Even as consumers express their increased comfort with digital banking, the biggest financial institutions are doubling down on branch network investments. Most recently, Chase secured its place in the record books as the first bank to have branches in all 48 contiguous US states. Between July and August 2021, when many states were still grappling with high COVID-19 infection rates, the country’s largest bank opened consumer banking branches in nine new states.
So, why is this happening? Why are megabanks leaning into physical banking during a time when more people than ever are meeting their financial needs in the digital channel? The answer is both simple and complex. Study after study shows banked consumers prefer a blend of technology and humanity. The caveat – they want to be the ones to choose between a branch, an ATM, an app, a social network or an embedded feature. They do not want the choice to be dictated to them.
Consumer demand for choice is far from new. However, that demand is much easier to satisfy today given so many options for meeting both day-to-day and milestone financial needs. And, consumers are increasingly comfortable stitching together a fragmented set of providers to get their money jobs done. This is why earning primary financial relationships (PFR) with members is getting harder by the day. Yet, credit unions cannot afford to give up the battle for primacy.
Backup for Credit Unions Weighing Experience with Survival
While most industry leaders agree that a highly executable digital transformation strategy is foundational to achieving critical PFR with more members, there is an important proviso to that axiom. Digital transformation can’t be confined to the digital channel. If credit unions are to serve modern members who cherish choice, have diverse needs and want high-touch engagement with their providers, they must pay equal attention to the in-person and virtual experience.
That said, focusing on the brick-and-mortar channel is not always easy, especially for credit unions that are making difficult choices in the name of survival. Cooperatives facing mergers and branch closures, for instance, are right now weighing member experience against sustainability. Every credit union has a segment of its membership that is likely to be disrupted by changes to in-person banking options. The financial wellness of those individuals and families weighs heavily on the minds of credit union leaders.
Fortunately, shared branching, a totally unique innovation of the credit union movement dating back to the late 1960s, provides critical a critical channel extension for credit unions facing these tough decisions. In this regard, shared branching – once thought of as a legacy channel for physical banking – is now seen as an integral component to the digital transformation of the entire industry.
Bracing a Longtime Pillar of the In-Branch Experience
Beyond enhancing individual credit unions’ branch networks, shared branching contributes to the modern member experience in other ways. A combination of open banking-style strategy, digital APIs and secure data sharing enables participating credit unions to provide members with the hyper-personalization they crave. After all, one of longtime pillars of an exceptional in-branch experience is making members feel recognized and appreciated as a contributing member of the credit union.
To cement member loyalty, even in the face of unprecedented competition from fintechs and megabanks, CO-OP Financial Services – operator of CO-OP Shared Branch network – is investing heavily in system and data integration. The company’s goal to provide credit union employees with the crucial member intelligence they need to meet expectations for continuity across all the different lifestyle and life stage moments of a member’s financial life. Simply put, shared branching is the high-touch spoke in the wheel of digital transformation.
The shared branching network infrastructure already helps to make possible digital services to credit unions and members, including access to the Zelle® digital payments network and use of member data by agents of CO-OP Contact Center.
Giving Shared Branching a Second Look
Shared branching is evolving alongside every other mainstay of traditional banking, and therefore, deserves further consideration from growth-minded credit union leaders. The future of banking is digital, but digital does not erase the need for humanity. When done right, technology augments human capabilities, helping us achieve things we never thought possible.
Regardless of where they are at on the digital transformation journey, credit unions may want to pull over and give shared branching another look. They are likely to find that it offers yet another path for moving forward in the quest to earn PFR with more modern members.
Zelle and the Zelle-related marks are wholly owned by Early Warning Services, LLC and are used herein under license.
The original article Why Credit Unions Can’t Forget About Branch Banking can be found on Insight Vault.
