SEATTLE—As credit unions construct new offices, they should make sure physical locations support the digital world, asserts one design and build firm.
“A subject that is top of mind with every credit union executive that we interact with is a branch transformation strategy,” said Robert Saunders, EVP and partner at Momentum. “We are not referring to just design, technology and transaction types, which are important enough issues on their own. We are referring to transforming and transitioning the physical banking environment to support the digital banking environment.”
So things like Touch screens that mimic the mobile app, technology training bars, untethered staff armed with tablets—all reflect the CU’s brand, he said. One of the key goals, added Saunders is to strongly encourage greater use and awareness of digital delivery channels.
Saunders said that CUs certainly need to leverage their physical locations as the “friendly face of the brand,” but if the role of the branch doesn’t serve as a gateway to introducing the membership to convenient, forward-thinking and member-centric banking technologies, its role will be “short-lived and in some cases, the CU will become irrelevant.”
Targeted Growth Strategy
Saunders said that now, more than ever, it’s critical to have a targeted growth strategy that is in alignment with the brand, as well as with market opportunities.
“And applied data analytics will serve to support the branch transformation process,” he said, noting that research and meaningful data guide and validate the decision-making process when building a new branch.
The research that goes into a new branch office does not have to be terribly difficult to collect or complex, he said.
“Research and predictive analytics can include a process as straightforward as collecting household data and member location information, analyzing census tract data, reviewing banking product propensity and competitor data,” said Saunders, adding that the effort can become complex if the CU chooses. “It can get as complex as psychographic segmentation, where the buying habits of the members who most likely will establish productive relationships with your credit union are analyzed. There are large repositories of pertinent information available in the market and one can expect to invest in the range of $15,000 to $50,000, depending on the geographic areas served and the information that one expects to draw from the research.”
When designing a new location, Saunders cautioned that the credit union not overlook how staff performance is impacted by a building and its technology.
“As a credit union grows, the need to retain, train, energize and attract high-performance talent becomes ever so essential to ensuring that meaningful member relationships remain a focus,” said Saunders. “However, sometimes the C-suite doesn’t recognize the fact that the absence of a long-range workplace strategy is limiting the true value of their organization, as the functional design elements of their facilities often impede the effectiveness of their staff in performing their work activities.”
Saunders said it is virtually impossible to predict gains in staff productivity unless the workforce is engaged in repetitive and quantifiable work activities, “such as those found on a production line. An experienced workplace planner and analyst however, can identify, measure and prioritize the benefits and the value of improving design elements in the workplace, such as exposure to natural daylight, access to one’s supervisor, the ability to have impromptu meetings and collaborate with colleagues, etc.”
In any investment in a new branch, ROI should be central in discussions, noted Saunders.
“In terms of branch transformation, predicting ROI has morphed from a simple math equation in terms of tracking deposit and loan growth over time against expenses, to measuring key performance indicators,” he said. “KPIs essentially track individual branch and branch network performance against key business objectives such as market share, member satisfaction, ratio of active vs dormant depositors, member profitably, etc.”