CHESTERFIELD, Mo.—The pace of CU branch expansion is picking up as the movement still sees physical locations as key to extending reach, according to one design and build firm.
But within that expansion some trends are also being seen, including reconfigured layouts and even “history walls.”
NewGround reported that is has found that CUs are adding bricks and mortar at a pace that is approaching pre-recession levels, largely due to credit unions wanting to leverage the advantage of personal service that they hold over banks. As expected, the offices are smaller—but not the main flagship branches—said Scott Florini, director of consulting at NewGround, who added many CUs still adhere to the traditional “hub and spoke” network model.
“In most cases we still hear credit unions say they need a physical presence to grow members and accounts,” said Florini. “They see it as imperative to migrate members to mobile and online channels, but they also see the reality that the connection to a community, in an expanding market, is made with the branch.”
Branches Needed In Growing Areas
Understandably, Florini said that this philosophy is seen largely among community chartered credit unions that are in the middle of a big metro area that is growing beyond its current borders.
“Again, many of these credit unions want to distinguish themselves from the large banks,” said Florini.
While the traditional hub and spoke model is still being used by many credit unions, the “spokes” are smaller than in the past, said Florini. These locations—satellite offices that surround the main branch—are down from 5,000-5,500 square feet to around 3,000-3,500 square feet. Main offices are holding steady at 5,000 square feet and larger.
Many of the office elements are the same, such as the lobby, retail space and consultative areas. “But what we are not seeing is the expansive teller lines. Those are being replaced by technology and pod environments (where staff work side-by-side and one-to-one with members),” said Florini. “The traditional teller line is going away.”
That move supports what many analysts have said about the direction of branches—they are moving away from transaction hubs to centers for sales and advice.
Florini said he is seeing more credit unions emphasize consistency in messaging and branding across branches and all other delivery channels. He added that retail space is creating some of the same “look and feel” of electronic channels by adding more high-tech video displays and interactive features inside the credit union, such as tech bars where members can interact with the credit union via tablet devices.
New Look And Feel
But Florini said where CUs are taking a different approach with look and feel than they do with online is by adding more history walls to connect to the community.
“That enhances the credit union brand as well,” he said.
As far as the pace of CU branch expansion, Florini said it is approaching levels seen prior to the recession, which then stalled office growth and forced many FIs to consolidate.
“But I think there is a really strong effort on the part of CEOs now to make the growth smart growth,” said Florini. “They don’t want to saturate any area with too many locations, they want the optimal network. That decreases their expansion costs and increases the effectiveness of individual locations.”