NEW ORLEANS – Credit unions are experimenting with leasing small spaces for mini-branches, rather than buying or constructing larger locations. The best practice was among those shared by industry consultant Bill Goedken during his break out session at the CUNA CFO Council Conference today.
Strip malls offer some great deals these days, Goedken said, especially if a credit union can find an appropriate space, like an end unit that has potential for a drive-thru. He shared one credit union’s strategy of opening three leased-space branches to compete with just one new bank branch.
“From experience, the CEO knows one will be barely profitable or unprofitable, one will go gangbusters, and one will be in between,” he said. “The busy location is where you would establish a permanent branch.”
Financial service providers are also increasingly co-branding branch space, partnering with Starbucks or a dry cleaner, so members can take care of two errands with just one stop.
“I believe future of credit unions and banks will be to touch members’ lifestyles more than their money,” he said.
However, Goedken cautioned his CFO audience to choose co-branding partners wisely, because if the business fails or suffers a scandal, the institution’s image could be damaged as a result.