Bank Branches Are Dead: Long Live Call Centers

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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.

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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.

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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.

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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

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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.

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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. 

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

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