This is a series of snippets from The Credit Union World, by Wendell Fountain, under the category Bank (new in this blog), discussing the challenges behind Credit Union Operations (chap. 13).

Branches–Bricks and Mortar

Most Credit Unions today, as well as other Financial Institutions, face the dilemma of whether or not to build a brick and mortar branch.

In the 1990s, the credit union literature was replete with articles about how the electronic boom was going to make physical branches obsolete — well that just hasn’t happened. Boards and managements wrung their hands in despair, what to do, they thought, because many members wanted a convenient, physical branch.

How have credit unions responded to this dichotomy? The answer is… in about as many ways as one can imagine.

Credit unions are building new branches, sharing branches, placing small facilities in grocery stores or other business which have customers in common, providing more electronic services than ever through electronic/automated branches, call centers, ATMs, credit cards, debit cards, gift cards, the Internet, and on and on.

Yet, it is still not enough.

The leadership …have found that their membership constituencies are not easy to please.

They want everything and want it now!

And, if their credit union won’t give it to them, some financial institution will.

Forget loyalty, it’s dead and gone!

Competitive forces buried that concept and practice many years ago.”

A particular trait of the New Consumer, the 21st century citizen. The loyalty factor is not over, absolutely, it simply morphed into a more significant value generator.

The Internet brought even more diversity to the services industry. At the same time shorten distances while amplify customer’s voice. It is for sure the prevalent alternative for the near future, and banks, as well any other service provider, must invest and develop this force, turning into an identity trait for the brand.

I believe it is easy to see that the old-style service offered by most credit unions and banks around the world is going to change in the near future. It simply do not fit the model. I also believe that convenience, as well as security, are some of the driving forces, but innovation is the king.




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