Multitasking Branches

As basic transactions go online, branches are adding movie nights, free Wi-Fi, and kids’ playrooms.

October 1, 2010
future branch
  • More consumers now prefer to perform basic transactions online than by any other method.
  • Branches are trending toward smaller facilities with community ties.
  • Board focus: Consider your CU’s demographics when developing branch strategies.

Ten years from now, members might be more likely to visit your branch for mocha lattes than for money orders. Many branches will look more like community centers than financial centers.

Physical branches aren’t about to disappear, but they’ll have to evolve to remain relevant. Branches of the future will have greeters, cash recyclers, fewer tellers per branch, self-service kiosks, free Wi-Fi, and coffee bars, says Michael Pratt, chief marketing officer for Panini, a Credit Union National Association (CUNA) strategic alliance provider. Panini launched a “branch of the future” international design initiative in 2008.

While these multitasking features already exist in some branches, their adoption will accelerate in the decade ahead, he predicts. 

The change is fueled by a dramatic shift in consumer preferences. For the first time, most consumers prefer to conduct financial transactions online, according to a 2009 survey by the American Bankers Association.

This online preference isn’t exclusive to younger consumers. Online banking is now the preferred banking method for all banking consumers under age 55.

Does this mean the branch of the future will be entirely virtual? Or that the number of staff employed by financial institutions will drop dramatically? Or that the number of branches will decline?

Probably not, according to the Bureau of Labor Statistics (BLS), which predicts employment of tellers will grow about 6% from 2008-2018, while employment of financial service representatives will grow 9% during the same time period.

Consumer preferences are expected to accelerate the demand for sales and service skills among staff. If members do want a financial service from a branch, it probably will be a relatively complex one requiring face-to-face interaction.

“We see a dramatic shift in the role of the personnel involved in the typical branch,” says Pratt. “The role of the branch is shifting from transaction processing to more sales and service, cross-selling, and account and loan origination. Branches are becoming smaller and more embedded in their communities.”

To attract consumers, financial institutions are increasingly opening new branch offices in a variety of locations, such as grocery stores and small retail locations, and keeping their branches open longer during the day and on weekends, according to BLS. Both trends will mean increased demand for 24/7 staffing and part-time workers.

Next: Bring the kids along

Bring the kids along

INOVA Federal Credit Union, Elkhart, Ind., has already adapted its branch design to match changing member preferences. “Five years ago, we started changing the design of our branches to be a little more welcoming,” says Dallas Bergl, president/CEO.

“We want members to stay and do a little more than just a transaction. As transactions are going electronic, we’re trying to keep the relationships going. We get very little time with members these days, so when they’re in the branch we want them to stay awhile.”

Transactions at INOVA Federal match industry trends. “Our teller line transactions have trended down for 10 years, while overall transactions are way up,” says Bergl. Each branch is operating with one less teller, while the number of branches has more than doubled during the past decade.

The $258 million asset credit union has nine branches throughout Indiana, California, and North Carolina. The newest branches feature free premium coffee, free Wi-Fi and Internet stations, and playrooms for children.

The playroom in one of the branches has been particularly popular with members, says Bergl. It includes a TV set, toys, a 100-gallon aquarium, and cartoon cave-style décor. “In the past, I saw kids tugging on their parents, trying to get them out of the building,” he says. Now, it’s the other way around.

Cash recyclers and teller pods

While some credit unions are downsizing their branching footprints, others are enlarging the space they devote to member service.

Healthcare Plus Federal Credit Union, Aberdeen, S.D., recently added on to its main branch at the site of a historic railroad depot. The overall branch size increased from 2,820 square feet to 4,140 square feet. The branch added a concierge teller pod with cash recyclers, free Wi-Fi, a waiting area with free coffee, large TV screens featuring news and credit union information, and safe deposit boxes.

The $35 million asset credit union hired HTG Architects to design the expanded facility. A staffed greeter station sits just inside the front door and helps members find what they’re looking for.

The credit union has no “tellers” per se. Instead, member service representatives (MSR) are trained to handle a wide range of services, such as typical teller transactions, opening individual retirement accounts, and cross-selling services.

Staff at Healthcare Plus Federal have evolved with the times, says Guy Trenhaile, president. “We hire people who are personable and who can communicate and relate to others,” he says. Branch personnel have had to evolve and develop different skills as members’ needs and expectations evolve.

The credit union has no teller drawers, relying on cash recyclers to accept cash, verify authenticity, sort by denomination, and store the cash securely at the point of transaction. Then the recyclers use the same cash to manage withdrawals.

Cash recyclers increase branch security, save members time, and free MSRs to build relationships, cross-sell services, and inquire for higher-level member needs.

The credit union also relies on keyless security. Employees use identity badges to enter the building, and information technology staff use them to gain access to the server room. Fingerprint biometric devices are used for access to the back office, the safe-deposit box area, and the drive-up area.

The credit union added two employees to help staff the enlarged branch. While Trenhaile expects the trend toward online transactions and away from branch transactions to continue, the branch will still serve a purpose.

“The first time a person takes out a loan with us, they need to visit a branch,” he says. “And then we don’t see some people for more than a year.”

When members do visit the branch, he adds, “we don’t like people to have to wait. This new design is a much more cozy, comfortable, and relaxed atmosphere.”

Next: Transition time

Transition time

Branches of the future will be radically different than the transaction-based facilities of the past, experts agree. They’ll have to continually adapt and reinvent themselves to meet members’ needs and demands.

The current challenge is to meet the disparate needs and preferences of different demographics, says Pratt. While all members are moving toward online transactions, generation Y members are less likely to visit a branch than older members.

Among gen Y consumers—the eldest of whom are still several years shy of 30—at least 80% use online banking and 43% plan to use mobile banking within a year, according to Fiserv research. And baby boomers—many of whom are at the cusp of their retirement years—will have an increasing need for human interaction at the branch.

Panini’s Pratt thinks all age groups will continue to demand multiple channels for financial services. As boomers retire, for example, they’ll want the convenience of mobile banking when they travel, but they might prefer to visit the branch for coffee, socializing, or fine-tuning their retirement plans.

Younger members, who tend to naturally gravitate toward the latest transaction technologies, will increasingly visit branches for more complex needs, such as mortgages and business loans.

Meet me at the CU

A greater emphasis on community ties can help pull all generations into the branch, says Pratt. He’s seen credit unions provide community bulletin boards, movie nights, and other member events.

“Credit unions will continue to position branches as social or community centers, which will offer a broader variety of financial services, information resources, and amenities,” says Linda Perconti, director of delivery channel solutions for Diebold Inc., also a CUNA strategic alliance provider. “This positioning will allow for differentiation, and ultimately satisfy member expectations.”

Perconti foresees these trends coming in the next decade:

  • Branches, in general, will have a smaller footprint—just enough square footage to satisfy transaction and interaction demand.
  • Credit unions will focus on serving members by evaluating their needs and optimizing cross-selling opportunities, rather than focusing on transactions.
  • Credit unions will meet members’ mobile lifestyles by deploying a larger number and variety of self-service devices.
  • Overall branch square footage will decrease, but more space will be allocated to sales and consulting. This space will allow experienced staff to sell, generate revenue, and build relationships.
  • Most members wanting to conduct standard transactions will use automated attended teller stations, such as teller pods. This will reduce or eliminate cash handling by staff—instead using recyclers and dispensers, depositories, and image-capture solutions.
  • Drive-thru services will continue to decrease lobby traffic and increase self-service compo­nents for transactions, interactions, and information. 
  • Simpler cash transactions will continue to move to the ATM, while more complicated transactions will be performed at attended teller stations.
  • Personal attention and education will increase, through functional service counters, self-service identification, financial educational areas and seminars, and group and private teleconference capabilities.
  • The branch will serve as a touch point to other channels—including online, mobile, and ATM channels.

Next: Staffing the branch

Staffing the branch

As branches continue to evolve into open gathering places with self-service transactions and a strong sales-and-service focus, staff will need additional training and support. Financial institutions will need
to evaluate and evolve their branch work-force strategies to meet consumers’ changing preferences and the preferences of the labor pool, according to Daryl Demos of Verint Systems.

“To migrate to more flexible work-force staffing, line managers and human resource executives will need to employ more modern perspectives surrounding the structure and nature of their work forces,” Demos says.

“The transition of moving tellers and sales representatives into multifunctional positions that require them to act in a financial advisory role goes hand in hand with training.” Employees will need to be trained across functions and will require advanced skill sets, he adds.

And employees need to be aware of the expectations of members who visit branches. Members will want to interact with knowledgeable credit union representatives to resolve any account issues and to help members plan their financial futures, says Perconti.

“Although many transactions are performed online, some members still prefer the flexibility to visit the branch and engage in face-to-face interactions, such as opening new accounts, getting financial advice, or resolving complex issues,” she adds. “This indicates the need for a more universally trained staff.”



One size does not fit all branching needs, according to the Bank Administration Institute’s Banking Strategiesmagazine. To transition to networks with smaller overall footprints while maintaining the functionality to serve current customer needs, financial institutions will continue to use a variety of branches, including:

• Supercenters (think Wal-Mart Superstores or Bank of America’s “showcase” branch in Charlotte, N.C.). These locations are fully staffed, larger versions of the current traditional branch. They provide information on all retail, commercial, and investment services through a variety of delivery options and technologies.

These are destination centers typically located in the busiest submarkets with substantial consumer and commercial activity.

• Specialized financial centers. These locations might also evolve from traditional branches and focus on serving specific market segments: commercial/small business, private banking and investments, or retail/self-service. They also might be used for introducing and testing new technologies, and might or might not include traditional teller lines.

• Satellite branches. These locations will have smaller footprints (typically less than 1,500 square feet) and might be in-store, converted-mall, or strip-mall facilities.




•  CUNA:


  1. Branch design strategies
  2. Branch staff training
  3. Creating Member Loyalty™ system of training
  4. CUNA Operations, Sales & Service Council

• CUNA Strategic Services alliance providers:

  1. Diebold Inc.
  2. Panini

• HTG Architects