If You Build it, Will They Come? The Ever-Evolving Credit Union Branch

This week’s print issue of CU Times is our second-ever to focus on the topic of Branch Evolution, a relevant subject for a time period when opening a brick-and-mortar location is not required to run a successful business. Credit unions are focusing more and more on improving their digital banking offerings in order to compete with other institutions, expand service to members who can’t make it to a physical branch and make all members’ lives more convenient. Meanwhile, according to Callahan & Associates, the number of deposit-taking credit union branches in the U.S. fell by 3.4%, or 646 locations, from mid-2017 to mid-2018 (the most recent available data).

Yet, the process of opening new branches, or remodeling existing ones, still plays a key role in many credit unions’ business strategies, as evidenced by the number of news releases that continue to flow into CU Times staff members’ inboxes on the topic. Here are some examples of new branch announcements I’ve received in the past two months, most of which highlight modern design and advanced technology:

• VyStar Credit Union opened a new branch in Ocala, Fla., on July 10, which features a design that the credit union said “combines a fresh look with enhanced technology intended to increase efficiency and improve member experience.” The Jacksonville, Fla.-based, $8.7 billion cooperative’s new location includes four teller stations, five member service offices, three drive-thru lanes, one drive-up ATM and one walk-up ATM located in a protected vestibule with 24-hour access.
• The $1 billion, Greenbelt, Md.-based Educational Systems Federal Credit Union opened a new branch in Forestville, Md., which it said features “a drive-up ATM, an ATM in the vestibule, teller pods to deliver a personal experience and a free coin machine,” as well as “private offices for members to meet with Member Service Representatives for more in-depth conversations.”
• America First Credit Union’s new, 3,254-square-foot branch in Brigham City, Utah contains six teller stations, a six-lane drive-up (one lane houses an ATM), a coin counter, two loan desks and a “remote expert” office. The Riverdale, Utah-based credit union has $11.2 billion in assets.
• The $744 million LAFCU in Lansing, Mich., opened a new branch in St. Johns, Mich., which features two forms of technology that LAFCU said provide greater service at the branch level – something that will help the CU reach its goal of reducing its geographical footprint of the branch while increasing member service. The two high-tech features are interactive teller machines (ITMs), which combine ATM technology and face-to-face teller interaction via a video screen, and a Smart Office, which “virtually and securely connects members with LAFCU financial specialists located offsite.”
• The $420 million Ascentra Credit Union cut the ribbon in front of a new branch in Bettendorf, Iowa, where it’s also headquartered, on Aug. 26. The four-story structure features “an open concept with collaborative workspaces, fun zones and breathtaking views of the Mississippi River,” and a learning center on the first floor for educational seminars and gatherings. The credit union noted the new branch project brought 30 new jobs to downtown Bettendorf; it plans to add 40 more in the next 10 years.

One thing all of these new branch opening announcements have in common is a clear effort to make visiting the branch an enjoyable experience for members – investing in features that make it a place where members want to be, whether those features are large windows that showcase breathtaking views or high-tech equipment that simplifies banking and produces a wow factor. The idea is that if the branch is appealing, fun and designed in a way that puts the member at ease, they’ll want to spend more time there, which may lead them to use more products and services, and tell people about it, which may lead to new memberships.

At the core of this effort is the transformation of the place members generally head to after walking through the branch’s front doors – the teller line (or wall). This traditional transaction-conducting spot is now thought of as impersonal, old fashioned and formal, and is being replaced with more welcoming formats like teller pods and cash bars.

NewGround, a St. Louis, Mo.-based architecture, design and delivery firm, recently outlined the advantages and disadvantages of common branch transaction systems in an article, “Pods, Cash Bars and Teller Lines: The Battle of Banking Options.” Here’s what it had to say about the two more modern options:

• Pods: Because pods remove the large barrier of the teller wall, members might feel more comfortable approaching employees for help. They’re also conducive to relationship-building, since they’re typically staffed with “universal bankers” who can take members around the branch for a variety of transactions. However, the pods may not offer the level of privacy members expect, and they may feel lost when they enter the branch if there is no greeter or clear path to services.
• Cash bars: A “happy medium” between teller lines and pods, cash bars separate members and staff by a spacious counter and allow for free movement. They also incorporate new cash handling technology, freeing up staff to focus on more advice-oriented transactions. But they still look similar to teller lines and don’t offer the level of privacy that some transactions warrant.

Credit unions have lots of choices when it comes to transforming their branches, and perhaps the more unique and creative the branch is, the better. What their choices come down to is what best fits their targeted membership, whether that’s an old school branch, a one-of-a-kind modern branch or an increased focused on digital. For now, branches are here to stay, and we look forward to observing their continued evolution in the years to come.

Natasha Chilingerian is executive editor for CU Times. She can be reached at nchilingerian@cutimes.com.