What is Shared Branching?

Shared branching is a cooperative network that allows credit union members to perform transactions at any participating credit union branch, not just their own, providing a level of convenience that rivals and often surpasses the reach of even the largest banks. With more than 5,400 branches nationwide, including over 90 in Tennessee, this expansive network makes it easy for members to conduct their business anywhere, whether they move, travel, or are in diverse geographical locations. Through the Co-op Shared Branching network, your credit union can retain members by offering a seamless and convenient banking experience, ensuring they remain connected to your services no matter where they are.

The Member-Centric Advantages

Unparalleled Convenience

With over 5,400 shared branch locations nationwide, including more than 90 in Tennessee alone, members gain access to an extensive network of service points. This means your members can:

• Conduct transactions while traveling
• Maintain their accounts even after moving to a new area
• Access their funds in diverse geographical locations

Loyalty and Retention

Shared branching strengthens the bond between credit unions and their members. By offering bank-anywhere convenience, you provide a compelling reason for members to stick with your credit union, even when life changes might otherwise prompt them to switch financial institutions.

Understanding Issuer and Acquirer Roles

In the shared branching network, credit unions can participate in two primary roles: Issuer and Acquirer. Let’s break down what these terms mean and how they function within the shared branching ecosystem.

What is an Issuer?

An Issuer credit union is one that allows its own members to use shared branching services at other participating credit unions. Here’s what it means to be an Issuer:

• Your members can conduct transactions at any shared branch location, not just your own.
• You’re essentially “issuing” permission for your members to access their accounts through the broader network.
• Your credit union doesn’t process transactions for members of other credit unions.

Example: If Credit Union A is an Issuer, its members can walk into any participating shared branch (say, Credit Union B or C) and conduct transactions as if they were at their home branch.

What is an Acquirer?

An Acquirer credit union takes on a more active role in the shared branching network. As an Acquirer:

• Your branches accept and process transactions for members of other participating credit unions.
• You’re “acquiring” or taking on transactions from guest members who belong to other credit unions in the network.
• Your own members can still use shared branching services at other locations (like an Issuer).

Example: If Credit Union B is an Acquirer, it allows members from Credit Union A or C to come into its branches and conduct transactions, even though they’re not direct members of Credit Union B.

Benefits of Each Role

Benefits of Being an Issuer

As an Issuer, your credit union:

1. Enhances Member Satisfaction: Your members gain access to thousands of locations nationwide, increasing convenience.
2. Improves Member Retention: Members are less likely to leave your credit union when they move or travel, as they can still access their accounts easily.
3. Expands Service Area: You effectively increase your geographical reach without the cost of opening new branches.

The Acquirer Advantage

Becoming an Acquirer offers all the benefits of being an Issuer, plus some significant additional advantages:

1. Increased Foot Traffic: By welcoming guest members, you bring more people into your branches.
2. Community Presence: You become a financial hub in your area, serving a broader community.
3. Operational Efficiency: Higher transaction volumes can help optimize your branch network and staff utilization.
4. Non-Interest Income: You earn fees for processing transactions for guest members, creating a new revenue stream.
5. Potential for Growth: Exposure to guest members could lead to new account openings and membership growth.

Choosing Your Role

Many credit unions start as Issuers to provide added convenience to their members. As they become more comfortable with the shared branching concept, they may choose to become Acquirers as well, maximizing the benefits of the network.

Importantly, a credit union can be both an Issuer and an Acquirer simultaneously, allowing its members to use other shared branches while also serving guest members in its own branches.

Getting Started with Shared Branching

Joining the Co-op Shared Branch network is a strategic decision that can significantly impact your credit union’s growth and member satisfaction. Here’s how to get involved:

1. Assess Your Needs: Determine whether you want to start as an Issuer, Acquirer, or both.
2. Evaluate Your Technology: Ensure your systems can integrate with the shared branching network.
3. Train Your Staff: Prepare your team to handle guest member transactions and promote the service.
4. Promote the Service: Let your members know about this new benefit and how to use it.

The Future of Credit Union Collaboration

Shared branching represents the credit union movement at its best – cooperatives working together to provide better service to all members. As the financial services landscape continues to evolve, shared branching offers a powerful tool for credit unions to remain competitive, grow their reach, and increase member satisfaction.

By participating in shared branching, especially as an Acquirer, your credit union can expand its service footprint, offer bank-anywhere convenience, grow deposits, and tap into a new non-interest income revenue source. It’s a win-win situation that embodies the credit union philosophy of “people helping people.”

Take the next step in your credit union’s growth journey. Explore how shared branching can benefit your institution and your members. Contact our team today to learn more about the Tennessee League Shared Branch program and how you can get involved.