BY MEREDITH DEEN
If your credit union has outdated and inefficient branches, figuring out what to do with them in this mobile age is a major dilemma. This is especially true for small CUs lacking the financial resources to replace them.These action steps will help you transform your obsolete offices into profitable arenas.
As financial institutions (FIs)seek to reduce expenses and as consumers use branches less and mobile devices more for everyday banking, FIs are confronted with a conundrum: what to do with all those large, outdated and inefficient offices.
It’s an issue whose answer is not as easy as simply replacing the old branch with a brandnew, smaller footprint and more efficiently designed location. Closing these older and fully depreciated offices isn’t an option for many given the tremendous cost to replace them.
A Codigo study titled “2015 Branch Transformation Report” shows most institutions are hesitant about adding new branches, and 65 percent of those adding offices are FIs above $1 billion in assets.
So what most smaller banks and credit unions are often left with are offices designed for banking operations that meet consumers’ needs from days gone by. In the past, banks and credit unions required enough branch space to accommodate a large teller staff, extensive filing cabinets, bankers’ desks and more. Now with the number of daily branch transactions falling, space needs are a fraction of what they used to be. This tendency creates in efficiencies and offices that are simply an eyesore.
The Codigo study indicated, however,that smaller community institutions are now getting busy. They are responding to the problem by focusing resources on adapting current locations to comply with the banking demands of today’s consumer. In fact, 51 percent of smaller banks and credit unions are remodeling a branch now through 2016 compared to 26 percent in 2014.