A Harbinger Of Branches To Come

GFA pioneers a new branch model designed to shift the emphasis from transactions to sales.


A decade ago, the grand opening of a tellerless branch on April Fools’ Day might have been viewed as a hoax, but the new banking model simply reflects a business reality at GFA Federal Credit Union ($421.0M, Gardner, MA), where members conduct roughly 86% of their transactions electronically.

“GFA members just aren’t walking into branches as much as they used to,” says Linda Carmichael, senior vice president for member resources and technology. “And when they do, they’re looking for information.”

That change in member behavior led GFA to rethink the branch concept at its ninth, newest location in Leominster, MA, which opened this year. Dubbed a “futuristic branch” by a local newspaper, the new model is noteworthy for not only how it functions today but also how it plans to incorporate emerging technology in the future.

“We are laying the foundation for what we expect future branches to look like,” Carmichael says. At the same time, the new branch concept also helps advance the goals of a rebranding effort launched last year to promote the credit union’s full menu of financial services.

Automation With A Personal Touch

The Leominster branch has no teller windows, teller lines, cash drawers, or vaults. Instead, it has four separate counters spread loosely around an open area off of which are three glass-walled spaces for private consultation. Employees greet members as they walk into the branch and inquire about the visit’s purpose. Employees then either serve the member at a counter or direct the member to one of the offices for further assistance from the employee or a senior staff member. This method of spreading business around to offices or counters keeps customer lines from forming.

The counters are equipped with a computer, eSigning devices, and a cash-recycling machine that two employees can use simultaneously. The machine is housed beneath the counter and serves as a teller's ATM for cash transactions, both deposits and withdrawals, rendering cash drawers and vaults obsolete. And instead of requiring a teller to count money two or three times for accuracy, the machine counts and efficiently dispenses bills and coins in any denominations a member requests. Meanwhile, the employee is free to learn more about the member and recommend other financial services that GFA offers.

Both the layout and technology allow employees to work at any counter or machine, a design that encourages efficient service.

“With a traditional teller window, the teller is assigned a cash drawer that only that person has access to, but anyone can step up and work with that recycler,” Carmichael says. “It’s not assigned to a specific employee.”

Like most credit unions, GFA has been shrinking its retail space, and at approximately 2,700 square feet, the Leominster branch is comparable in size to other leaner branches the credit union has opened in recent years. But the new banking model uses the floor space more efficiently. By replacing teller windows with counters, those workstations can handle multiple functions, from cash transactions to loan applications, even new accounts. 

A Shift Toward Sales

In one sense, the Leominster branch is just the physical environment supporting the flexible staffing strategies many credit unions have embarked upon. Although GFA lacks universal employees, it has replaced the traditional teller with member service associates who are trained to handle a broader repertoire of services, including loan applications. The branch is staffed with three or four associates, an assistant manager, and manager.

The Leominster locale will test additional technologies that, if successful, the credit union will incorporate at other branches. For instance, GFA plans to introduce tablets to its employees at the Leominster branch first but is working on the infrastructure for securing the data. Eventually, the new branch will feature video-conferencing for consultations that require a staff member with certain expertise.

“When a member wants to speak with a commercial lender, we don’t need to have that staff person in the building,” Carmichael says. “We can use video-conferencing at any time without the member having to make an appointment or visit another branch.”

Most importantly, the new model supports a shift in the branch’s role from handling transactions to driving sales of the credit union’s other services. In GFA’s case, that new role works in tandem with its rebranding campaign. GFA’s new slogan is “welcome to better banking.” The new brand highlights the credit union’s four categories of financial services — personal banking, business banking, investments, and insurance — designating each one with a separate color and icon. Every branch, not just Leominster, has been made over with the new brand colors and a feature wall of four images that represent GFA's full menu of services, which member associates are trained to discuss. The new brand, like the new branch, “is designed to show that we offer a full suite of solutions for all of life’s changing events,” says GFA’s marketing director Lisa Lastella. 




Aug. 5, 2013


  • Interesting post. Branches are long overdue some new thinking. Years ago I recall the credit union industry rallying around the "high tech, high touch" concept. Well folks, the future has arrived. This industry has not done a super job of managing and leveraging data. We need to change that. We also need to understand how data generated online, such as through online banking or Personal Financial Management (PFM), can be brought in to call center and brand environments. Advocacy can be practiced and not simply preached.
    Bryan Clagett
  • SAFE Credit Union is also considering how to build the branch of the future. Our teller line today produces a lot of referrals and we value our interaction with members. We assume that when members come to the branch they have opted for face to face transactions. We have toured other credit unions that installed kiosks or video tellers. At one credit union we found that when members ask for coins they are sent down the road to a shared branch. That would not meet our standard of member sevice. We think that we will replace our teller cash dispense (TCD) machines with cash recyclers and retain our teller windows. We have many reasons for doing that. We provide servcies to over 1,500 small busineses who buy coin and cash from us. They will need teller windows. We want to continue talking with our members who want face to face deposits and withdrawals because we generate a lot referrals. Our elderly members don't like to use machines and many of them cannot manage the transaction on their own. They hold most of our deposits. In our visits with vendors and credit unions we have found that the video kiosk doesn't save us any time or money. It still takes one teller per window. The other reason for keeping the teller line is that we live in a high crime world. We have bandit barriers at all of our branches. Before we installed them, we had six robberies in one year. We have seen other local banks move from teller windows to open floor plans. The idea was always that robbers don't rob cash machines. Most of the robberies in our area occur where tellers are not behind bandit barriers. We agree that members will do fewer transactions and that the business in the branch will shift to the platform. But we have had such high member growth that our teller transactions at our branches have not declined. Members do fewer teller transactions, but our membership growth has offset that trend. How much longer that will continue we don't know
    Henry Wirz
  • Mr. Wirz, I read your comments on future branches with interest. I suggest you look at the website for Branch Development Group, www.BranchDevelopmentGroup.com . The branches being discussed in the article are exactly what they do and they have been doing it for many years. They already know the pitfalls and mistakes others who are just waking up to this branch concept will make. They have proven branch formats that can be adapted for your specific needs. You are correct, branches need to change with the changing marketplace but using the same designers as old paradigm branches will never work well. Give them a look and contact them for more information!
    Robert Vinnacombe
  • Congratulations to GFA on their branch. We have been working with our clients for 10 years to create unique branches tailored to the specific needs of each credit union’s culture, business purpose, markets, and members. All of these elements are different so therefore each credit union’s branches need to be uniquely created. In this case, one size doesn't fit all. The branch is not going away, but it is definitely changing and needs to a primary point of education and sales for every credit union’s products and services. The branch should compliment and enhance the many service delivery channels available for member service. We believe face-to-face member service in the branch is the best method of differentiating your credit union in the financial market place.
    Mike Colvin
  • Interesting concept--- the tellerless electronic branch was something commercial banks had tried too soon and were unsuccessfully in the past. Today's CU membership is becoming more technologically savvy and wants the quickest and purposeful service at our locations, instant gratification so to speak. If we all could set up the branch to be quick in and out and use the brief moment of member contact to cross-sell the CU's related and personalized product every CU would be growing to meet the future needs of our memebership