need it and need an alternative to the payday lender, to the check casher. It’s not a money-maker, certainly not on day one. It’s more of a sustainability strategy.”