By Ray Birch
ST. LOUIS—The growing emphasis on digital services has put a premium on evaluating the performance and effectiveness of branches, says one expert, who adds location design can also help with the current labor shortage.
Derek Maschek, director of design at Keeley Construction, said digital services have never been more important to get right and deserve proper investment. But so do branches.
“All of this means the dollars you’re dedicating to your future are being pulled in at least two directions, making informed decisions and decisive action is more important than ever,” Maschek said.
The question about whether to branch or not to branch remains front and center among credit unions.
“The short answer about whether to branch is ‘yes,’” said Maschek. “Research from numerous sources—confirmed yet again by a recent Novantas survey—consistently affirms that while Americans are comfortable using digital channels for handling their most transactional banking needs, they still prefer an in-person visit for anything more consultative like handling a problem, asking a question, or starting something new. Additionally, those surveyed still prefer the presence of a branch that could be visited if the need arose, especially when choosing a new institution, offering that it makes the institution feel more real or legitimate, MasChek related.
According to MasChek, over the years Keeley Construction has observed a freestanding building also reflects an organization’s tangible commitment to a community.
A ‘Tentative’ Feeling
“A leased space in a strip mall feels more tentative than a freestanding branch building,” he said.
A physical branch can also support digital when there are shortcoming, he said, pointing to surveys, including the American Consumer Satisfaction Index, that have found many credit unions still suffer from an inadequate or even painful digital experience, he said.
“Which arguably perpetuates the need for a physical branch to fill this service gap,” Maschek said.
Maschek said credit unions need to assess whether their branches are helping or hurting their growth strategy.If a branch is not performing, the credit union should first evaluate if location is the problem.
Derek Maschek
“Perhaps two or more branches have overlapping service areas. Changes to growth and traffic in the area may have undermined what was a great choice 20 years ago,” Maschek said. “You may have acquired another institution causing the conflict. Of course, you need to consider your future strategy—membership you want to pursue—as the changes that put you in this situation are still evolving.”
Appearances Matter
Appearance may also be the problem, Maschek noted.
“Time does a number on buildings, no matter how much we aim for a maintenance-free or timeless design. Stylistic preferences change and materials wear and fade,” he said. “The look of your building says a lot about you, whether you like it or not.”
A poor appearance can send a message of apathy or neglect, Maschek said.
“It can affect the morale of the current staff or discourage a member from engaging with you or a prospective team member from joining your organization,” he explained. “There are times that the style of a building can be timeless or well executed enough that it becomes stylish again, requiring limited but well-considered attention. Interior and exterior renovations to address aesthetic problems can be accomplished depending on the level of the challenge and what other issues may need concurrent attention.”
Poor on the Floor
Sometimes the problem could simply be the floor plan.
“The way a branch operates and flows for both the team and the member has changed significantly even in just the last ten years,” stated Maschek. “The way your site is laid out may be causing you problems at your drive-thrus or your vehicular traffic flow could be causing cars and people to be interacting dangerously. Similarly, a counterproductive floor plan can hamper the quality of your team’s productivity or compromise your well-conceived member service methodology.”
Maschek said given that most older branches tend to be larger than modern ones, there are opportunities to reconfigure interior layouts to better conform to service goals.
“As a bonus, you may gain additional functions like a service center, a community room, or needed administrative space. Minimize disruption during construction and use your budget most effectively by coordinating your new design with phasing and core infrastructure,” he recommended.
Keeping Up With the Joneses
Maschek cautioned that credit unions can make mistakes with new technology, such as ITMs and VTMs, if the equipment is being installed to “keep up with the Joneses.”
“Change is inevitable. Engaging with impressive technology before the time is right for you can be disastrous, though,” he said. “Your current members are your foundation and while they can be pushed towards progress, they can only be pushed so far and so fast. Meanwhile, your future members demand a credit union partner that is at least keeping up with them. This is a people business, and most credit unions serve a technologically diverse group of members, one being quick to embrace everything new and one that is rather resistant to it, although frankly most are in the middle.”
Maschek said there are ways to address each member group’s inclinations while planning for the “technological eventualities.”
“We routinely design for technological changes, such as pneumatic systems at drive-ups planned for future ITMs, and teller pods designed to feel very much like a traditional teller line complete with both undercounter steel and cash recyclers,” he explained.
Emphasizing the Brand
Maschek addressed the importance of effectively conveying the credit union’s brand throughout its locations.
“First, understand your brand—your mission and vision, the desired feel and spirit you strive to convey for team and members, and of course, the graphics and language you use to express and reinforce it all,” he said. “Consistency of experience instills trust and strengthens your brand, but it’s more complicated than superficial duplication. Every space and every element within your space is an opportunity to reinforce your brand’s story, deeper meaning and value.”
As an example, Maschek pointed to Starbucks.
“Think of Starbucks and how no matter where you go in the world, the feel and the experience is the same inside and out,” he said.
Privacy Concerns
The move toward smaller branches and more open designs and having more open designs has led to growing member concerns over privacy, Maschek said, adding there are options to address the problem, such as engineered sound-masking, acoustically sealed sliding glass doors or acoustical ceiling panels.
Branch design can also address the current problem with staffing brought about by the Great Resignation and the growing war for talent.
“This may be a temporary inconvenience, or it could be a long-term trend,” Maschek said. “Regardless, finding new team members is a real challenge and since every growth decision equates to a hiring need, finding qualified staff is essential.”
‘Now is the Time’
Maschek recommended seeking efficiencies in the floor plan to limit the number of staff required for operating a branch.
“If you haven’t moved to the universal teller concept, now is the time,” he said. “If your drive-up isn’t efficiently proximate to your lobby tellers, make that change. Next is to take more care in the design of a space so that is enjoyable and healthy to spend an hour or eight in. Install materials that don’t off-gas VOCs. Provide natural light and views of nature. Provide color-tuned lighting that adjusts over the day just like outdoor light does, and specify mechanical systems that filter more contaminants and provide fresh air intake.”
The Security Question
Finally, branch security is a growing concern as robberies of financial institutions have increased, he said.
“Locations across the country have seen dramatic increases in robberies,” said Maschek. “Will this trend reverse after the COVID-19 pandemic subsides? Will we see the need for masks every ‘flu season’ for years to come creating a seasonal temptation for crooks? A traditional teller line with bullet-resistant glass is certainly one answer, but the negative impact on a branch as a service center would be an unfortunate reversal of years of evolution.”
Maschek said there are other solutions available, such as highly visible security cameras, biometric scanners that allow access, or smartphone RFID to dissuade the would-be robbers through expressed identification.
“Some will see these actions as an invasion of privacy, especially at first. How far you go needs to be carefully weighed against the risks of doing anything and the risks of doing nothing,” he said.