By Hal Tilbury

Published on Credit Union Journal on January 8, 2016

Every day, I see another article about branch transformation, or the "branch of the future." Overall, branch traffic is dwindling and the mix of functions is shifting. More branches resemble retail stores or coffee shops, and floating tellers and universal employees are talked about—as if any employee could be a teller one minute and a loan officer the next. The news would have us believe this is a new trend, except that we can remember WAMU reinventing its branches a decade ago. And since one of every credit union's greatest assets is the personal loyalty of its members, concern about the right way to do efficient branching is natural.

At the same time, most of us are proactively building transaction-ready mobile and self-service channels as alternatives or extensions to branches. These external channels have lost their status as competitive differentiators. The younger members we all want to attract simply expect it. Millennials in particular are quickly reaching financial maturity; they need loans, savings, mortgages and other services, and according to the U.S. Chamber of Commerce will soon outspend the baby boomers. Since these 80 million millennials constitute 25% of the population, their choice of financial institutions is key.

Competition to capture and maintain the member base has never been more intense. Nontraditional providers are encroaching on credit unions by delivering convenient services, and not only to the underbanked. In its most recent survey, Accenture found that 72% of all North American retail bank customers said they would be likely to use at least one existing non-financial telecom, retail or technology provider, predicting that 35% of the industry is currently at risk for disruption by these companies.

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