Branches or Digital? We’re Asking the Wrong Question

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Over the course of the last 25 years, our family has moved seven times. My 14-year-old daughter MacKenzie only remembers the last two. We are an adventurous bunch, yet each of us has a strong sense of home and community. Community matters, and while its definition has evolved tremendously over time, our physical presence and the homes we create together ground us.

During our time in Madison, Wisconsin, we experienced our community vibrantly. Our neighborhood was filled with people who wanted to be a part of one another’s lives. One set of neighbors hosted several concerts in their backyard throughout the summer. There was an annual block party, and each household knew their role and responsibility for bringing the time together to life. Our Halloweens included kiddos getting dressed up and enjoying pizza before heading out. Parents walked behind them, chatting as the trick-or-treating unfolded over blocks and blocks. Even though we were newer to the neighborhood, our weekly Sunday grilled pizza plans became a fabric with those we met. The traditions, time spent, connection, and commitment made our physical space home, and the people who lived there made that possible.

This week, our Community Financial Credit Union team broke ground on our second branch location in Detroit, Michigan. The groundbreaking brought together city leaders, community members, partners like our friends from NINE design and homes , and our team. Instead of golden shovels, we had toy earthmovers, and kiddos helped us celebrate this important moment as we create a space to walk with human beings toward their impossible dreams. We cannot wait to become a part of this neighborhood.

Over the past few weeks, I’ve enjoyed conversations with partners who often ask, “What are you up to?” and “What are you excited about?” As I’ve shared the story of our groundbreaking, each of them to a person has remarked, “You are investing in branches?!?! Hmm.” I appreciate the surprise and understand the underlying skepticism. In today’s world, with technology, digital experience, and artificial intelligence growing rapidly and taking up so much of our mind share, many envision a strategy devoid of physical spaces. As with many things in life, two things can be true at once.

Unlike other financial institutions, credit unions generally have not “over-branched,” so our physical footprint has room to grow. For Community Financial Credit Union, we partnered with LEVEL5 to analyze our current locations and identify spaces that might make sense for our business, with a particular focus on growing deposits. That analysis also included a commitment to underserved communities and underbanked areas. As a cooperative financial institution, we have a commitment to “do well to do good,” and our branch strategy activates our vision.

Physical locations play an amplifier effect on brands. That is extremely important for credit unions. According to “Online holiday shopping might be easier, but customers still love physical stores. Here’s why.” by Allison Sylte from Colorado State University ’s College of Business, “Physical stores increase brand awareness and affinity. Customers view branded environments, receive personalized service and participate in events.” Sylte goes on to say, “…physical stores build brand awareness and trust, which makes customers more comfortable buying online.” This is also imperative for credit unions that have not historically invested heavily and early in digital experiences. Our physical presence and digital experience can build upon one another and grow together to enable member experience and shift the perceptions of credit unions as being less sophisticated than other choices.

The type of interaction a member needs influences the necessity of a digital or physical engagement or a combination of the two. According to California Management Review’s, “Leveraging the Physical Store to Boost Customer Value – Providing the Right Engagement at the Right Time” by Zhang and Neslin, “Purchasing deep products in the physical store increases customer value more than any other product/channel purchase combination.” For a credit union these “deeper products” include home loans, a first loan, or an investment.

Additionally, physical locations show a commitment. According to Vibrant Vision Studios’ “Why Having a Physical Location for Brand Still Matters,” “Physical shops anchor businesses within their local communities. They foster relationships with neighbours, participate in local events, and contribute to the area’s economy. This community engagement can lead to loyal, repeat customers who prioritize supporting local businesses.”

Belonging is our foundational value at Community Financial Credit Union. Our commitment to Michigan and the individual communities we serve must build belonging. According to the National Civic League’s “Engaged Communities are Thriving Communities,” Lipscomb states, “With so many time demands on residents these days, it’s crucial to make engagement easy and less time consuming. By meeting residents where they go for other needs, local institutions can maximize their outreach and make good use of residents’ time. To gain more input from different voices, strategies that physically meet residents is necessary.”

With so much at stake as credit unions work to showcase their relevance and importance for American consumers at a time when people need cooperative financial institutions more than ever, let’s challenge the question. The debate might be turned on its head. All of us know how much community matters. Our credit unions can be a community for our members. The community we bring to life will be physical and digital, and our organizations must invest in both to ensure our members have access to the resources we bring to life.

We left Madison in the spring of 2018. Today, MacKenzie remains virtually connected to friends from our time there. Community comes to life through physical locations and our traditionally defined “in real life” connections. It also sustains and grows virtually. Our credit unions can build community digitally and physically. Both matter to our members and our future strategies.

This week marked a Community Financial Credit Union milestone. I felt goosebumps as our team came together and watched the next generation break ground in Detroit. I can picture the impact we will make as the branch opens and we learn together with our neighbors about the needs we can support. Whether our members wave at us as they use our mobile app, transfer their direct deposit in minutes via our newest technology partner, Atomic, volunteer with us as we support new roofs in the Fitzgerald neighborhood, or they stop in to learn more about our CloseEnuff? cashflow options, we will be part of Detroit’s future. Our shared community future shines brightly.

How will your credit union support tomorrow’s communities?