ike many of the physicalspaces we frequentedbefore the pandemicbegan, the credit unionbranch can be associated with aform of longing – longing for thedays when we could enter a public place without wearing a mask,when our only concern about acrowded business was how longthe wait might be, and where wecould strike up a conversationwith a stranger without worryingabout stepping too close to them.
While digital tools have done afine job of allowing us to completefunctional tasks without having togo out in public, entering a physical, shared space delivers a sort ofmagic that can’t be replicated online. Walk inside a business, andthe combination of colors, designs, scents and sounds that havebeen carefully selected for thespace will influence the way youperceive that business’s brand. Interact with others, and you’ll havethe advantage of interpreting nonverbal cues and body language,build chemistry and develop relationships – all things that aredifficult to achieve over a screen.
And of course, there won’t be any
awkward moments of technology
going awry, like frozen screens
and dropped connections.
Despite the ramping up ofdigital banking that’s occurred atcredit unions this past year, we’velearned that the branch channelstill isn’t going anywhere. There’ssomething about having a physical presence in a community thatnot only can’t be reproduced virtually, but that plays a key role ingrowth and business development for credit unions.
CU Times has been revisiting thetopic of credit union branch evolution annually for the past several years. In 2019, leaders in theindustry were talking about howthe branch was beginning to lookdifferent – no more roped off linesin front of a teller wall, “universal”employees who roamed around anopen space wielding tablets andtaking a consultative approach toservice, and pod-like structureswith interactive screens wereamong the big themes discussed.
Last year, with everythingclosed, credit unions quickly pivoted to drive-thru and appoint-ment-only models, and saw theirdigital and self-service investments being put to the ultimatetest without warning. Those thathad already taken the plunge withtools like ITMs pre-pandemicwere thankful they did so whilethose that didn’t were experiencing some form of regret.
Now, a year into varying levelsof business capacity restrictions,we’re reflecting on how the pandemic has shaped the branchchannel further – how our circumstances have forced creditunion leaders to change the waythey think about the branch, aswell as how they’ve acceleratedsome trends that were already inmotion pre-pandemic.
I recently spoke with expertsfrom Fiserv, the fintech and coreprocessing giant based in Brookfield, Wis., and Strategic ResourceManagement (SRM), a Memphis,Tenn.-based consulting firmserving banks and credit unions,about what the future holds forcredit union branches and identified these four takeaways:
Credit union branch net-
works are being rationalized. Bill
Handel, vice president of research
for Raddon, a Fiserv company,
shared that the number of finan-
cial institution branches has been
declining since 2008, and in 2020,
about 60% of them happened
among large banks that had gener-
ously peppered the maps of metro
areas with their locations. Since
credit union branches haven’t
multiplied at the pace big bank
branches have, the absence of foot
traffic seen in 2020 didn’t require
them to reduce their branch count
at the same scale. Instead, credit
unions have focused on increas-
ing efficiency throughout their
branch network and ensuring it
meets the needs of their member-
ship. “Think of it as branch ratio-
nalization, not closure – making
sure their branches are in the right
places,” Handel said.
Branches will look differentthroughout a single credit union’snetwork, and there will be anincreased focus on self-service.“A big theme will be differentiation and segmentation within thebranch network,” Myron Schwarcz,EVP for SRM, said. So a creditunion might have one fully-staffedflagship branch where the majority of its members are located thatoffers everything from basic transactions to financial counseling,several small locations that onlyhouse ITMs and a few staff members hired to assist members withthe machines, and another subsetof branches catered to memberswho desire a particular experience,such as those seeking financialadvice or who are looking to opena new account, he explained. Self-service banking tools will be popular, as well as video – members willnot only interact with credit unionstaff through devices at home, butthrough screens located insidebranches, experts said.
Credit unions will need tocontinue improving the member experience across channels.Giving members the option ofconducting their transactions byphone, text, on a web browser, ona mobile app or in person is crucial to prioritizing conveniencefor the member, but it also leadsto broken member journeys. In arecent survey from Lightico, over30% of 1,008 participating consumers reported being directedto a physical branch or asked toprint, sign and email papers during an online transaction.
Schwarcz explained that credit
unions have not been anticipa-
tory enough in their interactions
with members – that they are of-
ten pushing members to certain
channels that aren’t convenient for
them and being forced to navigate
them on their own. “Going for ward,
credit unions are advised to antici-
pate what the members’ needs are
and give them solutions, interac-
tions and experiences where and
when they want them,” he said.
Community engagement willplay a role in branch networkstrategy. Where a credit unionchooses to place branches oftentells a story about where it sees themost opportunity for local businesspartnerships and member growthwithin a community. For example,while some financial institutionsshut down branches located ingrocery stores this past year due todwindling numbers of shoppers,OnPoint Community Credit Union($7.9 billion, Portland, Ore.) is currently opening 20 new branches inside popular Oregon grocery chainFred Meyer, demonstrating thecredit union’s commitment to partnering with a business that current and prospective members areknown to frequent, pandemic or nopandemic. “The credit unions thatcan be flexible and adapt, proactively look for community partnersand continue to cross-sell to existing members are those that willsucceed,” Schwarcz noted.
As CU Times continues to follow news of the evolving creditunion branch, I’m personallylooking forward to seeing morecreativity being injected intobranch designs. One that comesto mind is an O Bee Credit Union($421.6 million, Lacey, Wash.)location in Tacoma, Wash., thatI visited in 2018, which has ahistory of serving beer makersand placed decorative beer tapsacross the teller windows. AndI’m loving the look of MichiganLegacy Credit Union’s ($260 million, Wyandotte, Mich.) new retrobranch with the ’50s diner layoutand jukebox ATM (see page 8).Branches are not only critical togrowth – they’re an opportunityto showcase the personality of acredit union and its members, andallow members and employees tohave a little fun. Because let’s faceit, once we’re able to walk into acrowded public space worry-freeagain, that’s what we’re all goingto want to do. n
The Power of Place
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