Is the credit union branch becoming redundant in a digital world?

If in the past it was large buildings and rows of tellers that attracted members inside credit union branches, these days customers are looking for different experiences. Credit...

If in the past it was large buildings and rows of tellers that attracted members inside credit union branches, these days customers are looking for different experiences. Credit unions across the world are now exploring new branch models to respond to the needs of their customers.

In a special breakout session, delegates at the World Credit Union Conference in Belfast heard from Terence Roche, co-founder of Cornerstone Advisors, who discussed the role of the branch as part of a multichannel delivery strategy.

“As we think about branch configuration, let’s keep in mind the environment in which they operate right now,” he said. Mr Roche explained how the next step for credit unions would be to determine the skills employees will need and what technology the branch is going to have.

Full coverage from the 2016 World Credit Union Conference

Credit unions in the USA or Canada have not reduced their branches, but what has declined is the average branch size. New branches also tend to be designed to enhance members’ experiences rather than focusing on volume. Some credit unions also aim to differentiate themselves through colours, visuals, new designs and modern looks.

A second area that needs to be taken into account when designing new branches is, according to Mr Roche, education. This could mean a specially assigned space where members can learn how to use models or sign up for payment systems.

Connecting is also important, said Mr Roche, and some credit unions are achieving this through private offices for consultation and waiting areas with TVs and videos. New branches also include a transaction area although members can go to traditional tellers if they prefer.

Credit unions: where do we go from here?

One example could be CUA, Australia’s largest credit union, which has developed a new concept of a “branch of the future”. Mr Roche explained how the credit union had adopted a customer-centred design principle.

CUA branch in Carindale [photo: CUA]
CUA branch in Carindale [photo: CUA]
The branch features a specially-designed and built Personal Needs profile that staff can use on their iPads, as well as a Touch Board (46” interactive Heumi table) for customers to play, learn, explore and transact.

Members can also receive support from a service team of ‘roaming concierges’ ready to help or point them towards a self-service zone. Private meeting spaces are also available, while a photo wall holds 1,200 photos of customers taken and printed on-the-spot in the branch.

LAFCU, a credit union from Michigan, USA, is using interactive cash machines for people who need help, meaning that members do not have to leave the machines to talk to somebody or get a receipt. Adopting these new technologies requires a lot of staff time showing members how they work. In a digital world branch staff members will have to become channel experts, able to help members with mobile applications or online banking, as well as teller transactions.

“If servicing transactions go multichannel, if members live multichannel, if transactions become multichannel, your branch staff will have to be in the middle of all. You’re going to see a different skill set in branches,” explained Mr Roche, adding that branch employees could also be involved in engaging with members on social media.

He added that the branch’s role in sales is also likely to change as members access different channels.

“It is pretty early in the game to know how this is going to work or evolve. But the trend is of smaller branches with different configurations,” he concluded.

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