Channel Costs and Member Behavior
Today’s technology can process transactions, reach farflung members, and do more than ever was possible before. But new channels are costly, and it’s hard to support them without diminishing the use of other, even more expensive channels. This brief is the last in a four-part series that identifies and quantifies operational cost considerations and suggests ways to minimize expenses by making informed decisions. The other three briefs discuss item processing efficiency, balancing service with efficiency, and comparing branch delivery with other methods. The reports provide specific cost metrics based on analysis from real credit unions and offer suggestions for how to align the costs you incur with your organization’s strategy.
The research encourages credit unions to think first about the discipline required to make new channel investments pay off. New channels must increase efficiency and not simply add infrastructure, so the planning process for new channels must include asking the right questions early on. Prunty suggests several:
- Will this new channel increase our annual volume?
- If overall volume cannot be increased, what percentage of volume will move to the new channel?
- Will this new channel reduce other costs in the branch channel?
New channels may solve member pain points and improve delivery, but don't let them simultaneously raise your costs.