Future of Shared Branching in a Mobile World
The credit union movement's shared branching system has a bright, transformed future ahead as mobile banking and payments become a mature component of the credit union landscape.
The increasing adoption by members of mobile banking is inevitable and welcomed by CO-OP Financial Services, with CO-OP Shared Branch among its leading business lines.
Branches will by no means go away, but they will change and they will actually include the use of mobile devices within the branches. Shared branching, specifically, holds the answer to both declining transactions in and increased cost of branches because this unique credit union network provides an income stream to the acquirers or branch owners.
It may seem like an anti-trend but it is none-the-less a fact: People, young people in particular, still want branches.
The Houston Business Journal published a survey of 600 Gen Yers on Jan. 24, 2014 that revealed more than half said they visited a branch at least once a month. People aren't comfortable buying by mobile until they feel they know enough about a product and young people opening their first credit union accounts want to do so in a branch.
This finding is confirmed by a 2013 study by Raddon Financial Group that found the greater the branch usage, the younger the average age. Nineteen percent of the respondents were in the Gen Y age range, yet this age group comprised 25% of the total using shared branching at least once per month. The study also found that the more a member uses branch services, the greater the likelihood that the credit union is their primary financial institution, and increased member satisfaction rises the more they visit their branch. If new accounts and lending needs face to face interaction, then branches are the key to growth.
Mobile technologies are contributing to the decline of basic branch transactions. However, the cooperative concept of shared branching is becoming more important than ever. As the number of individual credit union branches decrease, the nationwide network of shared branch locations will enable credit unions to cost-effectively maintain their community presence.
Branches will be the source of added business, fewer but larger transactions and more advanced transactions.
Sarah Canepa Bang is president/COO of FSCC LLC and chief strategy officer of CO-OP Shared Branching. She can be reached at 800-782-9042 ext. 1205 or Sarah.firstname.lastname@example.org