While demand for digital banking continues to grow across generations, branches are alive, according to Raddon. The company’s 2022 Delivery and Payments study found that 86% of millennials reported using a branch or drive-thru, while 76% of Generation Z and 80% of millennials conduct in-person branch transactions each month.

“The demand for online banking has remained a game-changer and transformed the way many of us manage our finances,” according to Becky Summers, who leads thought leadership and strategic guidance at Raddon. “But the need for in-person branches persists, and surprisingly is becoming quite popular among younger generations. Regardless of the digital prowess of these younger consumers, the data shows that for navigating complex financial needs, the guidance of in-person experts within brick-and-mortar branches remains a high priority.”

Summers suggests credit unions navigate the dueling priorities by defining a network strategy, developing a roadmap, and leveraging an integrated delivery system that combines a high-tech and high-touch plan.

“Start with a focused approach to discover opportunities within the market you are serving, and understand the impact of your current branch network,” she says. “Research and an increased knowledge of your current locations within their markets will provide a way to develop the overall strategy and roadmap for the future. Next, layer that onto the mobile and online banking usage from your accountholders.

“Overall, be focused and have a roadmap for your future.”

High-touch branches

The credit union roadmap has always included branches. However, their look, functions, and accessibility have evolved over the years.

Raddon found that Gen Z and millennials are more likely to perceive the branch’s primary role to be account opening or a source of financial advice. Conversely, baby boomers view branches as a place to conduct transactions.

Therefore, credit unions seeking to maintain high-touch branches must offer more than routine transactions. If young people want financial education, for example, provide that alongside more traditional services.

High-tech platforms

That said, younger people aren’t satisfied solely by high-touch branches. Raddon reports that 98% of Gen Z used mobile banking in 2022.

This isn’t unique to young people. From 2016 to 2022, millennials’ use of mobile banking rose from 71% to 96%, Generation X from 44% to 79%, baby boomers from 30% to 59%, and traditionalists from 10% to 31%.

Easy-to-use online and mobile banking platforms are essential, while digital wallets and person-to-person payments have become part of life for many consumers. When using those services, consumers seek frictionless security logins and ease of use.

“Be sure your institution is easy to do business with across your digital platforms,” Summers says. “Consumers do not want to ‘figure it out’ based on the products they have. The user experience should not disincentivize usage of your payments or mobile channels.”

Credit unions should first determine what members want, and then set goals and objectives for becoming high-tech and high-touch institutions, she says. During that process, Summers suggests credit unions:

• Determine necessary branch network roles and investments. Set goals for potential expansions while also considering conducting performance assessments on current branches.
• Consider how members currently use delivery channels, potential growth of member segments that will lead to increased use, and the appeal of new channels and delivery.
• Ensure all considerations fit into an optimization strategy and roadmap.

“While many consumers utilize mobile banking at high rates, they’re still using in-person branches as well for advanced service needs and typical daily transactions,” she says. “Hence the high-tech, high-touch approach.”