It's estimated that consumers spend at least two days per year waiting in line for services at retail environments. This cross-market frustration, spurred on by the preferences of the Gen Y consumer, is leading credit unions to transform branch operations, with an emphasis on providing interactive, self-service options.
The branch isn't entering an end cycle; rather it is evolving with more of a concentration on sales than service. As technologies such as mobile and mobile remote deposit capture contribute to the decline of basic branch transactions, the value of the branch channel remains significant. In fact, the unique credit union concept of shared branching is becoming more important than ever. As the number of individual credit union branches decrease, the nationwide network of shared branch locations will enable credit unions to maintain their community presence.
Market indicators conclude that branches are increasingly viewed by members as destinations to conduct advanced transactions such as loans and opening new accounts. This will require a branch transformation process based on new technologies, but much more than that – it will also involve restructuring employee responsibilities and enhancing environmental designs.
To sustain the vitality of the branch model, credit unions must decrease overall expenses and determine ways to increase revenue. The best solution is to intertwine self-service technologies with human interaction and oversight.
For instance, video-based solutions based on Skype-like technology enable credit unions to provide a person-to-person experience using a combination of personal member service with the high touch of remote video capabilities. Branch transformation may have a self-service view of the world with personal interactions reserved for more complex types of transactions.
Moving Toward Automation
New technologies at credit union branches can include self-service stations, teller automation, alternative communication channels and integrated channel support. Traditional physical branches will need to morph into multiple channel delivery centers.
At first glance, this technology may seem cost prohibitive. However, transforming a branch is commonly done by enhancing existing hardware and software. Credit unions can leverage their investments in facilities and technology to create a more effective branch. Components like video technology at the ATM, dedicated video rooms, intelligent use of digital signage and in-branch kiosks for simple transactions are all within reach of credit unions to employ today.
Automation may, in fact, reduce risk as human error is taken out of equation. At the same time, advanced fraud detection technologies are built into many self-service solutions.
Branch Transformation and Employees
For many credit unions, undertaking a branch transformation of the physical environment may include placement of free flowing teller pods, automated sections of the branch where self-service is available and 24/7 self-service access options such as ATMs outside of the branch. It is imperative that employees understand how to use and explain these new service options to members. Traditional branch users can easily be overwhelmed by the process-pulling too much of the human element out of the branch is not a good thing.
The increase of automated tellers does not necessarily have a negative impact on branch employees; however, it does redefine respective roles. Southwest Airlines is a successful self-service model because while self-service kiosks have increased operations efficiency, the company also provides employees on site to help with questions. Credit unions can take the same dual approach.
Integration of Mobile Services
In the U.S., 57% of smartphone owners use mobile banking features. We will see a decline in branch traffic as more members and consumers become more mobile savvy for deposits.
Yet, when credit union employees interact with members, the member-customer relationship is strengthened. This can be achieved, in part, through the combination of mobile banking within the branch environment.
One example is when an employee with a tablet approaches people waiting in line for a teller. By offering to help them deposit their checks via mobile deposit, credit union employees can demonstrate that they are there to make the member's life easier. They are also providing training so that the member is more comfortable using that channel in the future.
Credit unions will have to reconsider service models, phone- and Internet-based account services, lending services and plastic card support as part of their branch transformation. In addition, call center support may need to include help desk services for multiple channel access. Regardless of channel or technology, however, members will need to feel you're adding value and convenience.
Sarah Canepa Bang is president/chief operating officer of FSCC LLC and chief strategy officer of CO-OP Shared Branching.
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