MADISON, Wis. (4/8/13)--Economics, technology and changing consumer behavior are changing the look, feel and function of the credit union branch, according to a new white paper from the CUNA Technology Council and the CUNA Operations, Sales & Service Council.
The paper, "Is Technology Causing Branches to Close but Service to Thrive," includes interviews of credit union professionals and analysts and an examination of relevant research.
Among the conclusions the paper makes:
- The branch is not going away, but it is evolving from processing basic transactions to a venue for problem solving, handling complicated transactions, as well as acting as an educational, sales and service center.
- The branch is a focal point and educational center for small business lending, which is built on relationships, not transactions.
- Consumers want human interaction along with technology in their financial services.
- Declining fee income and margins, as well as regulatory pressures and increasing costs, will cause a rethinking of the business model and branch development.
- The economics of alternatives to building a branch are compelling--it costs an estimated $1 million to $2 million to build a branch with five to eight employees, at a cost of $350,000 to $400,000 annually to operate.
- Branch expenses tend to be higher than alternative channel costs. Existing members, though, often use more services with the addition of online channels.
- Online members are more actively engaged with the credit union and cost more to serve than those who aren't.
To access the paper, use the link.