After years of talk about the death of brick-and-mortar, bank branches are back on the rise in 2024, with Chase, Bank of America, and PNC expected to add more than 800 new branches by 2029. Credit unions take note: traditional banks are making a push for lower-income consumers in underserved areas.
Fortunately, the industry is well prepared. Credit union branch numbers were essentially unchanged at midyear compared to one year prior, and many shops have made a concerted effort to step into communities where banks have pulled out and left banking deserts in their wake.
With competition at a fever pitch, how can credit unions best compete and differentiate themselves? This year’s Future Branches conference in Austin, TX, offered a variety of lessons. Here are a few takeaways from Day One, with insights from credit unions and banks alike.
1. Financial Wellness Is Central To The Branch Experience
With branch traffic down and branch visits now focused more on consultation than transaction, many credit unions are using those visits as an opportunity to focus on financial wellbeing. Although many shops make those tools available online, in-person visits allow staff to dig deeper into how they can help members.
“It’s a major strategic initiative for us,” says Richard Sellwood, senior vice president and chief operating officer at USF Federal Credit Union ($1.1B, Temple Terrace, FL). “We spend a lot of time talking to team members and members about it.”
Chief among those tactics is training frontline staff on how to review credit reports. Employees who understand how to interpret those reports are better prepared to identify opportunities to serve members.
“It creates trust and sets out a road map for success,” Sellwood adds.
Valley Strong Credit Union ($3.9B, Bakersfield, CA) also focuses on financial education for both sides — a natural move, given its origins as Kern Schools Credit Union. According to Mirella Reznic, chief strategy officer, much of that comes down to helping in-branch counselors understand that when something on a credit report or in a member’s financial history doesn’t look right, that’s an opportunity to talk with the member about what happened. Often, she adds, those behaviors weren’t intentional, but because the member didn’t know better — and that creates an opportunity for education.
2. Vibes Matter
Branch location, layout, and technology are important, but they all take a back seat if the space doesn’t feel welcoming to staff and members.
Sundeep Kapur, head of digital enablement at MidSouth Community Credit Union ($455M, Macon, GA), made a point of highlighting early in his remarks that he was wearing jeans rather than a suit — and there was a lesson in that.
“If you wear a suit and tie, sometimes you intimidate the consumer you’re in front of,” he says.
Banks and credit unions frequently work with chief retail officers, architects, consultants, and others when designing branches — but not the staffers who actually work at the institution day to day. That’s a mistake, says Matt Schewe, VP of retail operations at Royal Credit Union ($5.4B, Eau Claire, WI). Those folks have their own meaningful insights about branching, including access, parking, and more. They’re impacted by branching decisions as much as anyone and should be part of the process.
Of course, branches exist to serve consumers, and Kapur offers an old Indian phrase: “My guest is my god.” In other words, when members walk into the branch, it’s important to treat them with the utmost courtesy. If they aren’t treated hospitably, odds are they won’t come back.
3. AI: Today & Tomorrow
AI continues to reshape banking, and credit unions are latching on in order to increase efficiency and improve operations. Premier America Credit Union ($3.7B, Chattsworth, CA) dipped its toes in the water by launching AI trainings for staff, using the technology to prepare employees for deeper, more complex conversations with members.
Staffers go through AI coaching and work with an AI avatar roleplaying as a member, working through the relationship cycle and repeating as many times as necessary until they pass the course. According to Tamara Scott, vice president of retail delivery, AI decreased employees’ anxiety — when compared with testing these conversations face to face with another staffer — and increased overall scores. The credit union launched the process with a small group of employees and will include it in training for everyone in 2025. Not only has it led to better conversations, adds Scott, it has also helped employees understand the opportunities AI presents.
Tony Brusio, assistant vice president of retail strategy and optimization at SECU of Maryland ($5.6B, Linthicum, MD), echoes that sentiment.
“As long as folks understand it’s not a threat to their jobs and can improve the day-to-day activities they’re involved in, then you start to get buy in.”
Of course, many credit unions struggle with knowing how and where to start their AI journey. Valley Strong’s Reznic advised starting the process with a focus on governance, including clearly outlining who owns data, what different employees roles with it are, and who signs off on changes.
“AI is just a way of analyzing data — it’s a more sophisticated version of Excel,” she quips. “It takes diverse data sets and finds patterns. Machine learning and large language models are about making sense of data.”
4. Don’t Reinvent The Wheel
When it comes to branch renovation, a little goes a long way.
“Don’t underestimate the impact of a fresh coat of paint and a big blue ribbon on the outside,” says Deborah Lumpkin, senior partner at Indiana-based Centier Bank. When consumers see that, she adds, “they think there’s something new and interesting going on.”
The real lesson here, she explains, is to invest from the outside in, with a focus on what has the biggest impact. To repeat a phrase heard over today, your branch is your billboard.
5. Customer Experience Matters — But So Does Communication
At nearly $30 billion in assets, Colorado-based FirstBank dwarfs much of the credit union space. Although Saturday hours are table stakes for most financial institutions these days, FirstBank was one of the first in Colorado to provide that service. But market realities forced the bank to dial that back, pruning some low-traffic locations and shifting resources to other branches to provide the best customer experience, says Josie Huelskamp president of retail and digital banking.
When it comes to branch closures or reducing hours, the bank takes a proactive approach to communicating changes — especially if those changes might be perceived as negative. That means emails, letters, notifications in mobile and online banking, and more. Additionally, FirstBank uses its internal data to determine which customers have visited specific branches within the past 30 days to tell them in advance about upcoming changes.
Huelskamp describes the approach as similar to a concierge service, determining who uses which location, what kind of business they perform, and sharing other ways they can do that business. Communication also varies by customers, with those who do the most business receiving the most handholding. However, she is quick to note those who are frequent visitors, regardless of how much business they do, also receive a high-touch approach to avoid a substantial impact from any closures.
The lesson, she says, is that communication still counts. And rather than customers being upset about losing access or being rerouted to self-service channels or different locations, most are happy the employees they are familiar with would no longer have to work on Saturdays.