Rethinking Branch Design: Strategies for Non-Traditional Approaches to Branch Design and Operations

Darla Dernovsek
April 16, 2008 | COMMENTS

Designing the right branch can help credit unions achieve a wide range of goals, from membership growth to increased efficiency. But determining what constitutes the “right” branch for a credit union can be challenging at a time when traditional approaches to branch design are being discarded or refined in response to market pressures, consumer practices, increased competition, new technology-based tools, and strategic plan priorities.

There is no single event or trend that is driving the development of non-traditional approaches to branch design. Gerald D. Verdi, president of Verdi & Company in Buffalo, New York, notes that branch design is changing in response to “a whole slew of things that are happening at the same time,” giving credit unions more room for experimentation.

Credit unions are taking advantage of these developments to tinker with branch design on two levels. At the facility level, credit unions are changing the size and structure of the branch to adapt to societal influences and channel migration. These changes include a growing desire to build “green” branches while reducing the overall size of the branch. At the operations level, credit unions are redesigning the teller area to embrace an open concept that replaces traditional teller counters with teller pods. Credit unions also are using technology to change the delivery of some member services, which may include a greater use of self-service approaches in some branches.

Credit unions' experiences are highlighted by examples of non-traditional branches currently in operation or in development. These examples include:

• Planning to “build green” at University Federal Credit Union in Austin, Texas. University will open its first “green” branch in October 2008 and plans to build all future branches with a “green” design that decreases energy use, recycles “gray” water that comes from sinks and showers (but never toilets) for landscaping, and reduces the impact on the environment.
• Spurring growth by introducing “dialogue banking” with teller pods at Innovations Federal Credit Union in Panama City, Florida. Innovations' leaders credit the dialogue banking approach with helping the credit union grow from assets of $81 million in 2004 to $112 million at year-end 2007.
• Refining the use of remote teller systems at APGFCU in Aberdeen, Maryland. APGFCU shares its experiences on when and where to install remote tellers effectively.

Credit unions often tie the launch of a branch with non-traditional elements to the introduction of significant changes in their name, their field of membership, and their brand. This reflects credit unions' desire to use strategic planning to guide changes in branch operations. Rather than experimenting with change for its own sake, savvy credit unions are using non-traditional branch approaches to reinvent member service in ways that help meet strategic goals.

This is the executive summary to a CUNA Operations, Sales, and Service Council white paper by Darla Dernovsek entitled “Rethinking Branch Design: Strategies for Non-Traditional Approaches to Branch Design and Operations.” Read the complete paper and others in the white paper section of the OpSS Council website.