SEATTLE-Is the branch dead? It clearly is not, says Mark Weber, who points to the record number of building projects and branch redesigns his firm has taken on in the past four years.
But there is a "huge shift" in many aspects of the branch, he added.
"There is a realization by financial institutions that they cannot just let their branch network sit there and hope it gets better," said Weber, president of Weber Marketing Group, which works mainly with credit unions, but also some banks in the U.S. and Canada. "The branch network has to be optimized, which starts with where it is located, how big it is and what types of markets should be pursued with brick-and-mortar. We are getting a lot of calls on long-range branching plans."
Certainly technology has led to a number of changes in branch functionality, Weber continued. He said one shift is from branch retail and merchandising, with a focus on credit unions selling more products, to a branch built for conversations. A second shift is a move away from history, as Weber noted the bulk of branches are "caught in the past" because they are designed on a 30-year-old model.
"The new focus is on integrating more technology and getting away from the importance of teller transactions, which are declining," he said. "The mobile channel does not equate to the death of the branch-far from it. We are living in a multi-channel world that has not kept pace with advancements."
A third shift Weber sees is brand experience. This involves making the branch something completely different and unique that allows a CU to stand out.
"Instead of retailing and merchandising, the emphasis is on creating a rich, integrated, well-orchestrated brand experience," he explained. "Design is a huge component as the new emphasis is on offering advice through conversation, rather than cashing a check."
Four Irreplaceable Channels
Weber said several of the largest national studies in recent months, including those from Raddon, Celent, Cisco and the Pew Trust, all suggest one similar concept-the branch remains the main channel for acquiring new members, for cross-selling, for problem resolution and advice.
"There is not an online channel that people are going to substitute for any of those four areas," he declared. "It goes beyond wanting human contact; people want help and they use the branch to find it."
One of the biggest shifts Weber has observed is the term "convenience" is being expressed not just by branch convenience but also online and mobile access. This is a "huge" shift, he insisted, as for years people thought of "convenience" as limited only to the proximity of a branch to where they live or work.
"Online banking has been around for several years, but mobile banking has added to the definition of convenience," he said. "It is an addition, and it is changing fast."
What should concern CU leaders, Weber advised, is the need for a clear, multi-channel strategy. He said management at all CUs need to examine every branch they have and shift them from the traditional transactional model they have been designed for to the new environment that includes greater technology and a need for advice.
"People can get cash just about anywhere now, which means the branch is redefined," he said. "The right-sized branch with the right staff and the right business model is going to have a place in the future."
Need For Advice
Part of this equation, Weber noted, is a shift due to the regulatory environment. Thanks to Durbin, and the fact CUs are making money in different ways today, he said credit unions need new sources of income.
"The branch has become the place to get advice on a mortgage, investments or running a small business," he said. "Those are trust-based decisions, and that is where the branch shines."
For example, in the 1990s there was an era of self-directed investing. For a while, Weber recalled, "everybody and his brother" could make money on investing.
"Now there are credit union members wanting help in this critical area," he observed. "But walking into the average credit union branch people would not know those services are offered."
Weber Marketing has worked with some of the largest technology-focused credit unions in the country, including OnPoint, Addison Avenue, BECU and others, and the common thread is all have been building branches while they have been adding technology, said Weber.
"The important concept is not building large branches built around traditional teller counters. Instead, highly efficient, functional, tech-savvy branches that are designed to impact relationships."
Weber said his firm just finished working with Vancity Credit Union in Vancouver, B.C., the largest CU in Canada. He said the goal was helping Vancity take its vision of the future and desire to be a strong cooperative, with Weber Marketing designing a prototype branch that expresses this vision.
"Two branches will be opened in November, and I think they will be the most distinctive credit union branches in the world," he said. "They will express the heart and soul of being a credit union, in a very unique way. It won't be because of the design alone, it will be because Vancity did a complete cross-functional engagement to redefine the branch of the future-not just from the credit union's perspective but from the members' perspective."
Branch Usage Still Strong
According to Weber, the new Vancity branches are evidence the death of the branch has been greatly exaggerated.
"No matter how much the technology consultants in the industry want to say the branch is dead, they will have to let 50% of the North American population know that because that significant portion of the population is still using the branch regularly."