Be Strategic With Your Branch Hours

CU360
November 4, 2009 | COMMENTS

Credit unions and banks alike devote significant research to determining the optimal location for branches and the appropriate staff for those branches. But one facet of branch operations is often overlooked during the planning phase—the actual hours the branch will be open. Hours of operation can provide a source of competitive differentiation, notes Bancography's quarterly journal Bancology, but it can also affect overall expense levels. Decisions about operating hours must be made carefully because once you offer extended hours, it's difficult to retract them.

A generation ago, it was common for branches in smaller communities to close one afternoon a week, usually Wednesdays, and the practice endures in some small towns. Today, the industry is more competitive and more complicated, and financial institutions maintain diverse operating hours in different markets.

Extended weekday hours are most effective in distant suburbs on the outskirts of major metropolitan areas. For the commuter traveling up to two hours home from central Atlanta or Los Angeles , the easy availability of quick banking services can be invaluable and can create significant customer loyalty. While the most common level of extended drive-in hours targeting commuters is 7 a.m. to 7 p.m., there are some institutions that offer drive-in banking until 8 p.m. or even 9 p.m. on some days. Of course, extended hours can bring additional cost, so it's imperative to staff efficiently. Making use of peak time shifts can maximize coverage in the busiest hours without carrying a full complement into the extended hours.

Saturday hours are most effective in residential neighborhoods, and they report high account-opening activity on Saturdays. In some markets, mostly in the Northeast and West Coast, Sunday hours have become commonplace, too.

In the past, financial institutions often paid overtime for Saturday staff, but with efficient scheduling models, Saturday shifts can be covered on a rotating basis by full-time employees without breaking the 40-hour limit. In-store branches have long been used as an inexpensive way to extend the capacity of nearby branches, on both weekends and evenings.

One decision point regarding hours involves whether hours need to be consistent across branches within a given market or within an entire franchise. For larger institutions, having all branches maintain the same hours gives simplicity, especially to call center personnel fielding inquiries. It also simplifies advertising because it's easier to print “open Saturday 10 to 4” without the dreaded asterisk indicating “selected branch only, call for details.” In reality, however, it's rarely cost effective to keep all branches open late or on weekends.

Consumers value convenience, and so extended hours can be a key differentiator. Keep in mind, however, that operating hours can be easily replicated by competitors. If you add hours and your competitor matches that, you've both raised your costs without providing any relative differentiation. Still, for the institution that acts first and remains committed to convenience through extended access, a well-planned strategy regarding branch hours can be a beneficial marketing tool.