Tuesday, March 30, 2010

Smarter Branching Strategy for Banks and Credit Unions

In today’s tough economic climate banks and credit unions need to find a way to leverage the “Network Effect" of multiple locations to boost deposits and find new customers and members. They need to do this by implementing a “Smarter Branching Strategy.”

Today there are a host of ways you can do your banking. While there are options online or on mobile devices to do much of your banking 92% of customers still use bank branches once a month. 85% of online banking customers still use the branch once a month.

Given the need to provide the convenience of more branches for your customers and members, there needs to be a smart growth strategy. In the current economic climate it is more important than ever to grow in a way that best control not only capital costs, but operating costs, and therefore minimize risk.

Currently one of the best options for growing branch networks is through the deployment of in-line or storefront branches. Since these are typically leased so they don’t require large investments in up front capital. They also allow for flexibility brought on by changes in an under-performing market.

Given the size of these branches, typically 1500-2500 square feet, design considerations should be made to leverage technology to provide for a more efficient operating model. Branch design layouts should also provide for maximum efficiency and effectiveness. Staff functions should be designed around an activity “core” rather than the conventional model separating and spreading out the functions. Institutions should also consider leveraging technology like Teller Cash Recyclers, which can speed up transactions, keep money secure and eliminate the need for teller drawer storage and reconciling.

One of the best ways to achieve this smaller branch quickly and efficiently is with a company like Branch Development Group and their Novobranch Packaged Retail Delivery System utilizing the time tested retail model of limiting the actual construction to those areas necessary by code, or the program, such as offices or secure rooms. The rest of the branch is then “fit-out” by bringing in all of the finish materials, flooring, millwork, fixtures, and specialty lighting over just a couple days time. Construction times are greatly reduced getting you into the branch up to 70% faster than a conventionally built standalone branch. 
Reilly Studios was fortunate to have collaborated again with Tim Ryan and Branch Development Group on the designs and packaged retail systems to be provided by Novobranch for financial institutions nationwide looking to cost-effectively expand their networks. 
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