Posted by Mr. Dean Borland, SCMS, CUDE, VP Product Development, Credit Union Resources, Inc on 9/23/2016

A quick Google search of “the branch is dead” can help you with instructions on how to prune a dead / decaying tree limb, and you will also find that some people think financial institution branches are on track to follow the dinosaur into extinction. Read a little closer, and you will find that many financial services pundits do not believe the branch is on life support, but that a “transformation” is needed to sustain viability and complement the move toward increasingly greater use of digital / mobile technology.

Over the past several months, Credit Union Resources’ “Impact Group” of credit union leaders and three Premier Business Partners, LEVEL5, Diebold-Nixdorf, and CO-OP Financial Services, collaborated to explore the issues and opportunities of branch transformation. The study culminated at the 2016 Cornerstone Credit Union League’s Leadership Conference with an Impact Group review of review of how “transformation” can be leveraged into a variety of branch platforms. Here are the major take-aways from the study…

  • Branches will continue to be an integral part of an omni-channel financial services distribution network where members will continue to perform transactions and interact with Credit Union staff, but in ways very different from the “traditional” branch. The “branch of the future” will be a redesigned mix of physical structure and automated transaction fulfillment supplemented with expert human support provided by on-site staff and / or via video interface with a dedicated contact center.
  • The branch footprint will vary widely depending upon each credit union’s needs, membership demographics, and business model.
    • Large format facilities (5,000+ ft2) will host a staff of member facing personnel including subject matter experts for mortgages, investments, commercial accounts, insurance, etc. Drive-thru service will likely continue to be available with delivery via conventional pneumatic systems or using interactive, two-way video assist technology.
    • Smaller “community” branches (2,000-5,000 ft2) will mimic larger format deployments but within a smaller footprint.   “Universal bankers” will focus will focus primarily on member engagement. Semi-private and private “hotel offices” and two-way video will allow interaction with subject matter experts housed at other Credit Union facilities. Secure, 24-hour vestibules offer around-the-clock access to services.
    • Further downsizing will create 800-1,500 ft2 “micro” branches (likely in retail storefront space) hosting service similar to a “community” branch, but in an even more compact environment. Drive-thru capabilities will be site-specific, but secure, 24-hour vestibules will offer around-the-clock access to services.
    • Finally, credit unions may deploy fully self-service branches (footprints of less than 1,000 ft2) where members will have extended hour access to robust automated and two-way video-assisted transactions.
  • Modern branches will be retail centers leveraging digital signage to deliver standardized, flexible messaging and retail merchandising to reinforce the Credit Union brand. Nighttime LED lighting creates visual interest and awareness of the branch, making it stand out from its surroundings.
  • Fully automated or video assist self-service delivered through interactive teller machines (ITMs) may eventually replace traditional teller transactions. In the interim, automated cash dispensers and electronic journaling will simplify the mechanics of the teller transaction, freeing member-facing personnel to focus more on the member experience and less on the technical aspects of journaling transactions. Lobby automation manages walk-ins and guides members for quicker service delivery.
  • As branches transition from a transaction platform to sales and service platforms, the competency and skill sets of the member-facing employee will evolve. Electronic journaling of automated transaction fulfillment minimizes the need for member-facing employees to have “accounting” competencies, shifting focus to individuals with refined sales and service skills. Performance measures shift from “over-short and transactions per hour” to relationship measures like services per household and share of wallet.

After learning that a major newspaper had printed his obituary, Samuel Clemens (Mark Twain), reportedly quipped to a reporter, “The reports of my death are greatly exaggerated.” Projections of the death of credit union branches are probably exaggerated at well. But, it is true that the in-branch experience is in transition. In the future, credit union branches may look, feel and function much more like an Apple Genius Bar than a traditional paying and receiving transaction platform. The question may not be whether your credit union will make the transition, rather when your evolution will begin.

Thank you to the members and guests of the Credit Union Resources Impact Group, and to our partners, LEVEL5, Diebold-Nixdorf, and CO-OP Financial Services, for providing us, and you, with a glimpse of the branch of the not-too-distance future. 

Categories: Human Resources, Remote Transaction, Sales & Service, Strategic Planning & Consulting
Posted by David England, Senior Research Analyst, Cornerstone Credit Union League on 9/19/2016

It is often said that we live in a world where people want everything “now” and “at our fingertips.” While this might not always be true, it certainly is with Members getting accurate, trustworthy advice regarding their financial matters.  And, Members still prefer human interaction over automated/computer/robo advisors. 

Results from a recent study by GfK found that almost 40% of the respondents would pay more for the ability to talk to a person about help with their financial services.  Just to back this up, 45% said they would not be willing to forego live service in return for paying less. 

Trust is a critical component of our relationships with our Members.  Only 10% of those who participated in this survey said they would likely trust a computer algorithm more than a human to give them financial advice.  This was highest among those aged 25-34 (17%) and lowest among those aged 65 and older (6%).  Getting back to those who answered the question about trusting a computer algorithm more than a human to give them financial advice, 50% were unlikely to trust a computer algorithm more than a human (compared to the 10% who said they were likely to trust a computer more).

There is no age group where robo advising is preferred.  Credit unions can thrive on providing excellent financial advice and making that advice easy to get.  In the study mentioned above, 27% agreed that it was easy to get the information they need from the company’s website.  Another 26% disagreed.  Anything that is difficult for your Members to accomplish at your credit union is costing you money and Member defections.  So, make it easy to do everything with your credit union….in person, online, and everywhere else.


Be Trustworthy and

Easy to Do Business With


Some credit unions are using a “Member Effort Score” (MES) to measure how easy it is for Members to get things done at their credit union.  The research uncovers problem areas and specific solutions.  The value of improving your MES is:

  • Saving money (because you reduce costs by doing things right the first time).
  • Improve the bottom line (by decreasing costs and keeping more customers).
  • Increase long term growth (acquire more new Members via word of mouth and obtain more business from existing customers because you are easier to do business with).

Recent research on the MES as a metric is confirming that reducing a Member’ effort to the point that you are making it easy to resolve issues/accomplish transactions does more to retain customers than exceeding their service satisfaction expectations. 

We want it to be easy to get sound financial advice.  Fortunately, for credit unions, taking care of our Members is in our DNA.  But, if we search hard enough, we can do it even better!  Your Members will show their appreciation by staying with you and perhaps giving you a larger share of their business!

Categories: Marketing & Printing, Research, Sales & Service, Strategic Planning & Consulting
Posted by Mr. Idrees Rafiq, Jr., AVP IT Consulting, Credit Union Resources, Inc on 9/16/2016

Although similar in nature, external vulnerability assessment testing (VAT) and penetration (PEN) testing are quite different. Both identify security vulnerabilities on the perimeter of a network that a hacker would be able to use to compromise the credit union’s network. The differences reside in scope, price, and frequency requirements.

When describing the differences to credit unions, I like to use the analogy of testing the security of a physical branch. A VAT would be similar to me walking around the branch, pulling on doors, windows, and roof hatches, making sure they are locked and secured. Should the employee entrance/exit door be unlocked, I would report that back to you and let you know that I would be able to break into your credit union via that door. A PEN test would be similar to me doing the same walk-around; however, I would actually go into the unlocked door and try to steal confidential information and other assets before setting off any alarms. A penetration test is an ‘ethical hack’ while the VAT simply identifies a vulnerability in a network that a hacker would be able to exploit from the outside (i.e. open ports). Because the vulnerability assessment tests are less intrusive, the price is more palatable for credit unions.

The NCUA recommends credit unions perform VAT’s anywhere from weekly to quarterly and PEN tests anywhere from annually to bi-annually. The frequency of the tests are determined by several factors to include, but not limited to the budget, size and complexity of the credit union, and the deployment of multi-layered security as identified in the credit union’s information security risk assessment. 

Feel free to contact me directly ( if you would like help determining if your credit union is taking proper proactive security measures, ensuring you will satisfy examiners, or not wasting money on needless testing!

Categories: Compliance, Technology Consulting & Compliance
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