2013Q3 – CU Data Visualization Extravaganza! Branches

The nature of FI branches is a hot topic right now. Many are discussing the demise of branches, the reemergence of the same, and the plethora of technology that should go into the modern branch. Oh, and the talent and process to support customers. That is why this post considers the status of credit union branches.

Histograms

A little on histograms will go a long way in reviewing the dashboard below. Histograms show the distribution of a population over a given metric. We’d like to thank SNL Financial for the data.

Number of Credit Union Maintained Branches (for institutions having less than 20 branches)

04 - Number of CU Maintained Branches (20 branches) - Histogram Dashboard

Build a branch? Move a branch? Maintain a branch? Kill a branch? These questions are floating around the industry these days. Some of our peers absolutely believe that branches should go away with the investment directed towards other channels. Check this blog post out by our friends over at Optirate. It raises some very interesting questions based on sound research.

The graphic above demonstrates that the overwhelming majority of credit unions have very few branches. This group, which is represented by credit unions having less than 20 branches, comprises the vast majority of credit unions. The questions are tough ones for this group. There likely needs to be some optimization work done once you get to the 10-branch threshold. Below that, there may be branches that just need to be shuttered. They’re not carrying their weight. No studying, no analysis. Shutter.

Will branches go to zero? I don’t think so. Not in my lifetime and perhaps not in my daughter’s. I think an environment with zero branches likely drives the entire industry towards a much smaller number of institutions. Technology is a commodity. In our way of thinking, more so than brick-and-mortar channels. The guidance: Be careful what you ask for because ultimately it all leads to a very limited group of players, an oligopoly of sorts.

Number of Credit Union Maintained Branches (for institutions having 20 or more branches)

05 - Top CUs - by Asset Size (# of branches greater than 20) - Histogram Dashboard

 

The group above – those credit unions with 20 or greater branches – is a small group. Some might say it is an elite group. The burden of optimization is the greatest at this level. Systems and talent are more complex, more dynamic at this stage. However, there must be the added burden of looking at acquisition along with optimization should the individual credit union’s culture and focus permit it.

There are 107 credit unions in this group. The size of the circle represents the number of branches as compared to the others. The color gradient represents asset size. This group, though larger, still lacks elements of scale if you look at the group without considering other dynamics (e.g., market size, membership diversity and size, merger history, etc.).

We hope these dashboards have raised some questions and perhaps answered some questions. If you need to dash, and don’t have your own board on which to make it to shore, then do give us a call. Custom reconnaissance, analysis, and direction are just a click away.

No. Really. Just click here.

We thank you for your patronage. Happy holidays!