By Ray Birch
SEATTLE—The branch of the future isn’t necessarily a flashy modern office loaded with technology such as interactive teller machines (ITMs) and video walls, asserts Momentum.
Instead, what’s really needed for CU branching strategies to succeed in the future is a network of diverse branches that are fully customized for the unique markets that each location is serving, the company said.
Mark Alguard, senior director of strategic services for Momentum, a design -build firm that works with financial institution clients, said that in some cases that may indeed mean a “flashy” branch loaded with impressive technology. But he added that many CUs make the mistake of first loading the new branch with high-tech tools, and then go about determining how that technology can best benefit members and the credit union, instead of first determining what tools are really needed.
“It all boils down to using market analysis to choose the best branching strategy,” he said. “While a lot of talk about branches of the future focuses on industry wide trends and cool technology, credit unions should focus on localization and analyzing data. Each market has different people, culture, product demands and projected transaction volumes. If a credit union is expanding into different markets, it’s very important for them to customize the branch to that area.”
For instance, Momentum recently performed a study for a Washington state credit union and used that data to guide the CU’s branching design and strategy.
“It resulted in two simultaneous projects with very different designs,” Alguard said. “For one location, we designed a branch with a ‘Genius Bar’ style ‘tool bench’ to support low transaction volumes and more consultative services. Many of the people in this area use mobile banking, so a teller line wouldn’t be the best use of space.”
Designs for the other office are much different.
“We designed it with teller pods to handle a relatively high transaction volume, and we also put in a tech bar where staff can help members learn more about mobile banking,” said Alguard.
Alguard said there is often a “compulsive awareness” among credit unions that their branches must be better integrated with their technology.
“And while it is true that credit unions need to have their bricks and mortar channels better integrated with their digital delivery channels, that is not akin to just placing technology in the new branch and then saying members now have a virtual experience in their physical locations,” said Alguard. “That does not make a lot of sense, other than to show the credit union is future-thinking and has the latest technology.”
Alguard said what the branch of the future simply is the place where the credit union makes a better, more tangible connection with the membership that showcases new technology, but does so in a way that is objective driven and helps the CU reach its goals.
“Again, driven by the credit union’s overall objectives and the objectives within the specific, local market,” Alguard said.
Alguard addressed the tendency today for credit unions to want to place ITMs in branches since they are popping up in FIs across the country.
“But this can be backward thinking,” he said. “They select the tech to use before they understand why they need to use it. But what they are forgetting is there are a lot of different ways members can be served by technology in a branch, and not necessarily via a kiosk,” Alguard said.
New Tech Not Always More Efficient
If the credit union is looking to reduce staff/member interaction time and avoid members from feeling like they are waiting to be served, members can sit in a comfortable chair with a tablet and browse the CU’s offerings and conduct transactions.
The thinking, too, that adding technology will naturally make the branch more efficient is flawed, added Alguard. He said that careful analysis of branch staffing and how they interact and move around the branch each day and interact with members will deliver the right technology solutions to save time and money.
Alguard said that careful analysis might show that an employee armed with a tablet, connected to all of the credit union’s data systems—which avoids time-consuming logins—can work as well, if not better than the kiosk.
“What if staff had hyper tablets or touch pads,” offered Alguard. “Instead of having six video tellers staff can serve members wherever they are in the branch. Think about how you can save by having more mobile technology for your employees, versus the cost of ITMs. If your objective is efficiency, if you lead with that objective you are free to explore options to achieve greater efficiency—as opposed to choosing the technology and then figuring out how it can make you more efficient.”