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Branch Transformation: Meeting Members Needs No Matter Where or When

Updated: May 24, 2023

by Darren Smith | Originally published by CUInsight


Opinions on the importance of branches vary throughout the industry. But every credit union can agree that traditional branches are expensive – and growing more costly every year.


The past year and a half have brought especially sharp increases in operational expenses, primarily due to labor shortages and severe inflation. The costs of obtaining and retaining employees have risen significantly. Similarly, prices for equipment, software, parts, and labor have scaled upward.


Then, of course, there are the always-present risks of in-person banking. Even with under-counter cash recyclers and automated teller cash handling, trips to the vault create opportunities for human error. And desperate consumers continue to put tellers in additional danger, with around 85 percent of financial institution crime committed through in-person robberies.

To add insult to injury, fewer people are making daily excursions to the branch. For the sake of convenience, a vast majority of consumers are using their mobile phones or home computers to bank. Mobile application use for financial services has hit an all-time high. Over 65 percent of US consumers use digital banking services as their primary way to handle basic financial needs. So, it’s hardly surprising that overall foot traffic has dropped somewhere around 35%.


Yet, oddly enough, Americans still demand access to branches. Very few consumers (36%) actually prefer their mobile banking applications to in-person banking. Even those claiming mobile-only status admit to stopping into their local institution. Some of them even visit once a week. Many admit they would stop more often if their credit union had extended banking hours. So, how can credit unions save money while still meeting the branch demands of their members? Branch transformation may be the answer.


The Case for Self-Service

Over the past three years, self-service technology has become something of a norm, especially for Millennials and Gen Z. Post-COVID, a quarter of these younger generations report ATMs or Interactive Teller Machines (ITMs) as a preferred way to open a new account. Similarly, consumers under the age of 40 note ATM network access as a primary consideration when seeking a new financial institution.


With so many younger consumers comfortable with using technology for their banking services, it’s hardly surprising to hear financial experts touting the benefits of self-service technology for branches. And many financial service providers specialize in ATM outsourcing programs, that offer the hardware, service, and management of self-service technology, that not only lower the cost for credit unions but also meet the needs of their members.


Today, branch technology such as ITMs, deposit automation ATMs, cash recyclers, and smart safes are reshaping the operations, availability, and capabilities of credit union branches. Together, these machines managed by the right partner can provide the same services as traditional tellers, allowing branch staff to focus more on providing financial advice and selling higher-value services.


Using these innovative machines is allowing credit unions to get creative with their branch innovation, too. Some institutions are saving on real estate by building smaller, more intimate branch spaces. Others are combining a small office location and digital teller technology to create mini branches – and placing them in already well-established and convenient retail or partner locations or shrinking branches all together.


Transforming Branches with Technology and Innovation

Credit union staff members are an integral part of the experience members expect. However, current employment numbers are doing much more than creating issues with keeping branch locations well-staffed. Large-scale employment also means more members are at work during standard branch hours, making visits to their institution far less convenient.


Longer hours of operation is one way to make sure branches are available for even the busiest members. While this would be difficult with traditional branches, locations that leverage self-service technology can offer more in-depth functionality and availability without overtaxing current employee resources.

But extending open times is not the only way to meet the needs of members. In many cases, the real issue is not that members don’t want to visit a branch but that previously high-performing locations may no longer be in a convenient location.


Credit unions with mobile applications can utilize locator data provided either through their mobile application tracking or through searches made on their app’s locator feature. This information can help credit unions determine where and when members are looking for branch access. The data then becomes critical in directing how the institution implements its branch transformation strategy.


Condensing Down to Grow Right

The needs of credit union members are always changing. But the past three years have been especially jam-packed with change. However, self-service technologies are providing opportunities for institutions to both shrink their operational footprint and continue to maintain or grow their community presence.


A traditional branch building is a comfortable go-to solution and while some institution leadership may choose to maintain the status quo, leveraging self-service innovations is quickly becoming an essential piece of how today’s consumer banks.


No matter what your opinion of branch transformation may be, the right service partner can help your institution make the best use of technology to reduce costs, solve staffing issues, and attract younger members while still providing branch visitors with the human interaction they have come to expect.



 

Lean How Partnering with ATM USA Can Benefit Your Financial Institution

Darren Smith, Vice President, ATM Management


Craig Helmers, Vice President, ATM Management

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