What makes a branch relevant in a digital world
This story is the latest installment in Credit Union Journal’s ongoing special report on strategic planning, which will run throughout the month of July.
Branches are far from dead, and some credit unions are including special touches in these spaces to establish a connection with their members.
Financial institutions have been closing branches in recent years. Foot traffic to physical locations has declined as consumers complete more transactions online and through mobile devices.
That means as credit unions head into strategic planning season, executives should be thinking about how their remaining branches can evolve and stay relevant in an increasingly digital world, experts said. The most forward-thinking CUs have made sure their branches are eye-catching with prominent branding elements.
“The branch needs to foster an emotional connection with the credit union,” said Bob Meara, senior analyst in Celent’s banking group. “The branch’s role used to be about processing large numbers of transactions efficiently, but now it is about cultivating relationships, and oh by the way transact efficiently, which is why there has been investment in self-service.”
Creating an inviting space
People go to a branch for a few reasons, such as applying for a loan, closing an account, seeking financial advice, making a deposit and reporting a problem, said Jeff Winter, senior vice president with the design and build firm NewGround. Further, many of these folks start the journey to a branch in a digital channel, and only opt for an in-person visit because they need assistance.
“The branch still has significant value, but the management of why people go in and how they interact with the institution is different,” Winter said. “We believe financial institutions have to create a journey and an experience that is meaningful for members [and] customers.”
Branches need to be warm and welcoming and reflect the credit union’s culture, Winter added.
City & County Credit Union in St. Paul, Minn., is one institution that has embraced this approach. The $895 million-asset credit union, which partnered with NewGround, has renovated four branches and incorporated a lot of glass, color and lighting to make the retail spaces pop. The institution is targeting young families so management wants the environment to be attractive to that demographic, said Megan Primeau, vice president of marketing.
It also built its Shoreview location as a billboard in 2015, Primeau said. That building is backlit with pink at night, a nod to the color used in the credit union’s logo.
“We looked into how to angle the front of the building to draw people in,” Primeau said. “It has a lit up ‘hello’ sign that invites people in to the space.”
As the concept was being developed in 2014, City & County’s management team looked at all the retail spaces around the spot where the branch would go, including Target, Trader Joe’s and Five Guys.
“We knew we were competing not just with the Wells Fargo across the street, but every other nearby retailer,” Primeau said.
Digital touches in branches
Credit unions should make greater use of technology in their branches, from putting tablets in the hands of front-line staff to taking advantage of workforce management and optimization solutions, Celent’s Meara said.
“Desktop computers were a great invention, but with tablets they are not needed any longer. The staff needs access to analytics so they can make the right offers,” he said. “Use digital appointment booking that allows members to choose to meet with a specific staff person. This allows the credit union to know who is coming in, when and what subject will be discussed.”
Pioneer Federal Credit Union in Mountain Home, Idaho, has incorporated new technology into three of its 13 branches by augmenting live staff with a video platform. The $499 million-asset credit union first developed its use of video as a mobile video platform that allowed members to open new accounts and perform some basic transactions, said Tracey Miller, senior vice president of branch operations.
The video platform has been so well received by members, Pioneer FCU plans to install it in the rest of its branches in the future, Miller said.
“If someone comes in during the lunch hour, the video desk gives us flexibility to offer members a later appointment or immediate service with a video teller,” Miller said. “This allows us to have a mortgage specialist or a business specialist available in every branch without actually having to staff a person in every branch. With the low unemployment level, it is difficult to have a mortgage expert in every branch.”
Winter of NewGround said executives should be asking themselves whether they value branches. If yes, they need to adapt to the new “vibrant” environment. The investment can be reasonable or a significant, he added.
For CUs looking to grow, the options include building a ground-up branch, leasing space and buying a bank branch.
“Credit unions only have a 7% market share, so there are opportunities in cases where banks have overbranched in some areas,” Winter said.
Primeau of City & County said her advice for credit unions is to take a hard look at their branch presence during strategic planning.
“Do not be content; do not be afraid to try different purposes for your branches to fit your retail strategy,” she said. “Is your branch doing what you want it to do? If so, will it still be working five years from now?”