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Bank Branches Are Dead: Long Live Call Centers

A Snarketing post by Ron Shevlin, Director of Research at Cornerstone Advisors

There have been a rash of articles and blog posts lately about the decline in branch traffic that banks and credit unions have experienced over the past few years (you don’t really need me to find those articles for you, do you?).

Mostly they come from BranchesAreDeadophiles who love to tell us how branches are dead, and how the future of banking is all digital (wait…am I one of those people? I can never remember).

All this talk of branch traffic got me wondering what was going on in the call centers. Lucky for me, I’ve got data from a recent survey of 480 credit union executives to shed some light on the matter.


Across the sample, the average number of inbound call center calls per member increased from 3.98 in 2011 to 4.05 in 2012. Basically, no change.

But that shouldn’t have been the case. Online banking adoption among credit union members increased four percentage points, and mobile banking adoption nearly doubled in 2012 from 2011 levels.


The average washes over the distribution in changes, of course. And that’s an important part of the story: 52% of credit unions reported a decrease in calls per member, 9% reported no change, and 39% reported an increase.

Who’s going up and who’s going down? Credit union size and online and mobile banking adoption help tell the story.


Larger credit unions were a lot more likely than smaller ones to experience a decline in call center calls per member in 2012 (you might like to know that the sample was evenly split across size categories):

                     Calls per member 2012 versus 2011
                        Number of creditunion members
          <10k     10k-25k     25k-50k     50k-100k     >100k
Decrease   41%       32%          53%         60%         67%
No change  12%       18%           3%          7%          9%
Increase   47%       50%          44%         33%         24%

Two-thirds of credit unions with more than 100k members saw their calls per member volume decrease, in contrast to just 41% of credit unions with less than 10k members.

But credit unions of different sizes are coming from different starting points. In general, the smaller the credit union, the more inbound calls per member:

                          Inbound calls per member
                       Number of credit union members
              <10k    10k-25k     25k-50k     50k-100k     >100k
2012          8.10      3.65        4.09        3.94        2.36
2011          7.68      3.57        4.07        3.96        2.39


What are larger credit unions doing that smaller ones aren’t? Two things:

1) Driving online and mobile channel adoption. Credit unions with less than 10k members average 34% online banking adoption and 10% mobile banking adoption. Those between 10k and 100k have online banking adoption in the mid-40s and mobile banking adoption in the mid-teens. The largest credit unions are at 50%+ online banking adoption and 20%+ mobile banking adoption.

2) Right-channeling. Adoption isn’t the only factor influencing inbound calls per member, however. The credit unions that are driving calls out of the call center are those that build the right functionality and then market the capabilities to their member base. This isn’t a “build it and they will come” kind of thing.


There are two flip sides to this analysis, however. 

First, having fewer inbound calls per member might not be a good thing. Sure, it keeps costs down. But meaningful interactions with members are good thing, no? 

The smaller credit unions are talking to their members (through the call center) twice a quarter. The larger ones are talking to them twice a year. 

Second, mobile banking adoption may actually be keeping calls per member from sinking. With the rapid penetration of smartphones, it’s increasingly easy for consumers to find the number of their credit union when they’re out and about, make that phone call, and have access to their account information (through mobile banking) in order to have a meaningful conversation with a service rep. In the past, the member might just have waited til s/he got home to make the call. 


So while the BranchesAreDeadophiles are scattering the ashes of dead branches, it looks like call centers still have some life in them.

Ron ShevlinRon Shevlin is Director of Research at Cornerstone Advisors. Get a copy of his best-selling book, Smarter Bank: Why Money Management is More Important Than Money Movement. And don't forget to follow him on Twitter at @rshevlin.

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  1. The most recent ABA study of channel utilization covered in my recent Bank Marketing Strategy blog post ( confirms your assertion that while online and mobile traffic is increasing, phone banking is also increasing as a percentage of transactions (from 4% in 2008 to 9% this year). Interestingly, this trend of higher phone banking is true for young and old alike.

    As all studies show, not only is the percentage of transactions increasing for call centers, but this comes at a time when transactions overall are increasing mirroring what happened when ATMs were introduced. In other words, displacement of transactions isn’t matching initial projections. Consumers are using their smartphones and computers to stay more in touch with their accounts, checking balances, transferring funds and paying bills more frequently using fingertips as opposed to footsteps.

    With the cost of a call center engagement being more expensive than most other channels, banks and credit unions have the choice of either aggressively discouraging call center interactions or better leveraging these interactions for sales discussions. Second only to face to face engagement, call centers provide the opportunity to leverage all demographic, transaction and behavioral data to grow relationships.

    The question is . . . will financial firms embrace this engagement opportunity.

  2. I am agree with you.I also had little bad experience with the bank i feel that call centers are playing good job than the them

  3. Jenni Palocsik @verintjenni says:

    While I don’t share the opinion that branches are dead, recent discussions with banks have reinforced my perspective that both contact centers and branches are facing similar challenges. They must evolve in response to the changing behaviors of customers as more adopt self-service and digital channels.

    For routine transactions, banks are encouraging this self-service approach in order to save costs, but need to maintain high levels of efficiency – and customer experience. Successful financial institutions will be those that transform their contact center and branch channels in such a way that they optimize resources to reduce idle time, and maximize sales effectiveness.

    Customers will continue to turn to both of these channels when they have problems, as well as for more complex financial services needs. And in order to balance the high expense of having branches at convenient locations for customers, the distribution, format and size of these physical locations will likely be dramatically different over time.

    At the end of the day, it’s not about the volume of the transactions (calls or visits), but the quality. I agree that the number of interactions may be fewer in some areas, but the nature of each of them becomes even more important.

  4. Because I’m not smart enough to formulate my own reply, I’m going to cite HBS’s Dennis Campbell from a report that Ron will release in the future. Think about that for a second.

    “My own research has shown that customer adoption of apparently “low cost” delivery channels can alter their behavior in ways that paradoxically lead to increases in the overall cost-structure of financial organizations as demand grows for access across all channels – both in terms of actual usage as well as desire for the option to use multiple service delivery channels when needed. However, this research also shows that access to additional delivery channels like online and mobile banking can increase both customer retention and customer satisfaction. In light of these findings, the data Shevlin shares in this report is an encouraging sign that the credit union sector focus using these channels to improve the member experience is well directed.”

    In short, customers treat financial services like they treat the newspaper. They used to read it once a day. But now that they can read it four times per day in different places and through different devices, the do that too. Same goes with retail banking. They don’t just replace one contact point with another. When it’s easy to do so, they consume more.

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