While Surfing Channels, Don’t Forget that Which is Primary

By Michael Downs, Vice President of Marketing, Momentum

In a world where access to products and services is just a keystroke or swipe of the iPad away, there is undoubtedly a fundamental shift in how members are choosing to engage with credit unions. The growing number of banking options available to members in our “multi-channel” environment continues to be the driving force behind lower branch transaction volumes and downward pressure on branch profitability.  In response, financial institutions are wrestling with strategies that will enable them to leverage the power of these new channels to improve service, strengthen brand loyalty, and increase revenue.  And in doing so, they are being forced to address difficult decisions about the future of their legacy retail branches.  In the end, “surfing” these channels for the most integrated and profitable delivery platform can easily become overwhelming for credit unions leaders.

As the utilization of online and mobile channels rises, it has become fashionable to denounce the retail branch as a viable channel for the future.  But, branches are not going away.  In fact, institutions that fail to adequately focus on the important role of the retail branch could likely suffer. The fact remains, in the eyes of consumers, branches still remain the banking channel of choice for opening a primary checking account.  In its triennial Survey of Consumer Finances, the Federal Reserve Board asks consumers to cite “the most important reason for choosing their current institution for their main checking account”.  In the most recent edition, 46% of consumers cited “location of their offices” as the primary determinant.   In addition, a 2011 Gallup study confirmed that the primary driver of customer loyalty and engagement remains the branch and call center.

In maintaining their position as the primary channel, there are four likely themes that will continue to evolve over the next several years; 1 – branch redesign to help members better navigate the space, 2 – engagement of members in new ways through operating models and staffing changes that improve service, 3 – enhanced technology to improve the member experience and increase efficiency, and 4 – better connection with the community and the member to create greater brand loyalty.

So, how do credit unions maximize the efficiencies of newer delivery channels without losing focus on the member engagement afforded by the retail branch?  The solution will require a well-crafted and balanced channel strategy, and certainly won’t happen by abandoning branches in favor of direct channels.  Below are five suggestions:

  • Balance the relationship.  Focus branches on enhancing the member experience so that they can serve as the foundation for future transactions.  Part of this involves redesigning branches as destinations and educational centers that focus on relationships rather than simply transactions.
  • Sell to an audience of “one” – Identify different member segments and their needs, and then emphasize the channels that speak directly to them.  One channel cannot adequately meet the needs of every member.
  • Make it easier for members to buy.  Try to make channels work together and separately, while improving overall revenue opportunity.
  • Champion the members’ values – Develop a community and wider social agenda.  Explore the opportunity to utilize branch space in ways that support community events and social causes.
  • Enhance the brand – Integrate brand management across the channels to create a different member experience.

While, the role of the branch has forever changed, it will continue to be an integral part of a credit unions’ delivery strategy. Therefore, organizations that can leverage the branches’ ability to engage members on a more personal level and offer a unique experience, while also integrating alternative delivery channels, will position themselves for multi-channel success.

Michael Downs

Michael Downs

Michael Downs is the Vice President of Client Solutions at Momentum, a strategic design-build partner that takes a people centric approach to helping credit unions across the nation thrive. Web: www.momentumbuilds.com Details