Battle Of The Branches: 4 Strategies From The Credit Union Industry

Credit unions are adjusting their branch strategies to better address member needs and maximize brick-and-mortar interactions.

 
 

Decades of technological progress have replaced a host of physical interactions with clicks, scrolls, dials, and voice commands. But in all this technological revolution, why is the branch — one of the longest standing icons of the financial industry outside of currency itself — still around?

The Current Branch Environment

Since 2005, 30% of credit unions have opened at least one net new branch, according to Callahan & Associates’ Peer-To-Peer software. Nearly two-thirds (65%) have not gained or lost any branches and just 5% had fewer branches in 2012 than they did in 2005. Of the credit unions that gained branches, the average institution added two new location. For credit unions that closed branches, on average they lost just one. This has led to an overall net increase in the number of credit union branches. Since the first quarter of 2005, the number of branches nationwide has increased by 8.9%.

Credit unions have opened 394 new branches since the first quarter of 2011, bringing the total number of credit union branches nationwide to 21,406. As recently as 2008, credit unions were opening more than 1,000 new branches each year.

The average credit union did not gain or lose any branches over the last year. The number of branches opened varied in different regions of the country. The Central region opened the most with 131, while the Mid-Atlantic came in last with only 33 new branches opened in the past 12 months.

Transitioning For Tomorrow

Some experts have predicted the eventual demise of the branch, a notion which quickly became self-fulfilling in some circles. The heavyweight Bank of America has acknowledged it could eventually cut its footprint by as much as 10%, according to ABC News, and others are likely tempted to follow a similar path.

For credit unions that still see a majority of their business walk in through the front door, this flurry of anti-branch sentiments may distress leadership and rattle the board’s confidence. But with the right mentality and a few strategic shifts, credit unions can create modern branches that are better outfitted for success and profitability than ever before.

This Battle of the Branches feature package highlights four examples of credit unions that are either building more or building wiser, as they bring the next generation of brick-and-mortar into the limelight. The branch is dead. Long live the branch.

 

 

 

Oct. 15, 2012


Comments

 
 
 

No comments have been posted yet. Be the first one.