US Bank Steals Page From Credit Union Playbook
If you’ve never heard of Dell Credit Union, Ohio State University FCU or Kohl’s Credit Union, there’s a good reason.
They don’t exist.
It might have something to do with the branches US Bank has built to serve the employees working on the campuses of those organizations. Through US Bank’s On-Site Banking program, some of the largest companies in America are able to offer financial services to their employees via on-campus branches.
The list of US Bank’s On-Site Banking clients reads like a who’s who of American business and higher education:
- Best Buy -180,000 employees
- P&G – 135,000 employees
- Kohl’s – 133,000 employees
- Dell – 96,000 employees
- Thomson Reuters – 55,000 employees
- Caribou Coffee – 6000+ employees
- Schwan’s – 22,000 employees
- Hewitt – 5,000 employees
- Ohio State University
- Marquette University
- Gonzaga University
- Cincinnati Children’s Hospital Medical Center
- St. John’s Mercy Medical Center
Reality Check: 50 years ago, the branches on these companies’ campuses would have all been credit unions, not banks.
Watch this six-minute video from US Bank, and you’d swear you’re hearing a strategy straight from the credit union playbook. In the video, US Bank outlines its On-Site Banking service, promising to customize everything from branch design and hours — even its products and services — for the employees of large companies.
A six-minute video overview of US Bank’s On-Site Banking service. “Having a US Bank On-Site branch on your campus, is a great benefit for your employees and a no-cost addition to your campus,” the video’s narrator says.
Credit unions have — or, more accurately, “had” (past tense) — been serving companies with on-campus branches for more than 100 years. In fact, practically every credit union in the U.S. got its start by tying itself to a large employer. It wasn’t that long ago that the largest credit unions in the world sported the names of the corporations they once served exclusively: Boeing Employees Credit Union, John Deere Employees Credit Union, American Airlines Credit Union, Lockheed FCU, GTE FCU, Dow, Hewlett Packard.
Today, credit unions are building branches for the mass public and expanding with community charters while mortal enemies like US Bank build branches in corporate HQs and factories. Irony?
“We created this new way of banking in 2005 when we considered the changing banking patterns of our current and future customers,” Richard Davis, Chairman/President & CEO of US Bancorp, says in the video.
Today, US Bank’s On-Site Banking has grown to more than 60 locations at corporate, health care and college campuses.
“What makes On-Site Banking unique is skill and scale,” says Rick Hartnack, Vice Chairman/Consumer Banking at US Bank. “We have developed the largest on-site banking operation in the country, and that scale has given us the ability to run this business better than anyone else.”
It’s unclear by what measure US Bank considers its On-Site Banking operations “the largest in the country” when there is Navy FCU with 3.5 million members, 179 branches and $40 billion in assets. And State Employees Credit Union with 1.5 million members and 225 branches.
Reality Check: US Bank touts On-Site Banking as an innovation, but “the only thing ‘innovative’ about this is that they spent a lot of money to make a video,” as Frank Rauscher says in a comment on BankInnovation.net.
Branch in, vending machines out
The most common concern US Bank hears from On-Site Banking prospects is “We don’t have enough space.”
“Every single partner we’ve worked with has had the exact same challenge,” says Daniel Hoke, Division Manager/US Bank On-Site Banking, in the video.
Hoke says US Bank customizes solutions for each unique situation. “We take into consideration the aesthetics and the limitations on the space itself, and we can come up with a creative solution to make the most of what’s available.”
In one location, US Bank completely gutted a space used for vending machines and squeezed a branch into it.
“You’d be surprised at the spaces we can utilize,” says Denise Zajac, District Manager/US Bank On-Site Banking.
Tip of the Hat: Thanks to BankInnovation.net for finding the video.
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As a former P&G employee I can tell you that it was a huge benefit to have a US Bank branch in the building. They went out of their way to offer top notch service. I worked in a building with aprox. 5,000 employees.
U.S. Bank branches were not in all locations though (only one that I know of in cinci area) – and P&G also has (had?) a credit union that was located at the global headquarters in downtown cinci.
My two cents on the video is that it shares the story and experience of the benefits of being a “SEG” brings to the company. Way more interesting to watch and listen than read a web page with 5 paragraphs. This can be used in combination when visiting and calling potential “SEGs”.
Ohio State does have a credit union–Credit Union of Ohio. They’re AWESOME, and they’re on campus too. I wouldn’t bank any place else.
The only reason US Bank has a branch on OSU’s campus is because they coughed up a million bucks (probably from TARP funds) to put their branch inside the new student union. Before that, another behemoth bank had their branches in the old student union–I guess they got outbid. Don’t be fooled, people. Big banks aren’t becoming more “credit union-like.” They’re just paying to play. When their branch contract runs out, OSU will give top billing to some other financial institution if US Bank can’t come up with money or simply gets outbid.
You’re right K.H., credit unions are being replaced on campuses by colleges and universities who can lease space to top bidders. With all the cuts in education, who can blame them? But that only explains colleges and universities. How about all the other companies in other industries — retail, manufacturing, etc.? Are they getting outbid in these situations too? Or outsold by US Bank who may be promising to out-service credit unions?
So James, are you saying you preferred the video over the article?
Yes, the video would be a very effective B2B sales tool. Presumably this is what the video is for. It was uploaded by US Bank to their corporate YouTube account.
Oddly, it appears there is zero information about On-Site Banking anywhere on the web — not even a peep at the US Bank website.
Living in a small university town, I was astounded to hear that UC Davis partnered with US Bank to bring a branch on campus. There are 4 credit union’s locally, two with ATMs right on campus. It’s all about the money. As a mid-size credit union we simply can’t compete with the giving of millions of dollars. I wonder how their customers feel paying higher fees to buy these partnerships? Here’s a link to the article announcing the plans from 2009.
http://news.ucdavis.edu/search/news_detail.lasso?id=9248
Historically speaking Christina, wasn’t UC Davis Yolo FCU’s turf? I can’t recall offhand how Yolo FCU got its start, but I thought it had something to do with the staff of UC Davis somehow. Maybe I’m misremembering and it started as an agricultural credit union?
Yolo FCU was originally founded by Yolo County Employees although UC Davis was one of our first SEGs added. However, USE and Golden 1 both hosts ATMs on campus and were originally founded for University and or State Employees. I believe both have a decent market share of UCD but what will happen when the US Bank branch opens on campus? Yolo FCU will still continue to market to this segment but never would have guessed that US Bank would be my direct competition.
Great post JP.
BK