The development of banks' overall channel strategies has been anything but deliberate. Delivery channels have grown from need and technological advances, and banks' channel strategies have evolved in response. But now that financial institutions are juggling numerous channels and the multitude of ways in which they touch customers, many banks are actively looking to integrate those delivery channels more strategically.
According to an August survey from the American Bankers Association (Washington, D.C.), usage of the major delivery channels is decidedly split. When 1,000 consumers were asked what banking method they used most often, 32 percent said the branch, 26 percent said online, 26 percent said ATMs, 5 percent said the telephone and 5 percent said traditional mail (6 percent said other/none). But statistics on channel usage -- by age, gender and wealth, for instance -- abound.
Generally, current research indicates that the branch and the Internet are the key buying channels for banking products. A recent survey from Framingham, Mass.-based Financial Insights reports that the branch remains the most utilized channel, with almost 75 percent of consumers visiting a branch at least once a month. However, according to the survey, customers who use the online channel tend to have more interactions per month with their financial institutions: 25 percent log on more than 10 times per month.
According to research from Cambridge, Mass.-based Forrester Research, 82 percent of consumers still prefer the branch for opening a new account. Yet there is a strong difference in channel preference by age. Younger generations overwhelmingly prefer the online channel and are more likely to adopt online banking activities, Forrester reports.
The bottom line is that no channel is an island unto itself, says Karen Massey, a senior research analyst with Financial Insights' consumer banking and credit practice. "All channels are important to consumers for the specific purpose each serves," she writes in a new report from the research firm. As a result, Massey urges banks to invest in a consistent customer experience across all channels, including integration of real-time cross-channel data.
Seamless Customer Experience
The current focus in banking is on customer-centric, rather than product-based, strategies. And customers have strong demands. Consumers want to bank on their own terms -- they want access to their money anywhere, and they want it now, said Bart Narter, senior analyst, banking, Celent (Boston), during a recent BS&T webcast, "SOA for Multichannel Integration." "That has been a challenge for the banks," he noted.
Customers are spoiled by general retailers, says Jerry Silva, TowerGroup (Needham, Mass.) research director for retail banking and delivery channels. Some large retailers allow customers to order products online and then pick them up at the nearest store location, for example. But because of the way bank channels have been set up, with different products maintained in different silos and with no real interface to unite the systems, many banks haven't been able to deliver this level of service to their customers, Silva says.
"It's important for customers to feel like a bank really knows them," says Alex Hart, president and CEO of online banking solutions provider Corillian (Hillsboro, Ore.). The customer should get the same information at the ATM, the branch and online, Hart stresses -- there has to be consistency across those channels. At too many banks, he contends, that is not the case. "[Channel integration] is really designed to create a better user experience; it creates preference and differentiation," Hart says.
SOA for Multichannel Architecture
"Firms need to build integrated channels that facilitate customer information and process flows," said Peter Tebbenhoff, product marketing director for Palo Alto, Calif.-based business integration and process-management software provider TIBCO Software, during the BS&T webcast. "Only then will banks be able to achieve the operational efficiencies they had hoped for," he added.