Before building another physical branch, consider investing those dollars in technology to transform your credit union's website into a vibrant, interactive, high-performing resource.
According to Tony Ward-Smith founder of strategic marketing and consulting firm Ward-Smith & Co., it's time for CUs to go virtual.
"The credit union community is struggling tremendously now, and while everyone is saying it's because of the big hit from the corporates situation and the economy, if you look carefully, those aren't the true driving factors," said Ward-Smith. "What we've got here is a serious problem of economy of scale, especially for small credit unions. It is simply too costly to run a small, branch-based full-service banking operation today. Embracing a virtual banking presence can not only help cut operating costs but dramatically improve the quality of service."
He added that an enriched Web presence essentially eliminates the "big guy" advantage, because even the smallest operations can look and function in ways that are every bit as sophisticated as the largest operations providing an anywhere, anytime convenience at a fraction of the cost of multiple branches. Ward-Smith said a strong virtual presence would also help credit unions overcome their longstanding image problem with consumers who still aren't able to understand credit unions.
"The universal critical point of difference is that credit unions are helping places not just selling places, but credit unions haven't really made that clear so consumers can't really make the distinction," said Ward-Smith. "A strong virtual branch filled with real information, tips, advice, services and tools that consumers want and need now, is an opportunity for credit unions to not only survive but succeed. Take online banking a step further and incorporate a resource dimension that complements it, such as online personal bankers. Taking steps to go virtual now could be a game changer for credit unions."
Stating that it is not an either or scenario, Ward-Smith said credit unions can then redefine the existing physical branch as more of a resource center to support consumers' needs that extend beyond what can be resolved over the phone or on the website. "There are some exciting possibilities in the new role physical branches can play," said Ward-Smith. "There is still an unmet consumer need to help people figure out where they are with their finances and the bigger picture is that credit unions want to establish lifetime, ongoing , evolving relationships, but are they ready to deliver on their promise?"