News of the Death of the Branch Is (Not So) Greatly Exaggerated

Large nationwide or regional financial institutions across the country have been reassessing the role of their brick-and-mortar branches for years, and even more so since the coronavirus pandemic hit in 2020. And for many, it’s been deemed that many branches have simply got to go.

Wells Fargo announced in October its plans to shut down eight more branches across six states. That makes 749 physical locations the leading national bank plans to shed since the start of its initiative this past July.

Chief amongst the reasons for these closures are cutting costs and aligning services to the post-pandemic customer’s behavior and all-time high demand for mobile banking.

So far, credit unions have been slower to cut branch locations than banks, as many have member bases that include small businesses, seniors and comparatively low-income households that may have less access to broadband.

Is the Death of the Branch a Moot Point for Credit Unions?

While most credit unions’ strategies are understandably more community-driven than that of their banking counterparts, it’s not just industry giants that are scaling back on their physical footprints.

Credit unions have been facing the same pressures as regional and community banks due to the pandemic: Fewer members are visiting branches and more are adopting mobile technologies. As they continue to evolve and compete for market share, striking the balance between face-to-face service and digital banking is key.

And for many American consumers, being able to meet banking needs from mobile devices has become a staple expectation. A recent survey by Morning Consult on behalf of the American Bankers Association showed that mobile banking use increased by an additional 11% since March 2020.

This isn’t a surprise, but it shows the staying power of mobile banking – and how it important it is for credit union to not just merely “have” mobile banking, but ensure that it’s offering the full functionality their members expect.

How Servicing Mobile-Minded Consumers Unlocks Efficiency for Branch Staff Too

Reports of the death of the branch may be exaggerated, but there’s a much bigger question to focus on for credit unions: How can they unlock business efficiency so vital to their long-term future while serving their members in the ways they actually need it? Intrinsic to this is the ability to make consumer-facing processes mobile-friendly.

Allowing members to complete the majority of day-to-day processes via their smartphone is also critical in order for credit unions to reduce administrative burden and overhead to their workforce,  both at the branch and call center, and to improve efficiency and cut costs.

To do so, credit unions need to eliminate the barriers that clog up the time of both employees and members alike through efficiency-killing and redundant processes that serve neither.

3 Obstacles Denying Credit Unions Complete Mobile Digital Banking Journeys

In their aim to improve efficiency and member service, credit unions have invested in developing web pages, portals and mobile apps. Still, mobile banking processes are failing both members and employees. Here are three reasons why:

1. Digital silos: A patchwork of solutions that’s no solution at all

Using several siloed endpoint technologies that are not integrated to cobble together your member experiences only adds more steps and demands more effort from both members and employees, whether it’s for ID verification, completing and digitally signing forms, or providing required documents needed to apply for a loan. Disconnected software leaves vital gaps that needlessly prolong and delay completion and slow sales for credit unions.

2. Outdated legacy processes equal high-effort member interactions

Siloed digital systems used by credit unions today are also heavily dependent on manual and paper-heavy legacy processes, such as PDF-based forms and agreements that are often lengthy and difficult to understand. According to a recent Lightico study, 62.5% of consumers have been asked to print, sign and email papers during an online transaction in the past six months. Routinely they contact the call center or branch because they:

• Can’t clearly read or understand the details of a PDF form or Terms and Conditions document that they must sign, or supporting documents they’re required to provide to process an application or request;
• Must print these documents out and once they’re ready to complete them, have to look for printers, fax machines and scanners just to simply get these documents back to their credit union; or
• Need to verify their ID and undergo authentication processes that the credit union’s mobile app can’t cover digitally, leaving no other option than to email copies of identification back to the contact center or paying a visit to the branch.

These high-effort interactions are not only frustrating, they fall short of the standard members expect today – digital-only alternatives to complete their needs.

3. Frustrated and less productive employees cost credit unions in overhead and turnover

Members’ effort and friction also spills over to credit union employees in the form of significantly increased overhead costs. Call centers are flooded with mundane member issues that should be do-it-yourself. Branch staff wastes time fielding complaints, while expending time and effort dealing with the paper and admin work resulting from these broken journeys. That slows down productivity, ramps up frustration and damages employee job satisfaction, leading to increased turnover costs for credit unions.

Guiding Members to the Finish Line With One Seamless Mobile Journey

On one hand, human interaction is still vital to accelerating credit union processes while delighting members. On the other, the shift to mobile banking is here to stay and will likely supplant almost all other banking channels as the years go by.

Digital and mobile banking and face-to-face assistance at the branch do not have to be mutually exclusive: Credit unions can benefit from both with digital completion capabilities that help agents guide a member through every step needed to open accounts, apply for new loans or modify existing ones.

If credit unions can free themselves from the costs imposed by low-value administrative tasks and paper, they can reinvest their human capital into developing higher-value member interactions.

Zviki Ben Ishay is the CEO of Lightico, a provider of a digital customer interaction platform based in New York City.