COMMENTARY: For This Credit Union, The Hybrid Branch of the Future Is Already Here

Faced with changing customer preferences and bolstered with new technologies and fresh perspectives, banks and credit unions are redefining the future of the branch in a digital-first world.

The onset of the Covid-19 pandemic was a catalyst for advancing the digitally driven, contactless-capable, and hybrid branch. Now, more than two years later, the digital transformation continues as financial institutions face new challenges, including staffing shortages. In the branch, the ultimate promise of digital transformation is delivering an excellent, personalized member experience while leveraging sophisticated technology to automate more transactional tasks.

It’s important for financial institutions to implement digital technologies while still creating a seamless branch experience. Fiserv research shows that, in 2021, 92% of Millennials said they had visited a branch in-person in the past year. ATM usage is generally consistent from 2020 through 2021, though the research also shows that touchless features and ATM availability have become more important to consumers as demands trend  toward self-service options.

Customers and members have come to expect the latest technological conveniences both in the branch and on the go. In credit unions particularly, fintech innovation is playing an important role in the evolution of branch offerings.

Minnesota-based First Alliance Credit Union witnessed firsthand the impact of integrating digital tools into the brick-and-mortar consumer experience. When faced with an uptick in member demand for services, branch leaders needed to enable efficient and intuitive self-service tools for its members so staff could focus on relationship building and the credit union’s day-to-day operations.

The credit union implemented interactive branch kiosks, which enable members to conduct a variety of secure transactions quickly and easily without the need to interact with an in-person teller. The kiosks were also equipped with touch-free biometric palm-vein authentication to allow members to be quickly verified without having to use their cards or enter a PIN, making banking easier and faster.

“Palm-vein authentication is highly secure and convenient for our members,” said David Schouten, senior vice president of IT and chief operating officer at First Alliance. “All they need is their palm, and they’re in.”

Recent research from Raddon, a Fiserv company, finds that younger generations are more likely to use smart ATMs to complete more complex tasks than they could at a traditional ATM, such as opening and funding a new account or paying a bill, instead of relying on an interaction with a teller.

With members completing transactional activities at self-service kiosks, staff can focus on relationship-building interactions with members. “What the technology really does is enable our staff to have high-quality interactions, experiences, and relationships with our members. It takes away the mundane transaction processing and enables them to have fuller relationships,” said Schouten.

As more kiosks were installed, members quickly became acquainted with their capabilities and adjusted to the new machine’s functionalities. “We want to make sure we have the right tools for members wherever they are,” said Schouten.

By giving members options for managing their financial needs in the branch, First Alliance saw positive results from its staff’s heightened ability to grow business.

Today’s consumer is both tech-savvy and unwilling to wait to receive excellent financial services. Failing to deliver the speed and convenience expected may result in frustrated members looking to other financial institutions to meet their needs.

First Alliance has a message for any financial institution reluctant to go down the same path as it did, fearing challenges and unseen difficulties.

“One of the biggest misconceptions is that the adoption of new tech means we eliminate staff, which is not the case at all,” said Schouten. ‘Really, it’s about trying to change our staff’s responsibilities so it’s less about the transaction and more about the member interaction.”

As banks and credit unions of all sizes continue to invest in digital initiatives and automation to meet and exceed advancing consumer expectations, self-service options like interactive branch kiosks will be foundational to the future success of brick-and-mortar locations.

—Brendan Watkins is vice president for product management, banking organization, at Fiserv Inc.