MOUNTAIN HOME, IDAHO -- In an effort to remain relevant to its more than 43,000 members, Pioneer Federal Credit Union here has been streamlining and refurbishing its 13 branch locations. The mission: to improve technologies and streamline operations.
"We have built our new branches and remodeled existing branches with teller pods that allow our employees to step out from behind a restrictive teller line and greet the member right as they walk in the door," said Elizabeth Thomas, vice president of marketing at the $384 million credit union.
To eliminate "typical speed bumps" associated with a traditional branch environment, Pioneer FCU also implemented cash recyclers to automate the cash-handling process. Meanwhile, interactive teller machines extended service hours from 7 a.m. to 7 p.m., Monday through Friday.
"We've created many efficiencies and technology-driven processes, but still carefully balanced the best way to continue to deliver 'wow' service for our members," said Thomas.
Other new in-branch technologies Pioneer implemented include touch screen digital boards and electronic community boards, which allow members to submit events and small business members to promote their companies.
BRANCH TODAY, BRANCH TOMORROW
According to Financial Management Solutions Inc.'s 2015 Teller Line Study, average branch teller transactions for banks have declined only 1.9% in the previous five years. For credit unions, the decline was sharper at 12.2%.
But Meredith Deen, president of the Alpharetta, Ga.-based FMSI, said this figure presents more opportunities for CUs than problems.
"When some see branch transactions dropping and the number of branches declining, analysts are quick to predict the end of the branch in the not so distant future," said Deen. "With a deeper understanding of the demographic and socioeconomic backgrounds of your branches' members, it's possible to customize each branch with a specific purpose for your target audience."
Pioneer recently completed a brand new branch, a process that took 13 months. The other retrofitted branches took approximately four months to complete. Thomas explained her team threw out the "what had always been done" concept and fielded feedback from various avenues to develop new models.
"Our branches have a more open, welcoming design than branches of the past," she said. "Our VP of operations visited a credit union that has over 70 ITMs in service to see if it would be a good fit for our new builds. A few members of our executive team visited vendors across the nation that had conceptual builds of different branch design ideas and we took bits and pieces of each of those visits to build a branch that would be the best fit for our brand, our employees and ultimately our members."
BRANCH BEHAVIORS
To be sure, the popularity of mobile and online banking has changed the traditional branch concept. But, credit union executives and industry analysts say branches are still relevant – especially when they are revamped to better cater to member needs.
"FMSI predicts the branch will not only be alive and well in the next 20 years, but will also continue to play a critical role in both securing new account holders and growing wallet share," said Deen.
In Deen's view, the branch model of the future is in three sets. The first is a personalized member experience that features an "upscale" look and feel.
"This branch will be staffed with employees who have higher levels of expertise and more extensive professional backgrounds, all of which likely equates to higher employee costs," she said. "There is branch-activity tracking software in the market that is especially ideal in this type of branch. They track and measure how long each worker speaks with a consumer and their cross-selling efforts, giving managers a better assessment of an employee's revenue production."
Aside from the traditional branch, the industry standard, Deen's next prediction is a self-directed technology model. This concept, she noted, will likely see the most significant growth rates over the next 20 years.
"This model is built to use the least amount of space—an essential consideration in the age of expense-monitoring, when reducing your real estate costs is a top priority," said Deen. "This model also offers the potential for hiring fewer employees."
Whereas Pioneer is concentrating on branch design, it is also literally keeps an eye on mobile offerings. Last May, the CU converted its home banking and mobile banking platform to Digital Insight. As a result, Thomas said there has been a "rapid" adoption of the mobile channel and online banking.
"We're nearing 50% adoption on 90-day active users for our home banking channel and continue to add 300 to 500 new members per month on our mobile app. Over the past six months, we've averaged 40% transaction volume coming through our mobile channels. We just launched the EyeScan ID feature that allows a member to log into their mobile app just by scanning their eyes."
While Deen noted scores of retail businesses that have all-but disappeared in recent years like book stores and music retailers, Credit unions, she said, have a distinct advantage: members need expertise and guidance for their personal finances.
"That's your trump card; think about the best way to create situations for face-to-face interactions between members and the financial-service professionals you already employee," said Deen.
As more CUs weave mobile and branch technology offerings, a new normal will be realized, say industry insiders. Thomas, however, said that members will always need face-to-face interactions when undertaking certain financial transactions.
"I foresee the typical branch footprint getting smaller as time goes on. I feel that consumers still want a physical location nearby but want the flexibility to do their transactions and banking in a manner that is easiest for them and their lifestyle," she said. "Members really want it all in the physical format and the mobile format so that whichever channel they choose, they can complete their banking."
