It’s not just about the cards: are your branches “debits” or “credits”?

By Steve Kelley

I was buying gas the other day at the convenience store down the block (what’s up with these gas prices, anyway?), swiping my card at the pump, when the question came up on the little screen: debit or credit? Now, I was using a debit card linked to my checking account, but it actually works on both systems. So, I had to decide which way I wanted the transaction handled, and push the appropriate button before I could get the gas. (I chose debit for some reason, even though choosing credit would give my credit union a bigger share of the transaction. Sorry, fellow members!)

If you’re like me and use plastic to buy everything from a loaf of bread at the corner market to hundreds of dollars’ worth of building supplies at the local Big Box store, “debit or credit?” is probably a question you’ve become accustomed to answering. In another vein, though, “debit or credit” is a question people who run credit unions ought to be asking themselves often, about many aspects of their operations: Is this a debit or a credit? Is it taking away from, or adding to, the overall success and well-being of our credit union and its members?

This may seem obvious. “Of course,” you might say, “we ask ourselves that question about everything we do. And we would never do anything that detracted from our credit union or our members!” But is that really the case? Or are there some things that you’ve been doing for so long that you can’t really say when or how you made the decision to start doing them, and once you started you never questioned their value? Like running ads with your current CD rates in the local paper every week, even when your rates are the lowest in town and you don’t really want any new deposits? Or offering three checking accounts even though 98% of your members choose the “free” option, and maintaining the “premium” accounts for the few who choose them is actually costing you money?

I’m convinced that asking the “debit or credit” question is something we have to be intentional about, because it’s just too easy to keep doing things the way we always have without being sure about the value of those actions. And one area where I think that’s especially important is when it comes to our branches – because the credits can be substantial, but the debits could be costing us more than we know. For instance:

· Is our location down the block from our largest SEG a credit because it’s convenient for members who work there, or is it a debit because much of the banking is done by spouses who live and work on the other side of town?
· Is the fact that we have 10 teller stations in our lobby a credit because we can staff up to meet rising demand, or is it a debit because we never have more than 4 tellers working and members wonder why we don’t fill those empty stations to make their wait shorter?
· Is our low-key exterior a credit because it shows we’re not all highfalutin like our big bank competitors, or is it a debit because potential members don’t even know we’re there?
· Is holding off on expansion a credit because caution is important in times like these, or is it a debit because we’re missing out on some of the lowest land and construction prices in years?
· Is spending money on becoming more energy-efficient a debit because we just don’t have the money right now, or is it a credit because we’ll get the investment back quickly through savings and people will respect us for being good corporate citizens?

These are just some of the hundreds of questions we ought to be asking ourselves about our branch networks, and about everything else we do, over and over again. And when we do, we need to take action to eliminate the debits and turn them into credits. It’s a never-ending process, but a required one if we’re going to win in this ever-more-competitive market.

Now, who’s going to do something about these gas prices?