Expanding credit union reach: How ATM outsourcing drives growth in new markets
In today’s rapidly evolving financial landscape, credit unions face both challenges and opportunities. As big banks continue to close branches, creating banking deserts across the country, credit unions are stepping up to fill the void. But building branches is an expensive outreach strategy.
One powerful and affordable option for expansion is ATM outsourcing, which allows credit unions to extend their reach without the hefty investment of building new branches. In this article we explore how ATM outsourcing is revolutionizing credit union growth in underserved areas.
Credit unions: Filling the void left by big banks
Recent years have witnessed a significant decline in traditional bank branches. In 2023 alone, 1,409 branches closed their doors, following 1,854 closures in 2022 and a staggering 2,928 in 2021. This trend has left many communities without easy access to financial services, creating what industry experts call “banking deserts.”
As these banking deserts emerge, credit unions are seizing the opportunity to expand their footprint in new communities. However, building a full-service branch in a new area often requires a substantial membership base to justify the investment. This is where ATM outsourcing comes into play, offering a cost-effective solution for credit unions to establish a presence in new markets.
ATM outsourcing: A strategic solution
ATM outsourcing allows credit unions to deploy branded ATMs and Interactive Teller Machines (ITMs) in strategic locations without the high costs associated with building and staffing a traditional branch. This approach enables credit unions to serve existing members, attract new ones, and increase brand visibility in target areas.
Credit unions can leverage ATM outsourcing to place off-site ATMs in various high-traffic locations, such as:
- Drive-up ATMs in busy parking lots
- ITMs at local grocery stores or other retail environments
- Branded ATMs at convenience stores
- ATMs at local employer locations
These strategically placed machines provide convenient access to financial services, helping credit unions expand their service area and attract new members.
While managing off-site ATMs can be challenging at the best of times, when machines are located in the next county, across the state or even in the neighboring state, it can become even more time consuming and expensive. However, ATM outsourcing providers specialize in handling all aspects of ATM and ITM operations—allowing credit unions to overcome these challenges so they can focus on core business activities.
Benefits of ATM outsourcing for expansion
Affordable ATM outsourcing provides numerous advantages for credit unions looking to expand:
- Cost-effective market penetration: Establish a presence without the high costs of building and staffing branches in new areas.
- Increased membership and service area: Attract new members and serve existing ones in a wider geographical area.
- Enhanced brand visibility: Branded ATMs increase awareness and reinforce the credit union’s commitment to the community.
- Operational efficiency: Outsourcing providers handle maintenance, cash management, and security, freeing up credit union resources.
- Scalability: Easily adjust the number and location of ATMs based on member needs and market conditions.
The future in the changing financial landscape
As the banking industry continues to evolve and big banks close branches, credit unions must adapt to remain competitive and grow. ATM outsourcing offers a flexible, cost-effective solution that allows credit unions to:
- Respond quickly to market opportunities
- Serve members in banking deserts
- Compete with larger financial institutions
- Provide 24/7 access to essential financial services
As banking deserts continue to grow and consumer preferences shift towards digital and self-service options, credit unions have an opportunity to position themselves as innovative, member-focused institutions ready to meet the changing needs of their communities. And ATM outsourcing or managed services are powerful tools that allows credit unions to leverage off-site ATMs and ITMs to establish a presence in underserved areas, increase membership, and enhance brand visibility—all without the substantial investment required for traditional branch expansion.
Are you ready to grow your credit union? Click here or fill out the form to discover how ATM outsourcing can provide a competitive advantage.
