What is happening to retail bank and credit union branches is similar to the multi-trillion dollar "brick-and-mortar" retail industry, which has experienced its own rash of bad headlines recently related to the impact of digital transformation. Silicon Valley luminaries might describe this effect as software "eating" another legacy business world, a la Uber for ride sharing. However it's described, it is a reality that more and more consumers are eschewing the hassles of shopping at stores in favor of the convenience of the click-of-a-button purchasing on their phones or PCs.

Reading daily headlines might lead us to believe that shopping via brick-and-mortar stores has already gone the way of the dinosaurs. You'd be wrong. The fact is, 94% of retail sales still happen in-store, according to Retail Touch Points. Further, the majority of shoppers still prefer to go to the stores for their purchases (versus shopping exclusively online), according to Retail Dive, even among the uber-connected millennials, many of whom view store visits as an essential part of the overall shopping experience. You need look no further than the crowds at any Apple store on any given day to see that brick-and-mortar shops can still draw in shoppers.

How does this connect back to financial services, retail banks and credit unions? One word: Experience.

What Consumers Really Want

The increasing popularity of online banking has everything to do with consumers naturally wanting faster and more convenient transactions. It is highly likely that with all things being equal, online banking might win every single time over visiting a physical bank branch. This is because what consumers really want is to avoid the negative experiences that are sometimes associated with going to a branch – long lines, rude service, parking shortages, shoddy facilities, etc. – especially if the online experience is good enough to get the job done.

But where credit unions can win over members and bring them into branches is by delivering a unique experience that cannot be accessed from online banking alone. Being able to withdraw cash from ATMs is an obvious example. A more subtle example is a specific banking service that is best delivered in person, such as setting up a line of credit or applying for a mortgage. For some members, perhaps it's a preference for interacting with other human beings instead of with a graphical user interface or artificial intelligence-driven chatbot that completes the experience. Either way, branches must be ready at all times not only with services, but with branches that are enjoyable for consumers, and even add value to their (banking) lives.

Successful credit unions have a unique opportunity to seize upon these consumer sentiments by hyper-obsessing about how they can deliver an optimal member experience at their branches. This experience starts with delivering a highly personalized approach to member service that rewards members for taking the time and effort to set foot in the branch lobby when there are options not to. Fortunately, credit unions are already pretty adept at this.

Driving Better Experiences Through 'Brand Uptime'

One aspect many credit unions may not be thinking enough about in delivering the optimal member experience is the state of their branch facilities themselves. There is a technology corollary here too. It's common knowledge these days that most consumers are likely to abandon a website or a mobile app in seconds if they fail to load fast enough. In fact, according to Google, mobile users will leave if an app or site fails to load in three seconds or less. This is a concept known as "uptime."

Likewise, the key performance indicator for facilities management is brand uptime – based on the idea that the state of a facility has a direct impact on how consumers view that company's brand. Thus, the better the brand uptime, the better the company is likely to perform as a business overall, considering that a third of any company's intrinsic value can be rooted in its "brand equity." Brand uptime for credit unions can be an essential measure of member experience as the local branches offer the most tangible way for consumers to interact with organizations in non-digital realms.

Ensuring brand uptime is also a way for branches to integrate the best aspects of the physical and digital worlds. Before the advent of technologies such as cloud, software-as-a-service and enterprise mobility, maintaining and repairing facilities was a highly manual, time-consuming endeavor. With these technologies now widely adopted, facilities management is far more self-service, automated and efficient, enabling just about any credit union employee to initiate service requests and track their requests through the full lifecycle of the work order. In this way, using technology empowers employees to take a more active role in their credit union's brand uptime at their local branches.

Status Quo Is Not an Option

Even with the best possible consumer experience at the branch, consumer adoption of online banking is not likely to slow down anytime soon. This is a good thing for banking consumers, who have more options when choosing to do business with their bank or credit union. However, this trend does not necessarily foretell the end of the branch model in the same way that e-commerce does not mean the end of brick-and-mortar retail.

What has to change is the role of the branches themselves – from physical locations that deliver run-of-the-mill banking services to destination spots that deliver unique consumer experiences and services, which further enhance the credit union/member relationship. The first step in delivering this unique experience is ensuring that the facilities themselves are in the best physical shape possible. The good news is that new, advanced technologies are revolutionizing how credit unions and other facilities-oriented businesses can maintain a high standard for brand uptime at all times.

Tom Buiocchi is Executive Director & CEO for ServiceChannel. He can be reached at 408-464-7072 or [email protected].