Will Mobile Replace Branches?


By Ray Birch

ST. PETERSBURG, Fla.—Mobile is here to stay, meaning branches are on their way out, correct? Not correct, suggest several analysts, who say such a conclusion is flawed.

As part of a CUToday.info special report, “Credit Unions 20/20,” which offers numerous viewpoints, strategies and more for building a successful path to 2020, experts are offering their own insights on the future of branches, including how brick-and-mortar locations are evolving.

“Mobile payments are here to stay, and data indicates that mobile technology will continue to grow and play an increasing role in the financial services industry,” said PSCU President and CEO Chuck Fagan.

Fagan is among those who believe mobile will replace physical branches are coming to a conclusion that will be bad for credit unions.

“To the contrary, credit unions must continue evolving and reestablishing their branches as being the center of the member experience, as they are essential for sustainability, relevance and competitiveness,” he said.

Don't Believe Predictions

Fagan Charles

Chuck Fagan

Markt, president, Credit Union Solutions at Fiserv in Brookfield, Wis., also does not believe some of the forecasts he’s seen predicting a rapid decline in the number of bank and credit union branches.

“I feel that a more likely scenario—excluding the top four banks in the country—will be a modest decline in the number of branches over the next five to seven years,” he said. “Credit union members will continue to use branches, but the reasons for doing so will shift far more heavily toward sales and service rather than for transacting. The implications of this are that credit unions will need to retool their respective branch footprints—and retrain staff—to be less about transacting and more about interacting.”

But CUNA Senior Economist Perc Pineda believes concerns over the future of CU branches are “legitimate,” adding that rapidly advancing technology and branches both will have their place.

“Credit unions continue to serve the financial services needs of their members, leveraging technology for operational efficiency, and at the same time enhancing their presence in their communities through their branches,” said Pineda. 

Mergers Play Role

Ben La Macchia, VP of planning and real estate at La Macchia Group, Milwaukee, thinks talk of branches dying is “overblown.”


The media portrays the reduction in number as being a direct correlation to the industry’s overall health,” said La Macchia. “While it’s true that the overall number of branches has declined in the last five years, much of that has been due to mergers and acquisitions on the bank side where overlapping service areas have been removed.”

Nevertheless, La Macchia said the number of branches will continue to decline as the country converts to a paperless economy. 

“However, the amount of business being transacted at braches is actually increasing, it’s just being done differently,” he said. “Instead, it appears that the nature of branches are changing, becoming more and more informational and member interaction centers versus transaction centers. Nonetheless, the physical location remains the number-one source for organic new member growth for nearly all credit unions.”

Miriam de Dios also cautions CUs not to be “misled” by the movement toward mobile, moving too far away from bricks and mortar.

“All trends pointing toward an increase in mobile delivery of services are true,” said the CEO of Coopera, Des Moines, Iowa. “However, I do not believe the traditional branch or personalized service will die out completely. There will remain consumer segments that want personal service, and it would not surprise me to see more of that as people experience frustration with technology and security breaches threaten personal information, security and privacy. Like any business that seeks to grow and thrive, diversification of products and income streams is inevitable.”

Branches Key To What CUs Deliver

Fouch Robert

Robert Fouch

Robert Fouch, president and CEO of Corporate Central CU in Muskego, Wis., believes branches are critical to the future of credit unions because they are at the heart of what CUs deliver to members—personal service.

“The demise of local branches is overstated,” said Fouch. “Brick and mortar touch points will continue to make a significant contributions to the success and steady growth of credit unions. I believe there will always be a need for a community-minded branch in most neighborhoods.”

Fouch acknowledged there may not always be a steady stream of daily traffic coming in and out of the office, but there will always be a need. 

“Even though I rarely visit a brick and mortar structure, this aspect of the credit union industry will always play an important role in the delivery process,” he said. “When we look each other in the eye, when we shake hands, when we quietly listen and share a knowing smile – these things are an important part of the human connection.”

Mobile is hear to stay, meaning branches are on their way out, correct? Not correct, suggest several analysts, who say such a conclusion is flawed.

Section: Standard
Word Count: 1123
Copyright Holder: CUToday.info
Copyright Year: 2019
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URL: http://www.cutoday.info/THE-feature/Will-Mobile-Replace-Branches