Why do Credit Unions Operate more Advanced Branch Networks than Banks?

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17 September 2010


  • Bob,

    Interesting thoughts. Another way of looking at this is that CUs tend to be heavily obsessed with automation, and may in fact implement technology for technology's sake. Your thoughts regarding less competition for capital expenditures are valid, but I would add that the typical CU has less board oversight and thus more freedom at the management level to acquire technology. Finally, with the overall decline of checks - and especially consumer checks - you have to wonder if further teller line automation makes sense . . . the typical consumer is less likely to have any checks (payroll, personal, or otherwise) than at any time in memory, and thus the traditional reasons for visiting a branch (making deposits, cashing a check) are rapidly going away. In the presentation I'm currently doing on "The Future of the Branch" I make the point that all FIs need to carefully assess the current levels of activity in their branches, and begin measuring trends in order to identify how consumers and businesses are changing their banking habits.

  • Another thing I note in the results are that the CUs seem to be significantly ahead in what might be referred to as "transactional" technology (cash dispensers, automated origination systems, etc.). I would guess that would be to enable their branch personnel to have more time for consultation, cross-selling, upselling, etc. but the technology investments for those capabilities (CRM, analytical, etc.) don't reflect that. Is it just that CUs are more interested in doing more transactions faster or that the branch operations budget is easier to approve?