A longstanding challenge for credit unions has been optimizing their investment in branches. In the not-too-distant past, big banks with their coast-to-coast network of physical locations commanded a clear lead.
Today, the competitive advantage may be swinging more toward buzz-worthy solutions for mobile and online account access, from both traditional financial institutions and new financial technology (fintech) companies.
Still, the financial services industry is a long way from bidding farewell to the branch. So rather than standing pat, it may be time to reinvent person-to-person service with a sales-centric flair.
A white paper from Financial Management Solutions Inc. (FMSI) on the “Top Five Practices Holding Your Branch Back” pinpoints the areas where credit unions can either get by with a traditional service model or get ahead by implementing an innovative approach to personal service tailored to members’ needs and expectations.
Member service focus
According to FMSI’s 2015 Teller Line Study, branch transaction volume has declined 45.3% since 1992, while labor costs per transaction have increased 133.3% over the same period.
Even though there are more cost-effective means of delivering these services, deposits and withdrawals remain the most common transactions, representing the majority of current in-person interactions.
Branches that maintain these services as their primary mission will get by, continuing to serve the dwindling ranks of members who prefer to travel to a branch for even the most routine transactions. But other current and prospective members may look elsewhere for a financial services provider willing to move beyond business as usual.
To get ahead, the focus of service delivery must shift to “higher quality” exchanges. Almost nine in 10 Americans prefer to do at least some of their banking in person, according to the 2015 Consumer Banking Insights survey [PDF], including the prized generation of millennials.
Young adults may rely on their mobile devices for routine transactions. But when they need guidance on the best options to achieve important goals, they want to sit down with a knowledgeable financial advisor in a setting designed to facilitate those conversations.
Branches that emphasize these higher-quality interactions can likely to see significant increases in new accounts and services.
Priorities in hiring and training branch staff should reflect this shift in service delivery. If managers persist in hiring candidates based primarily on prior experience handling financial transactions, they may be looking past potential all-stars who could thrive in a sales-centric environment.
What about prospects with an affinity for sales and a successful track record in retail, hospitality, or real estate?
Well-designed training can prepare these new employees to provide a full range of financial services and guidance, while guiding existing staff to develop a sales mindset.
Members who visit a branch looking for a financial conversation and are greeted by tellers behind a counter likely experience a big gap between their expectations and the credit union’s ability to deliver.
Transforming branches from increasingly inefficient cost centers into a strategic and financial advantage entails employing a systematic approach to blend new technologies, staff training, and architectural design to support sustainable sales-centric service.
Convenient access to self-service technology efficiently delivers basic transactions, freeing up the rest of the branch for comfortable, engaging interactions between members and staff.
When members enter, are they greeted by an office full of idle staffers or forced to wait their turn for the next available harried employee?
Credit unions can rely on software solutions to improve branch efficiency by scheduling the right staff to be on hand when members are most likely to come calling.
Sources of innovation
The ranks of the competition for members’ business has swelled beyond banks to include a host of fintech start-ups. These companies draw their inspiration and ideas for improving financial services delivery not from traditional institutions but from a wide range of industries deploying technology in exciting and engaging ways.
To get ahead of their competitors, credit unions must do the same. Adapting leading-edge service offerings from other business sectors, from hospitality to retail to transportation, provides an opportunity to break out of the confines of traditional branch delivery.
By encouraging both executives and frontline staff to keep a watchful eye out for “wow” service experiences in their daily lives, credit unions can cultivate a collective eye for innovation. These might include:
Credit unions can adapt these examples to improve the member experience and simultaneously increase operational efficiency.
Risk management and regulatory compliance concerns are sometimes touted as reasons to maintain the status quo in branch operations. To the contrary, credit unions can use technology and process improvements to enhance compliance.
Branch design and staff assignment upgrades can simultaneously modernize member service, deploy personnel more cost-effectively, and adhere to regulatory safeguards.
For example, well-trained branch staff are often viewed as the first line of defense in mitigating fraud losses. But it may be worthwhile to design a pilot program to evaluate the rate of fraud related to self-service branch technology vs. in-person transactions.
Another longstanding risk control practice worth revisiting is scheduling at least two employees to open and close branches. By deploying sophisticated security technology and new processes to ensure staff safety, credit unions may be able to safely revise this procedure at low-volume branches, especially those where cash is secured in cash recycling stations.
Credit unions can either move forward to optimize opportunities for sales-centric exchanges in their branches or hold fast—and in doing so continue to absorb the costs of an increasingly irrelevant service delivery channel.
Upgrading branch design and staffing models has the potential to transform member service, increase sales, and rescue the physical presence of credit unions in their communities from obscurity.