The Branch Transformation

Before I sat down to write about the life changes of credit union branches, I had to do one thing I haven’t done in a very long time … visit a branch of my own credit union. As usual, the staff were great, it was painless, and I even saw some of those millennials that people say only do their banking through their mobile device. I was wondering how the branch would change in the next few years or how it will need to adapt to the changes going on in our industry, especially with the new Capital One commercial talking about its Capital One Café concept.

The primary way branches have been changing has been around becoming more member-centric. Which isn’t a big stretch of the imagination given that that is why credit unions exist. In talking with some credit unions, there’s been a move to be less formal when a member walks through the door – for example, having pods set up rather than the usual teller line that creates a barrier between the member and the employee; or having a “Wal-Mart greeter”-type set up at the door to direct where the member needs to go, who they need to talk to, or use a pad to check them in and have their information ready when they go talk to their representative. These little touches can create a point of interaction that didn’t exist before and allows more time to get to know the member on a more informal basis.

The Teller Transformation

We continue to hear (and find through our research) that mobile presence is needed in order to satisfy more members’ needs to complete their transactions remotely. But, I also see a case where branches will be needed and must adapt to the functionality members want. In our research report “The Future of the Branch,” based on a research colloquium that was held, authors discussed how credit unions can move to an extended enterprise model. That means, how can credit unions manage all their channels (including third-party partnerships) in a more holistic fashion in order to give the member the same service level across the board? This would require in-branch staff (getting away from the name “teller”) to become very familiar with the other channels and feel like they are a part of the evolution rather than being phased out. Increasing their knowledge of all products offered, developing sales skills instead of focusing on teller training, and learning how to be a member advocate will be necessary to evolve the branch function. Also, it’s important that they are rewarded for directing members to use the other channels. If they have incentives for referrals for a new loan that gets booked through the branch, the same scenario needs to be in place for the other channels.

The Access Point Transformation

The physical branch entity will never completely go away. In our recent research report, “The Credit Union of the Twenty-First Century,” authors said there will always be value in brick and mortar for these reasons:

• They provide a safety net and convey a sense of comfort and reliability to the member. Seeing my local branch on the corner gives me a sense of knowing it’s there if I need it, and that my finances are safe and sound.
• Face-to-face service is still necessary in some peoples’ eyes for many of the specialized services or sensitive financial planning. We don’t want our members only using us for transactions – we want them to know they can still sit and talk about retirement, saving for college, etc.
• Small businesses still need to use branches for day-to-day operational transactions such as depositing a batch of checks and getting change.
• A branch can offer services in parts of the country where cell phone or internet coverage is deficient. Not all of us live in metro areas that have 4G or 5G coverage and those people still need to do their banking somewhere.
• A physical place advertises local presence, generates networks and jump starts membership growth.
• It compliments multichannel service delivery strategy. You can have a strong mobile presence, and still be able to meet the non-mobile needs of your members and be a one-stop-shop.

But most importantly, branches need to be available to serve every consumer. At Filene, we have done a lot of work around serving the underserved and how credit unions can take on that responsibility. Without branches, there would be some parts of the country where people would not have access to financial services.

The Mobile Transformation

As our members use mobile for most transactions, credit union branches can be the resource for all other financial matters. As an example, at one of Filene’s most recent research events, there were discussions on how credit unions can offer resources, education and practice to their youngest members. Elizabeth Odders-White of nodramaturg coaching + consulting offered ways for this to happen. This demonstrates how the view of the branch’s purpose can be changed – how it can be there for support while also generating membership at the youngest of levels. For example:

• Create apps for kids to practice financial skills through games and make them available on tablets in branches.
• Engage in pretend play by offering activities for young children such as coin-sorting.
• Create an education system within your branch where young children can find a safe and encouraging place to learn about finances.

This also presents a great way to connect with some of your millennial members on a different level. Millennials may still want to use their mobile devices to do their own banking, but you can connect with those who have children by offering kid-friendly financial education when they’re in the branch.

The future of the branch really relies on the credit union’s strategy, location and membership. Our industry will never take services away from our communities – especially those consumers who are underserved. However, how we interact with them in the branch will change. The number of in-branch transactions will decrease as they continue to move to other channels, but members still need in-person direction and guidance that only credit unions can provide.

I know my confidence increases when I drive by one of my credit union’s branches, just by knowing it is there and supporting our community. In fact, I now plan to make more frequent trips to the branch to keep tabs on the progress!

Joel Hartzler is Stewardship & Development Director for Filene Research Institute. He can be reached at 515-229-9458.