Facility Solutions: Closing branches
Planning and preparation ahead of location closures will help ensure member retention—and could even lead to market growth.
Should you close branches to optimize network efficiency and reduce delivery cost? Will closing branches undermine your position as a community-focused credit union? Is your digital banking offering sufficient to retain target members and core deposits? Can you still mine markets for loans without a physical presence?
Twenty years ago, the answers to these questions were similar for most institutions: Branches were the only solution for growth. Today, credit unions can employ multiple strategies to build and retain target relationships by combining virtual and physical delivery. Branches come in many sizes and types today: 150-square-foot micro branches; 800-square-foot express branches; 1,200- to 1,800-square-foot neighborhood branches or lending centers; 2,500- to 3,500-square-foot community branches; smart ATMs and ITMs, and so on.
Branch networks should be analyzed at least every three to five years to understand market changes and to ensure products and services align with your target market segments. This tuning process often uncovers shifts in market dynamics that drive the need to add, close, sell, relocate, downsize or renovate branches to increase productivity and efficiency and deliver the desired member and staff brand experience.
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