By Meredith Deen
An abandoned machine shop becomes a brew pub.
An old train station gets a second life as an Internet café. Shipping containers are converted into cozy, tiny houses and stacked to create eye-catching office buildings.
Call it creative repurposing. Call it adaptive reuse. Call it recognizing consumers’ changing preferences and responding with engaging solutions. In the same way, credit unions may need to weigh their options for transforming older, inefficient branches into profit centers that entice members and consumers to stop in.
The oldest branches in a credit union’s network were likely built in an era when operations required ample space to accommodate a large teller staff, several private offices, and rows of file cabinets and other document storage. With the steady decline in branch traffic over the last quarter-century and increasing reliance on automated transaction processing and electronic record keeping, branches can now operate cost-effectively in a fraction of the space required previously. However, closing older, fully depreciated branches may not be an option given the tremendous cost to replace them with smaller, more efficient offices.
As an alternative, executives might consider how best to creatively repurpose these branches into more vibrant destinations that facilitate higher quality interactions with members looking for guidance in managing their personal finances. As an industry, we need to reimagine the branch as an inviting, sales-centric showcase for the financial products, services, and support consumers expect from a trusted advisor. The first step in that direction, according to Anthony Burnett, Chief Evangelist at Level5, a design firm that works exclusively with financial institutions, is to “understand the business case driving the transformation.”
“Knowing what we want to have happen in the branch will drive decisions about technology, branding, service delivery, and human investment in the new space,” Burnett suggests. “The (consumer) experience for many financial institutions is centered on maximizing high-value interactions with consumers who enter the branch. We want to capitalize on these opportunities to drive deeper into relationships, build trust, increase wallet share, and provide a level of service that goes beyond traditional order-taking via a teller line.”
Take these steps toward remaking outdated, low-traffic branches into charming reception centers for welcoming new members and providing existing members with a remarkable level of personal service—when they seek recommendations on financial matters they prefer not to handle via remote channels:
Steps To Take
Ask the right questions. “When looking to repurpose existing space and create something new, the first question is ‘Why?’ ” Burnett advises. “We want to quantify why we want to transform the space, and then we can make decision on what it should do—and look like.” Beyond the why are who and what. Which members are using the branch now, and how can you continue to serve them while reaching out to a new member base with expanded and enhanced services?
Wipe the slate clean. Instead of working with the existing branch layout, imagine what you could do with all that space starting from scratch. Replace the imposing teller counter with comfortable pods and a self-service center off to one side for routine transactions. What about the rest of the currently underutilized space? A variety of possibilities may emerge based on location, the needs and preferences of your customer base, and the inspiration you may find from other financial institutions and service sectors:
Emphasize convenience. What if members could check off several tasks on their errands list when they stop by your office? Perhaps they could buy stamps, ship a package (or pick up one), pick up a gift card, purchase or recharge a transit pass, and even pause to enjoy a cup of coffee as they check their balances at the technology bar and chat with a helpful agent.
Connect to community. A Main Street or centrally located branch could open its doors and conference areas for community meetings and events, and financial education partnerships.
Become a one-stop financial center. Make excess office space available to business partners such as insurance providers, wealth management advisors, and trust services. By offering ready access to a full range of financial services, your credit union “can continue to position itself as a place where problems are solved, relationships go deeper, and the member experience is nothing short of Wow!” Burnett says. “When vision meets implementation, then true branch transformation can impact the financial institution as the physical branch synchronizes its omni-channel experience.”
Enhance the member experience with technology. Speaking of the omni-channel experience, it may be useful to examine how your CU parlays technology to strengthen its brand identity across channels. Do your online and mobile services provide the range of product information, account access, and interactivity that existing and prospective accountholders expect when conducting routine transactions and shopping for new services? Are you leveraging branch technology, such as self-service kiosks, smart ATMs, and cash recyclers, to free your staff to handle higher quality exchanges with members? Are you deploying the most effective combination of user-friendly technology and sophisticated automated tools to optimize staff scheduling aligned with evolving traffic demands and reporting to track and increase sales across the branch network?
Train staff to thrive in this new service paradigm. Branch employees will be spending less time conducting routine transactions and more time guiding members in making decisions central to achieving their financial goals—and, in tandem with this new focus, more time selling the products and services members need to achieve their goals. In addition to honing their transactional skills and product know-how, staff training and development must also encompass building sales skills.
“The transformation of the physical environment, matched with training, can improve sales, service, and earnings in the branch,” Burnett says.
Effective execution of a creative new vision for the branch can renew its purpose as the flagship of your organization—delivering the financial services consumers want and need with optimal efficiency, convenience, and currency. Like other examples of creative repurposing, the branch can become something novel and inviting, and definitely worth the trip for at least a glimpse of what person-to-person banking in the 21st century looks like.
Meredith Deen is president of Alpharetta, Ga.-based Financial Management Solutions, Inc. (FMSI), which provides financial institutions with business intelligence and performance management systems for efficient branch staff scheduling and lobby management. She can be reached at meredithd@fmsi.com.