Branch Transformation Comes Down to Cooperation

From decades-old financial institutions to digital-native firms born on the internet, brands across industries are rethinking what it means to provide a truly great experience. Even as the economics of retail lend themselves to digital delivery, market leaders have identified in-person moments as an effective method for capturing consumer love and loyalty. It’s among the likely reasons Amazon has boldly entered the grocery arena with hundreds of Whole Foods locations, not to mention Amazon Go cashierless grocery stores.

While the rest of the retail world is coming back around to the idea that in-person engagement is critical, the credit union industry has largely remained steadfast in its commitment to providing the best in human-centric, face-to-face interaction for its member owners. Yet, operating physical branches is becoming increasingly difficult and costly, especially as credit unions face competitive pressure to transform them in tech-forward ways, integrating technologies like digital self-service, cashless ATMs and virtual tellers.

That pressure is born mainly from the idea that technology is the way to the modern member’s heart. But, that’s not necessarily true for all segments of a credit union’s membership base.

Many older consumers, for instance, like the comforts of a teller window and a human being who will see their transaction through from start to finish. While some of this is due simply to an appreciation for tradition, there are other factors at play. Not least among those is growing boomer trepidation around financial fraud and identity theft. Seniors, who comprise a high-value segment for any financial institution, non-profit or otherwise, continue to be primary targets of fraudsters, and many have already experienced the pains of financial abuse.

This is not to say older members will never engage with their credit unions via digital channels or that younger members don’t also appreciate branch access. In fact, we know the opposite to be true in both circumstances. The key is to evolve to become a financial institution that flawlessly delivers a seamless, secure omnichannel experience – one that allows members of any age and preference set to transact whenever and however they want. Bonus points for allowing them to safely hop back and forth between branch and mobile, online and branch, ATM and mobile as they see fit.

A recent Deloitte survey underscored the emerging value consumers place on the ability to engage with their credit union or bank in multiple ways. Seven in 10 respondents considered having a consistent omnichannel experience as important or very important when selecting a primary financial institution, according to “Recognizing the Value of Bank Branches in a Digital World,” a February 2019 report from The Deloitte Center for Financial Services.

Credit unions may not realize it, but they have a massive leg up in the race to excellence around secure, cross-channel engagement. Exclusive to the credit union movement, the shared branch network that today includes more than 5,700 branch locations is the bedrock of an evolving financial services ecosystem that places a high value on in-person interactions but also enables tech-forward transactions.

Shared branches make it possible for members of one credit union to perform a range of transactions inside the branch of another. Loan payments, money orders, cash and check deposits, withdrawals, moving funds between accounts, checking balances and recent account activity – all of that can be done in person at any shared branch-participating credit union across all 50 states.

What’s more, the flexible infrastructure that powers shared branching is facilitating the development of an entirely new set of digital transactions for members. Because digital and physical transactions are processed through a single network, translating them across devices and channels for that seamless, secure experience members demand is that much easier. So is developing a more authentic, 360-degree view of members, something that is essential to meaningful and ongoing digital transformation.

Beyond offering consumers a wide array of digital and in-person financial services, the industry’s shared branch network continues to forge a cooperative stand against fraudsters. CO-OP Financial Services, which operates CO-OP Shared Branch, is investing in data-driven technologies like COOPER, an advanced data-driven platform designed to detect and fight fraud, to consistently strengthen the network. In February 2019, CO-OP launched COOPER Fraud Analyzer on the CO-OP Shared Branch network. Moving forward, CO-OP is using COOPER Fraud Analyzer to offer real-time transaction denials and create fraud risk profiles.

The rapid development and democratization of digital technologies – from robotics to contactless payments – has changed what many consumers consider to be a great in-person experience. Regardless of where they fall on the incumbent-to-disruptor spectrum, retail companies of all kinds are evolving their physical locations to wow customers in ways they now demand. As they do, however, they face an entirely new set of infosec and cybersecurity threats that if realized may do irreparable harm to the trust consumers of all generations place with them.

Credit unions face the same challenges. Banded together, however, they are in a much better position to give members the tools and spaces they want with the security and protection they need.

Dr. Kathy Snider is Engage Solution Line Owner for CO-OP Financial Services. She can be reached at kathy.snider@coop.org.