In 2013 many credit unions will continue a growing trend by transitioning from larger, more traditional branches to smaller, more efficient locations.
Typically this transformation is being driven by one of two strategic reasons:
* Converting branch space initially dedicated to teller services and re-allocating it towards financial planning services such as portfolio review; income, tax and estate planning; asset protection; IRA rollovers and other services.
* Expanding the retail footprint through mini-branches and in-store branches to boost accessibility to members while reducing the expense level associated with maintaining traditional brick-and-mortar locations.
As the industry's shift to smaller branch environments continues, the challenge for credit unions becomes how to retain, or improve upon, the member service experience in these new environments. The change to "faster and smaller" is not as simple as it may seem however, and credit unions must be thoughtful in their approach to smaller branch operations in order to maximize efficiencies without sacrificing overall member service.
Strategy Considerations
To this end, there are several considerations for credit unions as they implement smaller branch strategies:
* Device consolidation. Next-generation teller devices are undergoing functional consolidation, similar to the revolution in personal and workgroup printing during the past decade. Today, multi-function devices allow credit unions to do more with less as these peripherals are capable of high-volume scanning, improved image quality and CAR rates for items scanned, and interfacing easily with other teller devices to save on power and connectivity costs.
Another benefit of multi-functionality is ID capture and fraud prevention. Previously, institutions needed to deploy dedicated devices-an expensive proposition-for ID-associated activities such as new-member enrollment, member authentication, and check cashing. Now these capabilities can be deployed as part of an integrated solution, saving on money, space and time.
As credit unions refresh and re-fit branches to meet the new "small-window" paradigm, maximizing service at the traditional teller window with multifunction devices will become increasingly necessary.
* Transaction compression. When members visit mini- and in-store branches, they do so for convenience and have an expectation that they will be provided with quick and timely service. As with other channels, today's technology can eliminate steps in traditional teller transactions, saving both the member and the teller valuable time.
For instance, because next-generation check scanners offer greater speed, up-time and significant CAR improvements, tellers can accept and process higher-volume deposits in real time for members. This beats deferred deposits and the associated manual effort and errors-errors that often impact the member and their satisfaction level.
Also, by reducing transaction steps and time, transaction compression enables tellers to take on tasks traditionally handled elsewhere in the branch or back office. Institutions are now redeploying more tasks to tellers, maximizing their utilization (which supports the branch P&L) and eliminating back-office infrastructure and labor (cutting hard-dollar costs).
Ultimately, compressing transactions may not directly reduce branch operations costs, but they do support the business case for workflow-improving technology at the teller window by increasing teller productivity and reducing costs elsewhere in the institution.
* Enhanced member knowledge. Credit unions differentiate themselves in the market based on the ability of their staff to know and respond to the personal preferences of each individual member. Leveraging the ID-capture technology discussed above can enable mini- and in-store branch staff to instantly identify a member and also recall and leverage member information, thus providing members with the very best in convenience and value-added transactional service.
Member's expectations of their credit unions will always be evolving. In order to protect existing membership bases and ensure continued growth within their respective communities, credit unions must recognize industry shifts and changes in member preferences and embrace the accompanying evolution of the branch environment.
Glen Fossella is COO with CTS North America and can be reached at g.fossella@ctsna.com.
