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Filene Report On Channel Delivery: Branches Still Important
MADISON, Wis. (11/6/13)--While credit union members increasingly use digital channels for low-value transactions and finding information, they still prefer to receive financial advice in branches, according to a new report from the Filene Research Institute.
Branches must be more efficient, and branch leaders must be free to focus more time on high-value behaviors such as advice, product sales, and resolving complex issues, said the report, "Channel Delivery for Tomorrow," which was co-sponsored by the Pennsylvania Credit Union Association.
Despite steady use and preferences for branches, the strongest growth right now is in mobile and online services. That growth, coupled with the cost advantages of distributing information and low-value transactions in digital channels, means credit unions need to seek out and adopt digital channels. Those that do not will not be compelling enough to be the primary institutions for the millennials and digital natives who are now choosing their institutions, the report said.

While credit unions can make gradual changes with current members, it is easier to start migrating new members to preferred channels. The report offers three ways to do that effectively:
  • Offer positive incentives for using the preferred channel (or, sparingly, disincentives for the less preferred). Consumers in one survey would be willing to switch channels for interest rate bumps on loans or deposits.
  • Set positive defaults to encourage preferred channel usage. When members are opening accounts or making changes, set up electronic communications as the default while informing them that they can switch out of the default if they like, the report advised. Most never will. Consider a fee schedule that offers service tiers, with "unlimited, anytime, anywhere" options as the most expensive.
  • Provide a technology concierge to walk members through their first interactions with low-cost channels like mobile and ATM. An initial human demonstration will assuage concerns and prove to most members that electronic channels are often more convenient and faster.
Credit unions must match the right transactions with the right channels to be sustainable, the report said. Good strategy acknowledges trade-offs, and credit unions cannot afford to invest equally in every channel. Most credit unions should focus strategically on digital channels, which will only increase in importance for attracting and retaining members in the next three years.

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