The Financial Brand’s contributor-at-large, Mark Arnold, asked experts from across the bank and credit union industry what they thought about branches. Here’s what 14 experts from around the industry had to say about this one-word question: “Branches?”
By Mark Arnold, President On the Mark Strategies
“The demise of the branch is greatly exaggerated. Branches will evolve from transaction centers to relationship centers where the focus will be loans, deposit account openings and financial advice. A successful financial institution will aim for a premier online and mobile experience paired with strategically placed branches in critical markets. Branch networks will become smaller and more efficient but will remain the community face of banks and credit unions for many years to come.”
Carolyn Jordan, Senior Vice President
Neighborhood Credit Union ($332 million)
“The traditional branch network is no longer needed and needs to be disposed of as quickly and efficiently as possible while the replacement network is built. The replacement network is a digitally based but also includes branches. These new branches will have no resemblance to the decades-old branch.”
David Gerbino, Bank-Focused Digital & Database Marketer
www.dmgerbino.com (formerly with Sterling National Bank)
“The future of branches can be compared to the likes of the amazon.com effect on brick-and-mortar stores. While Amazon has been gaining traction over the last decade, many consumers still choose to visit the stores rather than shop online. Why? Simply because consumers expect a new experience each time they visit a store. If financial institutions don’t offer a new experience for the customers each time they visit a branch, more and more consumers will be less likely to revisit. Branches can drive traffic to their locations by building an engaging environment that customers feel happy to return to time after time.”
Elliott Brown, AVP/Marketing
Farmers Bank ($812 million)
“The credit unions and community banks that begin to shift investments away from physical assets such as branches, to that of digital infrastructure and systems for member acquisition, onboarding and cross-selling, will be far better positioned for future growth in a humanized digital economy. While it may be a mental challenge for some to make this transition, as it is natural to find comfort in the physical realm of things we can see and touch, it is important to not forget the fall of once mighty organizations built upon physical delivery channels such as Blockbuster, Borders and Tower Records to name a few.”
James Robert Lay, CEO
CU Grow
“Instead of a branchless future, banks and credit unions need to embrace a less-branch future, where technology will supplement and complement current brick-and-mortar. The immediate challenge will be how to build a stronger sales strategy since customers are now using digital, mobile and online channels before coming to the branch.”
Jim Marous, SVP/Corporate Development
New Control
“They are still valid. But there are technologies that continue to disrupt the branches. ATMs were supposed to get rid of braches years ago but all it’s done is added a distribution channel. Same thing with home banking and direct deposit. Branches still are a valuable tool in the system. Someone is always going to want to go into a branch (service issue or deepen relationship)..”
John Geary, VP Marketing
Standard Bank & Trust ($2.2 billion)
“There is plenty of justification for both pro- and anti-branch sentiment in today’s business environment. Forcing ourselves to eliminate confirmation bias from muddying the waters, the wisest approach for a bank or credit union executive is to consider the financial institution’s overall strategy. How do your customers/members want to be served? What service channels are you good at? Where those two things intersect is an amazing place to prioritize.”
Matt Davis, Co-Founder
6th Story
“It’s all about where the opportunity is. There is simply more opportunity and a better cost model in the digital channel. When we compare the number of touch points in the digital channel vs. the offline channel for current customers, often it shows that customers interact with their financial institution ten times more on the digital channel. This doesn’t mean that branches will go away. Many prospective customers are still interested in proximity of branches when they select a bank or credit union to bank with – even if they visit the website weekly and only visit a branch once a year.”
Mark Ryan, Chief Analytics Officer
EXTRACTABLE
“Can’t live with them, can’t live without them! Branches are still both necessary and relevant to providing a well-rounded service experience and to achieve sales goals but the traditional model is showing wear and needs to change. New service channels aren’t eliminating branches – just another way to do business. The key is balancing the number and kinds of delivery channels to fit the strategic direction and membership needs.”
Tim McCoy, Vice President Marketing & eCommerce
InTouch Credit Union ($810 million)
“Shift happens. The last ten years have seen big changes in delivery channels. More changes are coming. Be ready to meet consumers where they want to do so. But let’s be careful about jumping on the bandwagon. Pay attention to behavior trends … ignore the bandwagon.”
Shawn Temple, Chief Operating Officer
Bossier FCU ($150 million)
“The branch is evolving faster than ever. As technology allows for increasing numbers of transactions to be handled electronically, the focus of the branch will continue its migration from transactions to sales and service. Wallet share is a key to profitability and the face-to-face experience provides the best platform for cross-sales.”
Jeff Ensweiler, Vice President
Level 5
“Branches are not dead – they are just changing. Branches will continue to serve an important, albeit changed, function. Physical branches tend to inspire greater consumer loyalty than electronic avenues of interaction. A steady percentage of consumers will also continue to enjoy at least the option of walking into a branch and chatting with an employee. Consumer convenience is increasingly defined, however, not by branches but by online accessibility.”
Mark Arnold, President
On The Mark Strategies