2022 Branches Defined by Choices, Changes & Video Chats
The Summit FCU's Virtual Branch is a great example of members' increased comfort with digital channels, but physical branches remain important.
Two years ago when the COVID-19 pandemic began and credit unions nationwide closed their branches to comply with shutdown orders, one of the many questions we asked was, is this the beginning of the end for the brick-and-mortar credit union branch? Will this temporary pivot to digital-only banking make consumers realize there’s no need to visit a physical branch, leading credit unions to shut locations permanently and eliminate onsite service positions?
The answer to those questions has been a clear no.
According to NCUA data, in December 2019, there were 22,015 credit union branches operating in the U.S. Fast-forward to December 2020, and that number had fallen to 21,566. In September 2021, the number crept back up to 21,690, and in December of last year, it stood slightly below that at 21,652. While credit unions have shaved a few hundred branches off the industry’s total count during the pandemic, any big changes to branch numbers reported by individual credit unions seemed to be largely the product of mergers, according to an analysis by our reporter Jim DuPlessis.
Still, the forced shift to remote everything has caused consumers to become more comfortable banking via app, desktop browser or video – and caused credit unions to invest more in digital. In-person interaction can now be viewed as one link in a chain of service channels, most of which have become internet-based.
One credit union I spoke with recently that is embracing the concept of remote banking from behind a screen is The Summit Federal Credit Union ($1.2 billion, Rochester, N.Y.). In January 2020, just before Laurie Baker was named president/CEO, The Summit operated 17 branches with no immediate plans to add or eliminate locations. During a planning session in June 2020 – when it was clear that members’ banking behaviors had changed as a result of the pandemic – the credit union crafted a new branch strategy that included closing three underperforming branches, one of which was located inside an office building for a member company whose employees had gone fully remote, Baker explained. The credit union also added a drive-thru window to another existing branch, with more services such as new account openings being performed at its drive-thrus post-pandemic.
With 14 branches left in operation that continued to serve a healthy flow of members, The Summit turned its attention to a new branch without a physical address – the Virtual Branch, which allows members to make an appointment to meet with a relationship specialist via Zoom.
The Summit appointed Cody Seward virtual branch manager in February 2021 and employs three virtual relationship specialists. The specialists take most of the Virtual Branch appointments (Seward also serves as the credit union’s operations manager), and can complete any transaction for a member over Zoom except for wire transfers, money orders, gift card sales and, obviously, cash transactions. For security purposes and to maintain professionalism, specialists take Zoom appointments from The Summit’s corporate offices, but they do have the ability to securely take them from home if the offices are closed due to weather, for example. Members can make an appointment on The Summit’s website, and the credit union also displays QR codes inside its physical branches that members scan for an appointment if, say, there’s a long line in the branch and they decide they’d prefer to go home and meet with a specialist virtually. Appointments can be made just 15 minutes ahead of time depending on availability, and the most common services members meet virtual specialists for are new accounts and new loans, Steward noted.
Since the Virtual Branch opened in July 2021, appointment numbers have continued to rise, with The Summit recording a 50% increase in appointment numbers in December 2021 and January 2022 compared to its opening month.
“There are a few things you can point to throughout the course of the pandemic and go, man, I hope it never goes back to how it was before. You know, we use Instacart a lot more,” Seward said. “[The Virtual Branch] is just so convenient that it’s not something that will be abandoned just because we’re back to face-to-face interaction. We’ve met with people sitting on the bleachers at their kids’ soccer practice. It’s just so convenient to be able to meet with someone on your couch, where you’re also more likely to have all your documents available.”
Baker pointed out that the Virtual Branch allows The Summit to reach new demographics (for example, single parents whose childcare duties might get in the way of physical branch visits) and be more respectful of members’ time. Members can also choose who they meet with when they utilize the Virtual Branch, which they can’t do via the call center channel or without a potential wait in the physical branch, she added.
When asked how credit unions’ brick-and-mortar branches have changed in recent years, Baker listed trends that are becoming more and more visible industry-wide: Reductions in the number of teller transactions taking place in person, less square footage, teller pods instead of teller walls, and the expansion of the branch employee’s role from transaction-oriented teller to universal advisor.
The Summit’s recent moves to invest in video banking, expand drive-thru services and close locations that were dependent on the presence of onsite office employees is just one example of how the industry is adapting its service models to evolving member behaviors. Each credit union’s branch network strategy going forward will look different depending on the specific needs of its membership, but most will view physical branches as one spoke in a wheel of service channels – knowing that members today demand the whole wheel.
“Having a digital presence and a physical presence is very important,” Baker said. “Most members want to see someone face to face if they have an important issue to talk about. Face to face could be virtual or [at a] brick-and-mortar [location], but that’s important to them. And more importantly, they want to know they have the option if they want it or need it. So to me it’s more psychological than anything else.”
And when explaining the importance of offering a combination of digital and physical service channels, she added a disclaimer: That things could change again at any time.
“Everything is changing so rapidly, I’m sure you see that every day,” Baker said. “Who knows where we’ll be in a few years?”
Natasha Chilingerian is Executive Editor for CU Times. She can be reached at nchilingerian@cutimes.com.