Go to:

July 2018
< Jun Aug >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

New CUNA Councils White Paper Discusses How Technology, Economics & Consumer Behavior Affect Branch Development
Friday, April 5, 2013 6:45 AM

There has been a debate within the financial services industry about technology’s effect on branch development. Some analysts have forecasted the end of the branch as we know it; others have held that the branch will be with us, but will evolve into a service center for problem resolution and complex products—mortgages, student loans and wealth management.

A new white paper, from the CUNA Technology Council and the Operations, Sales & Service Council,  “Is Technology Causing Branches to Close but Service to Thrive?,” addresses this question and others by interviewing credit union practitioners and analysts, as well as examining relevant research.

Consumer behavior, not technology, is the primary indicator of branch changes, is one of the findings of the research.  There has been a significant decline both in average monthly transactions and visits to the branch. Consumers—even those who are tech savvy—express a need and find comfort in a branch that is convenient, even if they rarely use it. The branch continues to be a symbol and brand embodiment for the financial institution, albeit an increasingly costly one as branch expenses tend to be higher than alternative channel costs.

The economics of alternatives to building a branch are compelling— it cost an estimated $1 million to $2 million to build a branch with five to eight employees at a cost of $350,000 to $400,000 annually. Alternatives include improving electronic services, especially self-service delivery channels with employees to help members.

In just two or three years, mobile banking is predicted to dominate financial services. Financial services professionals have adhered to the traditional business model that relationships had to be built on a face-to-face interaction at a branch.  Facebook and other social media have countered this dogma with the reality that relationships can be built electronically.

Declining fee income and margins, as well as regulatory pressures and increasing costs will cause a rethinking of the business model and branch development leading to smaller branches, more self-service and expanded duties for staff.

CUNA Council members are eligible to receive complimentary copies of this, and over 300 other white papers; non-Council members may purchase white papers for $50 per copy.

The paper is available online in the white paper section of