The Branch of the Future
by Brian Nutt, Codigo
Today’s branch environment is quickly moving to a more interactive, immersive space designed to invite member communication with not only Credit Union employees but also the Credit Union brand. This in itself has broad appeal in our industry at the moment, but seems to be poorly defined. Is the Branch of the Future another trendy catch phrase that will be forgotten in a year like so many past fads?
According to an article written by BAI in May of 2012 entitled “Investing in the Branch of the Future”, the dialogue being held today remains focused on the same topics from a decade ago. That topic was, and remains to be, how to make the branch as efficient as possible in a rapidly changing business environment. There is no denying that margins are being squeezed, customer foot traffic in the branch is declining, and the regulatory environment is increasing. But there is also little information to dispute the consensus #1 factor influencing a consumer’s decision as to where they bank. That continues to be their proximity to the nearest branch.
10 years ago we heard the same story – branches are going away. Interestingly, it was the technology of the day driving the conversation then as it is now. In the early part of the 2000’s, telephone banking, the internet, and ATM proliferation were the culprits to blame for customers not visiting the branch. Now it is a smart device that allows members to complete nearly every product transaction desired with the simplicity of downloading an app from iTunes.
Today, unlike 10 years ago, marketers are forced to consider how they can influence the brand perception of an institution when their most likely brand touch point is via a device. Clearly the convenience of being able to access bank account information is appealing as transactions have sky rocketed from 9 per month to 30 per month since the introduction of mobile banking. This simplicity and frequency dictates that when members do visit the branch, they experience the same transactional convenience and speed yet augmented with a high level of care from a branch employee. In an odd way, branches now yield more power than ever before. When a member visits the branch, the opportunity to deliver stellar service, engaging technology, and local knowledge has never been more poignant. To miss the mark will surely turn a branch into little more than a very expensive billboard.
One Credit Union making great strides to mitigate this risk is Grow Financial of Tampa, FL. Grow has implemented a unique blend of technology in their newest branch by partnering with a company called In Window Outdoor to create a dynamic display that is presented on an exterior window and allows passersby to play games, get information on Grow and interact with products while affording Grow the ability to create an impression much less traditional than the mainstream bank. This use of technology has accomplished its goal (at least initially) of attracting attention and delivering a positive interaction with the Grow brand. But this payoff does not come cheap. The latest technology available usually requires a deep pocket book and this project was no different.
A more affordable approach to the new branch seems to be a move to putting branches in retail locations such as grocery stores , strip centers, and other venues where the footprint is smaller, foot traffic is inherently higher and, if done right, technology can play a large role in delivering a fantastic consumer experience. Through the use of interactive kiosks for dissemination of product information, collection of member information, and general services that have traditionally been reserved to the teller, financial institutions can drive down headcount costs per location without losing service level. Other technology such as Personal Teller Machines pick up where the Kiosk may have left off and put members face to face with tellers in a virtual environment so all of their needs can be met with a personal touch.
The leap to this service model will not happen overnight but it is certainly being considered by many institutions right now. The “Branch of the Future” is almost here in some fashion or another. It is now up to each Credit Union to define their most efficient path to branching and on what time table. Part of the challenge will be placing bets on the right technology for the job while not getting distracted by the latest innovation that holds promise of great things but yields little in real world results.
In the end, it is up to each institution to define, craft, and implement their unique vision of the next phase of profitable branching. Hopefully it will follow along a trajectory of utilizing technology that is practical, scalable, and manageable. If that happens, we are embarking on the next great phase of our industry.
