CU Data

Lollipops, Dog Biscuits, and the Evolving Branch

Back in the day, everyone was happy visiting the branch—‘even the dog left the CU with his tail wagging.’

June 10, 2014
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I remember visiting the credit union branch as a kid in my hometown.

It was a simple experience where routine business took place with comforting predictability.

I’d walk in with my mom or dad, or sometimes we would drive through. The tellers, often family friends, personalized the service experience with cheerful inquiries as to our health, the status of fun summer plans, or the admiration of a new haircut.

Lollipops for the kids sealed the deal for a positive interaction, and if a dog happened to be in the car at the drive through, he would enjoy a nice biscuit sent through the pneumatic tube.

Everyone was happy—even the dog left the credit union with his tail wagging.

Consumer expectations, however, have changed over time, altered by the advent of technology, an increasingly competitive financial services landscape, and changing consumer needs and service demands.

Research indicates that although in-branch visits have declined, they still remain viable and expected service channels.

Read on to learn about consumer opinions and hopes for branches, and consider how you might accommodate them.

‘I saw a bank that said ’24 Hour Banking,’ but I didn’t have that much time.’—Steven Wright, comedian

“Despite the ubiquity of dot-coms and mobile apps, the traditional bank branch isn’t ready to disappear just yet,” says a new Bankrate survey.

Some 28% of respondents visited a branch (not including ATM use) “within the last week,” while 22% visited in the previous 30 days, and 14% within the previous month.

Although fewer branch interactions occur due to technological conveniences, “there’s no substitute for human contact in some circumstances,” and “There are certain types of interactions that are suited for branches” such as mortgages or investments—transactions that are more complex.

Consumers’ Addiction to Branch Banking Hard to Shake,” corroborates The Financial Brand. Here, results from an MSR Group study reveal “Over 60% of those who prefer using other channels have actually conducted business at a branch in the past two weeks.”

Why do people visit physical branches? For 43%, “this was the quickest, easiest way to complete their task.” Withdrawals and deposits occurred at the branch “because they couldn’t or wouldn’t do it another way.”

There are many reasons “Why Branches Aren’t Dead Yet,” says another article from The Financial Brand. “The purpose and pace driving branch network decisions involves a myriad of complex issues.”

A few of them include:

  • Psychological security. Consumers believe they have ready access to funds through a branch.
  • Service. People like human interaction.
  • Physical instruments of banking. Cards, checks, cash, coins create a “need/desire to use physical facilities.”
  • Lack of trust in technology.
  • Marketing strategy. “Branches are billboards.”

‘They usually have two tellers in my local bank, except when it’s very busy, when they have one.’—Rita Rudner, comedian

Because consumers prefer branches for certain transactions and for specific reasons, what are expectations for the branch of the future? How does technology make an impact at the branch?

“Some time-honored features of the branch may not come along for the ride,” notes American Banker in “Channel Changers.”

PNC Bank of Pennsylvania, for instance, greets customers not with tellers but with “universal bankers” in sometimes high-tech branch environments. These employees are “Sometimes referred to as hybrid sales reps or universal agents. This new breed of employee is cropping up at banks of all sizes.”

Some say tellers will have their place “at branches where transaction volume is high enough.” But “for branches handling fewer than 4,000 transactions and 25 account openings per month, the universal banker model frequently makes more sense.”

“Assisted self-service is the way it will end up fairly quickly,” says a consulting firm representative. “The teller line is gone.”

Branches also will be smaller in the future, according to The New York Times.

 “Customers are not abandoning the branches, but they are looking for different things when they come in.”

JPMorgan, for example, implemented a universal banker concept similar to PNC Bank’s as customers visit kiosks for convenience and “bankers can mingle among customers.”

In addition, JPMorgan is experimenting with biometric devices to help customers access cash. These tools will scan irises and palms, a technique to eliminate the need for debit cards. Such branch devices will further enhance security efforts.

“Beyond the branch experiments, JPMorgan executives… are also developing portable and completely self-contained banking kiosks that can be deployed during emergencies” to dispense cash during branch closures resulting from events such as natural disasters.

The Bank of the Future,” says, will say “hello to smart community hubs where technology takes over.”

Banks are transforming and consolidating technology within the branch, but they are also creating a sense of community.

“Why can’t a bank be more like an art gallery or media space?” asks a creative officer quoted in the article. “People want a bank that feels more like a retailer.”

The article predicts banks will find greater presence in convenience stores or health-care centers, and will do more than provide access to cash. “Technology will allow people to do their own banking by themselves, but people will head to banks to report problems or get loans.”

Finally, an article at suggests there are “two different visions for the branch of the future: speed and efficiency… vs. a deeper engagement with the customer.”

Branches will become sales venues and help centers for complicated services. Unfortunately, as fewer consumers visit branches, chances for personalization and engagement lessen, resulting in fewer service opportunities.

“In the end, financial institutions need to learn lessons from both formats. They need to move more aggressively to implement self-service technology and branch redesign… to improve efficiency and reduce costs… But they also need to create a strategy of customer engagement.”

Your members may not enjoy as many lollipops with reduced branch visits, and their dogs may be deprived of biscuits, but when the tenets of efficiency and engagement are married in branch innovation, everyone will be happy!

LORA BRAY is an information research analyst for CUNA’s economics and statistics department.

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