Focus 2021: Big Data, High-Performance Branches
Strategies for building a high performance branch network.
Amidst the rapid rise of online and mobile technologies, one of then most critical challenges facing credit union and community bank leaders is to understand how far and how fast to swing the pendulum — more towards branch investment, or reduction? Capital investments must be carefully balanced against the funding and resources needed for enhancing lower cost digital channels — all without losing valuable customers, increasing and simplifying positive brand experiences, and growing market share.
Despite the growth of mobile, recent studies suggest some level of mobile banking and online saturation: many consumers still value the advice and problem solving capabilities of knowledgeable branch staff for major financial decisions. Simply closing all branches quickly is no more than a technologist’s pipe dream for a balanced set of high functioning delivery channels.
While overall branches in the U.S. declined from a high of 99,550 in 2009, to today’s 91,861, much of the 8% overall reduction came from major banks eliminating duplicate merged bank locations and the elimination of inferior sites in declining and remote smaller markets.
Meanwhile many large credit unions and community banks continue to expand their branch network in key growth market locations to enhance convenience and grow competitive market share. Unfortunately, many are deferring the critical issue of eliminating underperforming legacy sites and focusing more resources on digital improvements.
Accurately answering the question of branch redistribution, and investing wisely over the next five years requires savvy big data and performance trend crunching, coupled with expert analytical skills. In order to accurately forecast growth data, digest consumer behavior insights, and reflect on your desired brand position and real estate strategies, you’ll need all factors working in sync. Most importantly, you’ll need the expertise of understanding diverse markets and predictive modeling to help you decide exactly where — and how far — to change the number of branches, sizes, shapes, transaction management, technologies and staffing model of your future branch network (a crystal ball wouldn’t hurt).
Getting to a forward-looking 2021 Branch Network Plan requires a fresh and objective look and analysis of current market areas, branch site locations, performance trends, staffing model efficiencies, and competitor branch penetration. You’ll need to identify the size of current branches reflected against the actual scale of market deposits, loans, investments, and mortgage market share volumes. All that analysis must be done before any far reaching multi-million dollar real estate decisions should be made on where to place potential new branches for expansion and which ones to close or move.