Managing Bank & Credit Union Branch Facility Operating Costs
Branches can be an expensive part of the business, but a large percentage of new product sales happen there. With larger banks systematically closing branches, many intermediate and community banks see an opportunity for improved customer reach. However, understanding the right location, design, and cost of branches is important for the success of a branch bank strategy.
Intermediate Banks and Credit Unions can be caught in the middle – large enough to have multiple branches comprise a significant part of the operating assets and expenses, but too small to have dedicated property managers focused on these costs. The Strategic Facility Guide is dedicated to helping these organizations better organize and use data to manage their facility assets and operations.
Branch Bank Assets
Selecting locations and creating attractive branches designed to appeal to your customer demographics that fit with your overall “clicks and bricks” strategy is important for a successful branch bank facility. There is a lot of discussion in the industry right now about the nature of a bank branch facility. We understand this is a decision you need to make based on your organization’s strategy. Here are our thoughts on how to get started on your transition.
Branch Bank Operations
Having well maintained and operated branches is important for the image they present as well as the safety and comfort of your customers and staff. The property operating costs are important to manage (based on the designated service levels) because these are an ongoing part of your overhead. Any cost savings is accrued year over year and can be retained or used to make other improvements. Measures to reduce your building operating costs can provide financial returns of over 100%, far higher than other options in the market.
Facility benchmarking of your branches is a cost effective way to identify what your branch facilities actually cost you, how this compares to the industry, and which branches have higher costs (and therefore potential opportunities for reduction). More than this, it is really about identifying best practices using a continuous improvement process. Facility benchmarking has allowed many organizations to make process improvements and achieve substantial cost savings.
Here are a couple resources with more information about the potential of facility benchmarking:
View examples of the cost of bank branch premises for Intermediate and Large Banks and Credit Unions in NY.
View a presentation on 3 simple ways to reduce branch building operations costs with a benchmarking program.
Bank and Credit Union Facility Benchmarking Program
We are now offering a benchmarking program for banks and credit unions. This program uses a proven benchmarking system that has helped other organizations save millions in building operating expenses. This program includes:
- One-on-One Kickoff session. This session will provide an introduction and overview on how the benchmarking program works, the program schedule, and discussion of your key areas of interest. We can review examples of your available data to guide your staff with suggestions for how to proceed.
- Data assembly and entry assistance. We will provide MS Excel templates to help you organize your data and answer questions or provide minor data cleaning as requested. These templates will also provide some internal benchmarking results – comparison among just your own branches (cost savings opportunity #2 in the presentation above). The aggregated data can then be entered into our online system to anonymously compare your information with other participants (cost savings opportunity #3 in the presentation above).
- Optional* additional meetings/assessments. While the standard benchmarking program examines space and cost, some participants are interested in occupancy satisfaction surveys, high level facility assessments, and/or facility operations process reviews. *The details of these additional options need to be discussed on a case-by-case basis.
- Draft and final report. A draft report will be provided for your review, and a group webinar and/or meeting will be held to discuss questions and findings. After any revisions are made to the data based on the draft review, a copy of the final report will be provided.
- One-on-One Review session. This session will provide an opportunity for us to review and discuss your results, answer questions, and help you identify likely areas of opportunity.
- Optional* Best Practices meeting. A meeting is arranged for the group to allow interested participants to share and compare information, visit a facility of interest, and hear about best practices (subject to level of interest).
Questions? Check out our FAQs about this program.
Read the details of the program and sign-up now at: FacilityIssues.com/banking-institutions/