Branches in retail stores are an increasingly popular and efficient means of
growing membership and strengthening relationships with members. Though the
number of financial institutions is shrinking, across the board the total number
of branches is rising.
The Community Bank Competitiveness Survey 2005 from the ABA Banking Journal/ABA
Community Bankers Council recently revealed that nearly 79% of banks surveyed
believe that branching will be their main avenue of future growth. The survey
also revealed one in five community banks is growing its branch network.
However, credit unions are outpacing banks in growth, according to the Credit
Union National Association's 2004-2005 Credit Union E-Scan report. One course
many credit unions are pursuing is expanding their branch network is partnering
with retailers to construct in-store branches.
Matching Member Needs
Undeniably, in-store branches are more convenient for some members. Many of
the members of Silver State Schools in Las Vegas, NV, with $701 million in assets
are school teachers and visit Wal-Mart to purchase school supplies. Silver State
Schools already had a few branches in Albertsons grocery stores and expanded
their network in Wal-Marts to better serve their members.
Since many places are open 24-hours in Las Vegas, by partnering with establishments
with different hours than the traditional branches Silver State can cater to
members shopping habits. Its membership and assets have increased through both
member acquisition and members using more services.
CommunityAmerica in Lenexa, MO, with $1.4 billion in assets has a partnership
with HyVee grocery stores and also has chosen extended hours and remains open
Benefits of In-Store Branches
Branches located in retail stores are a cost effective way to add an additional
branch and reach a wider audience. Overhead costs are often lower and the in-store
branches typically demand a smaller staff.
The dynamics of a smaller staff lend themselves to different employee rols
than in a traditional branch. In-store branches commonly have a concierge, often
the branch manager, who can help guide customers.
The creation of a concierge position is a growing trend among financial institutions.
The community bank survey revealed 27.5% banks added a concierge position to
direct branch traffic. Over the past two years, Bank of America launched a "Leading
from the Lobby" initiative in its 6,000 branches. Branch managers are greeting
customers and directing them, performing transactions if needed.
There is also a greater opportunity for cross selling through increased customer
interaction. "We are trying to get more of a sales culture in the traditional
branches," said Marc Healy, director of member solutions at BECU in Seattle,
WA, with $5 billion in assets. BECU is migrating similar practices into its
brick and mortar, traditional branches.
More information on branching is available in executive brief, Branching:
A Brave New Brick-and-Mortar World and the streaming webinar recording Growing
Members, Cutting Costs, and Building Partnerships through In-Store Branching