Are branches dead?
Two credit union leaders addressed this question during the 2018 CUNA CFO Council Conference Monday in Austin, Texas.
At Mazuma Credit Union in Kansas City, Mo., the branch isn’t dead, but its purpose has changed—and it’s certainly taking up less space.
“Branches are here to create amazing member experiences and to deliver what can’t be done through other channels: that human connection to the organization,” says Deonne Christensen, Mazuma’s chief experience officer and chief operating officer.
In the past, Mazuma’s branches were large—5,000 square feet and up—and had significant staffing (10 to 20 employees) in specialized positions. They were high transaction volume and high-cost centers where technology was a separate stand-alone and competing channel, Christensen says.
Now, branches have 2,000 or less square feet, four to five employees (typically, four relationship advisers and a branch leader), and a lower cost structure. The focus has changed from transactions to advisory services, and technology has been integrated into the branch model. Loan decisions have been centralized.
The benefits of this “high tech, high-touch” strategy, Christensen says, have been:
Rogue Credit Union in Medford, Ore., however, is opening branches “as fast as we can,” says Matt Stephenson, executive vice president/chief operating officer. “We’re expanding our branch footprint substantially while our competitors are doing the opposite. Every time they close a branch we see an influx in members.”
Rogue’s primary strategy is creating member loyalty, he says. “We seek a lot of feedback from members about what they want and how they want it. Growth isn’t our strategy; it’s the result of our focus.”
In recent years, Rogue has experienced annual membership growth ranging from 11% to 18%, Stephenson says.
Typically, members want branches or call centers when they have a problem, and need help to fix it, he adds. Rogue recently expanded its Saturday hours and saw a 56% increase in all types of activity.
And while a lower percentage of members use Rogue branches now compared to 10 years ago (80% vs. 92%), “they still dominate the member experience,” Stephenson says. “That holds true with millennials, too. And their satisfaction is higher, too. The notion that branches are going away is faulty. Eventually, the tide will turn against branches, but we’re not there yet.”
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