New Markets + Digital Transformation = Growth at Lower Cost - Blog

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New Markets + Digital Transformation = Growth at Lower Cost


New Markets + Digital Transformation = Growth at Lower Cost


BIG Consulting has developed a new hybrid branch and digital banking model for credit unions entering new markets.


We can rock your world with this model and help you cut the breakeven point in half for a new market! It’s complicated, but it will work.


A new era of digital services


Credit unions have entered a new era of growth and success. Charters are opening up, digital transformation has taken root, individual brands have grown, new leadership is pushing performance, and bank acquisitions are replacing merger options. Look for a blog article on that last point soon! Nearly a third of the US population is banking at a credit union.


Credit unions need a new model for expansion that throws out much of what we have known in the past and which is based on a strategy that uses today’s tools of digital marketing, channels, CRM, data analytics, peer networks, digital lending and agile for expansion.


After reviewing numerous strategic plans and talking to both senior executives and board members, I can only come up with one conclusion. Which is that new market growth still equals branches in most leaders’ minds. This is just wrong!


Market data shows 6% of the bank branches closing. Worse yet, banks are selling as quickly as they can. Branch networks aren’t creating value, because they can’t be sold to other banks. Meanwhile, the younger generations are flocking to direct and neo banks. The chart from The Financial Brand below show these trends.




There are Other Options!




There is a better way. A strategic solution where branches are not abandoned, but are minimized. Where digital becomes the prominent service channel. A hybrid digital and branch strategy firmly grounded in building a brand in a new market and serving members at a level that supports the credit union member value proposition. The solution is to create a direct credit union model supported by a few (very few) branches. A hybrid new market model!


The 8 Key Ingredients to a New Hybrid Model


The world has changed. The future is a retail financial marketplace dominated by digital services founded on rich data. There is no escaping this reality and any large bet on branches is risky!


Each credit union’s growth strategy should be based on a transition to a “mobile and direct banking first; branches second” strategy, rather than the other way around.



  1. Create a hybrid direct credit union (banking) model.
    1. Use the successful strategies employed by direct and neo banks in order to first serve the Millennials and Generation Y, and then all other generations.
    2. A hybrid direct and branch growth strategy is substantially less expensive and will yield faster growth and market expansion.
  2. Creating market awareness through digital will be the primary driver of eventual market share growth and financial performance.
  3. The use of data-driven direct and digital marketing is the most effective, and least expensive, way to reach the new broad markets.
    1. Traditional marketing will support digital marketing, but digital should be the primary spend.
    2. New marketing approaches based on what is working in the digital space should be prioritized.
    3. Experimentation with new marketing strategies will be important to find the right message, medium and solutions.
  4. Data-driven decisions are crucial in a market with more variables than can be easily assimilated. Data is fuel for speed and adaptation.
  5. Identifying the “wow” products based on best-in-market price is the foundation to winning growth and brand strategy. You have to make a name for yourself in the market to move market share.
    1. Use your price advantage to attack!
    2. Provide extraordinary service to grow into a multiple-product and profitable relationship.
  6. Agility is the only productive strategy in a new market.
    1. Accept what you dont know and build a process around urgent learning. Learning wins in a changing world.
    2. Fast reactions do not create additional risks. The risks are already there. Understanding and managing the risks defines the winners.
  7. Culture trumps strategy every day. Recognize the problem and solve for it.
    1. Culture is the biggest obstacle to an entrenched and successful business. Setting up a new operation outside of the current branch culture may be necessary.
  8. Speed kills. Speed wins. Honor it with an agile organization that has clear accountability for the entire new market – marketing, lending, etc.



BIG Consulting will help you take your current strategy and morph it into a hybrid new market strategy that will achieve the growth you desire in half the time of your current branch growth goal. We will review and assess your unique member value proposition, branch strategy, marketing strengths, digital and data strategies/roadmap, culture, financial performance and create a new market growth plan that ensures you meet both the digital and in-person service needs of your membership.



About the Author

Kirk Kordeleski

Kirk Kordeleski

Chief Strategy Officer

Best Innovation Group

Strategy & Growth, Digital Transformation, Lending, Payments


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