Reinvigorate the Branch

Brick and mortar still can be a powerful opportunity to maintain a distinctive brand.

June 17, 2013

Credit unions must think differently about online and mobile banking channels.

And perhaps more important, credit unions must think differently about their ATMs, retail branches, and call centers.

Credit unions no longer can manage self-service channels in isolation or simply think of them as virtual versions of the physical branch.

Online and mobile banking must be holistically integrated into channel and service delivery strategies. And this process should remake the role traditional channels play.

Recent headlines confirm we’ve reached a tipping point in retail banking transaction patterns. Consumer adoption of online and mobile channels continues to increase for a wide range of financial transactions. Large legacy branch networks are becoming a troublesome burden for many.

Banks and thrifts closed more than 2,200 branches in 2012, according to The Wall Street Journal. And the trend is accelerating.

As transactions migrate to online and mobile channels for good, credit unions must decide what new roles their branches and call centers will play within an integrated channel mix.

Read: Will Mobile Demolish the Branch?

Recasting branches and call centers, however, doesn’t necessarily mean reducing their importance. Right-sized branch networks and call centers—smartly integrated with and supporting self-service channels— can be powerful points of human connection.

So, branches have a new-but still-essential role to play for credit unions working to create and maintain a distinctive brand. But, how do you get there?

Start with member, mission, and strategy. Address the following questions carefully to better determine the right role of all your service delivery channels:

  • Who are the consumers your credit union exists to serve?
  • How do you help them solve real problems in their financial lives?
  • Where does your credit union fit within the set of alternative solutions available to your members?
  • How do you stand out?

Next, think about the services you provide from an end-user point of view. Coordinate all major channels to create the optimal service journey for each member. Deliberately design the experience members have when they use your products and services.

The Wall Street Journal recently described Wells Fargo & Co.’s new branch format. It’s half the size of the bank’s current branches and employees use tablet computers to serve customers.

ReadSummit Credit Union Reinvents the Branch as a Dream Destination

Obviously, this format might not be the right fit for your credit union. But it raises an important question: What combination of online, call center, retail, and mobile service delivery capabilities will you orchestrate to better serve your members, gain a greater share of their wallet, and manage the cost of operations?

Am I saying that the growing importance of online and mobile channels has broad implications and that these channels finally have matured to the point where credit unions have no choice but to rethink their operational models and service strategies? Yes, I am.

The challenge for credit union executives today is to design a strategically integrated service experience using the full range of delivery tools available.

It’s a challenge that will require old-fashioned business disciplines like strategic analysis and the careful use of limited resources.

But it also will demand the application of fresher methods like business model innovation and human-centered service experience design.

The most interesting thing about the growth of online and mobile banking might be the opportunity it gives us to repurpose and reinvigorate our decades-old concept of branches and call centers.

JASON OSTERHAGE is senior vice president of lending at Alliant Credit Union in Chicago, and vice chair of the CUNA Lending Council. For more information about CUNA Councils, visit