SEATTLE—More credit unions are learning that any changes in branch design and technology must be backed by strong data that show the adjustments will bring value to the membership, says one design/build firm.
“I think our clients are getting much more comfortable with the idea of branch transformation and the fact that they will need to continuously respond to changing market demands to deliver meaningful in-branch experiences,” said Mark Alguard, senior director of strategic services for Momentum. “I believe they will be much more focused on research and data to better understand what gives their members value, and they’ll use this insight to support more seamless integration between their digital and physical delivery channels. A key component to this will be their continued recruitment and development of team members who can effectively execute these complex strategies.”
Alguard said that many of the branch “transformations” that have happened in recent years have focused on adding technology. While that will still occur, he said, the focus will be on how the tech brings value to the member and therefore the CU.
“Conversations around omni-channel delivery and in-branch technology integration have been happening for a pretty long time. The shift we detect is away from looking at branch transformation as simply adding technology self-service points to the buffet, or placing a more modern skin on the retail environment that is reminiscent of the mobile app,” he said. “The focus has really moved towards discovering what creates the most value for members and what helps members connect better with the credit union.”
Fintech Fear fading
Alguard said that credit unions’ fear of fintech is fading, which is helping them embrace some of the approaches used by the startups.
“I think that a lot of credit union leaders have backed away from the cliff when it comes to contemplating fintechs and the fear that they will devour their businesses in a way similar to Uber’s take of market share from the taxi industry,” Alguard said. “Instead, they’re starting to incorporate a couple of key fintech strategies into their own playbooks. They are getting really clear on what adds value for their members in their omni-channel experience, and they are better leveraging outside resources to help them move more quickly to develop better user experience platforms.”
All of this is coming at the same time credit unions have also become more focused on branch redesigns, said Alguard.
“I have noticed our credit union clients being more selective in the initiatives they take on, and I’ve also noticed them narrow their focus in the branch down to those items that are most likely to work for them in securing new business,” Alguard said. “Perhaps I am more aware of how powerful this laser type of focus can be, because it’s an approach we are using in our business, as well. For us it’s a matter of maturing beyond business development work that seems—especially in hindsight—like a frenetic cacophony of marketing activities to more consistent efforts at relationship building and thought leadership.”
Alguard added that the rush to add technology to branches is being accompanied by awareness that the investment must pay off in member engagement.
“I think our credit union partners have been inundated with so many new technologies and marketing channels, potential ways to connect with members, that they have learned to sort through the opportunities and information and ultimately better qualify the initiatives they take on in their organizations and in their branches,” he said. “Five years ago, for example, many credit unions wanted to have large-format marketing touch-screen technology in their branches, and while few were able to make a compelling case for investing in them, many were installed. Most of those touch screens have been retired because they didn’t help the credit unions better connect with their members. In this past year, it’s become much more apparent that the credit union leadership I work with has gotten better at sifting through the opportunities in their branches and committing their attention to what is actually the most important thing for them – doing things like investing in modern CRM platforms to deliver seamless and relevant advice or updating their environments to be more relevant and help them connect with their members in a more tangible way.”
Retaining Talented Staff
More attention, too, is being paid to branch staff and retaining good talent, Alguard said.
“Credit unions have come to realize, as they shift their branch focus to more consultative environments, and as their staff inevitably take on more diverse roles, that the profile of the staff they need to operate these branches has changed quite a bit,” he said. “They have also noticed that the work required to bring business into the branch is often a very external activity, and it’s one that not every otherwise capable employee is well suited for. This means that credit unions are having to work harder to recruit and retain the talent they must have for their business to maintain a market advantage.”
Alguard said that the credit unions he sees paying close attention to the threat of team member attrition understand how to make themselves stand out as employers of choice above large national banks that often deliver larger compensation packages.
“From our viewpoint, CUs are now broadening the way they look at their facilities from strictly member experience centers, to buildings that support better work and more engaged employees,” he said. “It’s a nuanced, but meaningful difference – a somewhat inside out approach where a strong culture supports a healthier and more engaged team, and that team therefore delivers better experiences to members. The workforce credit unions are trying to recruit understands the difference between working for an organization that is making investments in their employee experience, and ones that are more focused on bottom-line metrics.”