A Multi-Channel Strategy for Banks

MULTICHANNEL STRATEGYFOR BANKSYAEL LEVEYBAD ROBOT DESIGN

WHAT IS MULTICHANNEL

What is Multi-channel?

Multi-channel retailing is the use of a variety of channels in a customer's experience. There are 3

types of channels:

StaticPhysical and tangible

AdsBrochuresNewsletters

Example touchpoints:

InteractiveConstantly updated

WebsiteMobile appTablet appSocial mediaEmailsATM


HumanPeople

Contact centreBranch


51% of smartphone owners have used mobile banking in the past 12 months

59% of multi-channel financial interactions began on a smartphone. 56% then moved to a computer

38% of multi-channel financial interactions began on a computer. 53% then moved to a smartphone

46% of customers have used a branch, ATM and online banking in the past 6 months. These customers

generate an estimated $155 in profit than people who don't use all of these 3 channels

Customers that use mobile banking also use other channels more frequently than the average customer. While

more customers are using digital channels, they aren't abandoning traditional channels at the same pace. (Gallup)

How customers are using channels

Source: Consumers & Mobile Financial Services Report 2014

FOCUSED QUICK

CASUAL EXPERT

⁃ Set budget goals⁃ Buy stocks⁃ Bill payments⁃ Apply for a mortgage

⁃ View stock portfolio⁃ Compare mortgage rates⁃ See spending patterns

⁃ View account balance⁃ View stock prices⁃ Payments

⁃ Consultancy

Customers use different channels for different behaviours

Googlehttp://postoffice.co.ukThe Post Office

FOCUSED QUICK

CASUAL

EXPERT

Customers use different channels for different behaviours

Carrier 12:00 PMPage Title

http://www.domain.com Google

Business areas that a Multi-Channel strategy can help

Customer initiation

Self-servicing

Sales & Marketing

Look & Feel

Security

Branches

Customer Support

THE IMPORTANCE OF MULTICHANNEL

Why is Multi-channel Important?

1.

Channels are differentiators

2.

Channels can be optimised for the Customer

3.

Channels can be leveraged to better understand customers

4.

Mobile customers are a larger source of profits


One of the biggest problems facing retail banks today is their inability to

stand out in an increasingly commoditized and competitive marketplace.

Channels can still be leveraged by banks to distinguish themselves from

the competition. While customers’ perceived importance of products and

services has remained relatively flat between 2011 & 2013, that of

channels, especially the mobile, has seen a significant improvement.

1.

Channels are differentiators

Instead of focusing on creating identical apps & websites for different

devices, think about the different attitudes, behaviours & situations of

the consumers using those different devices.

Banks successful across multiple channels will build specific apps for

specific attitudes and then link those apps in one journey. Exchanging

data and making a seamless switch between channels increases the

likelihood of completing an application or sale significantly.


2.

Channels can be optimised for the Customer

Banks are in an unequalled position to understand their customers.

They already can see product use, transaction patterns and demographic

profiles. By leveraging channel usage insight, they can develop an even

more detailed customer profile. Understanding not only what the

customer looks like, but also how they conduct their banking can allow for

improved product offers using their preferred channel.

By analysing the activity and preferences of their client base, banks can

tailor offerings to address the priorities of each individual

customer.


3.

Channels can be leveraged to better understand customers

It is also important to think about the revenue and cost saving

implications of developing a cross-channel strategy.

Wells Fargo reported that customers who use four channels are 1.8

times more profitable than customers who use one.

Banks should be treating mobile customers differently as they are a

larger source of profits.


4.

Mobile customers are a larger source of profits

MULTICHANNEL STRATEGIES

Multi-channel strategies so far

OMNI-CHANNEL

What:Consistent, integrated services across all channels,

and encouraging customers to self-select channels

according to personal preference

Problem:Consumers have little incentive to choose one

channel over another. Banks are faced with

increasing complexity and costs without the customer

experience benefits desired.

Example:

What:Custom applications per channel and improved

service through varied channels

Problem:Leads to banks adding layers of complexity and costs

while trying to maintain a high level of customer

service.

Example:

MULTI-CHANNEL

Custom applications and

improved service through

varied channels

MULTI-CHANNEL OMNI-CHANNEL

Integrated services across all

channels, and encouraging

customers to self-select

The middle ground

THE MIDDLE GROUND

Understanding the different attitudes, behaviours & context of customers using different devices

Optimising channels & touch points for those behaviours

Differentiating channel functionality in order to incentivise and guide consumer's choice of

channels.

A MULTICHANNEL ROADMAP

1. Differentiate

channel functionality

2.Meet

industry standards

for common end-to-end

sales & journeys for

each channel

3.Standardise information and align systems across

channels

Building a middle ground

4. Enable

customer journeys across

channels

5.Proactively

guide consumer's choice of channels

6.Formalise

the process of evaluating

channel performance

1. Differentiate



Customers don’t demand a wide range of choice of channel. Rather, customers are often confused by the increased choice and prefer

whichever channel requires the least effort. By simplifying offerings & tailoring channels to serve specific needs, organisations can

specialise channel functionality, reducing costs & complexity and improving the overall customer experience.

This first step prioritises the main strengths of the channel on the appropriate device but also makes sure that everything can be done.

Differentiating channels requires assessing the customer’s channel preferences and aligning these against the channel capabilities,

cost to deliver and the potential for a positive customer experience.

2.Meet

industry standards



each channel


channels

4. Enable


channels

5.Proactively


6.Formalise


channel performance


Customers should receive in-channel excellence across the major customer touch points.

The first step is for banks to meet minimum industry standards for common end-to-end sales and service transactions for each

channel, be it ATM, branch, call centre, Web and mobile.

1. Differentiate



channels

4. Enable


channels

5.Proactively


6.Formalise


channel performance

2.Meet

industry standards



each channel


Customers need to have consistency across channels.

Once industry standards have been met in each channel, banks then need to standardise information and align systems across

channels, as well as develop a uniform look and feel, branding and messaging (e.g., product information, disclosures and terms,

product pricing and offers).

1. Differentiate


2.Meet

industry standards



each channel

4. Enable


channels

5.Proactively


6.Formalise


channel performance


channels


Once information has been standardised and aligned across channels, the next stage is for seamless multichannel integration to become

a reality, and for banks to enable customer transactions across channels.

Customers should be able to start a sales or service transaction in one channel and complete it easily in another. If a customer filling out

an online credit card application has some questions, he or she should be able to dial the call centre and have the representative view

the application and help finish it.

1. Differentiate


2.Meet

industry standards



each channel


channels

5.Proactively


6.Formalise


channel performance

4. Enable


channels


Banks should proactively guide customers to the channel(s) that will enable them to accomplish each task with minimum effort. Done

well, the process will guide the customer to the lowest effort channel while still satisfying the customer’s desire for choice.

To do this, banks can identify common service triggers and step in at these points to preemptively guide customers to the best-fit

channel e.g. promote appointment booking when a customer is completing a mortgage application so that customers know they can

complete in-branch with expert advice.

1. Differentiate


2.Meet

industry standards



each channel


channels

4. Enable


channels

6.Formalise


channel performance

5.Proactively



Banks should create a formalised process to evaluate their channel performance. An exit survey could be a good assessment of

customer satisfaction with new channel experiences.

The purpose of this measurement process is to continually reassess and improve channel functionality that will lead to reduced costs

and duplication of efforts as well as a better customer experience.

1. Differentiate


2.Meet

industry standards



each channel


channels

4. Enable


channels

5.Proactively


6.Formalise


channel performance

BUSINESS CONSIDERATIONS

CONSISTENT CUSTOMER DATA

All channels should have a common, consistent set of customer data. This is achieved through use of a single customer data warehouse & repository for product info.

For instance, there should be a single content management system, and data should be integrated across channels, business units and products.

To enable multichannel consistency, bank staff in all channels must have a comprehensive view of the customer. They should be able to track customer interactions across all channels. Call centre and branch staff should have access to customers’ activity on the bank’s Web site, and should be able to make the same offers to customers that they have seen online.

A single, common marketing engine provides targeted and consistent customer messages across channels.

This prevents frustrating disjointed or repeated messages coming to customers from different channels.

A common application engine across products and channels will ensure that all channels are requesting and capturing the same customer information.

This results in less work for customers, and minimises complications for the bank when customers start an application in one channel but complete it in another.

IT Considerations

COMPREHENSIVE VIEW OF THE CUSTOMER

TARGETED CUSTOMER MESSAGING CAPTURING CUSTOMER INFORMATION

Other business considerations

Retail branches serve as the primary sales channel for many banks.

A multichannel approach will shift this balance, with branches likely to experience a reduction in customer traffic & sales volumes.

Banks should ensure that investments can be made across channels and products, and that investment in each channel maintains parity with peers.

Any upgrades and investments made in one channel will need to be integrated within the context of multichannel strategy.

Performance measurement & incentives are often set around sales targets through a specific channel.

Each channel needs to have targets, but a line of employees need to work toward driving customer interest regardless of which channel is used to complete the transaction.

SHIFT IN ROLE OF BRANCH NETWORK INTEGRATED CROSS-CHANNEL INVESTMENT

MODIFICATIONS TO PERFORMANCE MEASUREMENT

THE FUTURE?

The Future of Banking?

Contextual

Customer-Centric

Less intrusive authentication

Social connectivity

Crowdsourcing

Hyper-personalisation

Frictionless

Customising financial data and

personalising interfaces for

varied consumer segments

A renewed focus on simplified

authentication (using multiple

forms of biometrics and

contextual assessments, from

proximity and voice-vetting to

login patterns)

Further social media integration

e.g. Facebook Banking

Offering service alternatives

through proximity awareness

Actionable notifications that

prompt users through their

mobile device to move money

or pay bills to avoid fees or to

better manage their current

account spending

Continuous assessments of

financial wellness that prompt

the consumer to take a specific

action after a transaction, like

filing a taxi receipt as a business

expense

Delivering daily or on-demand

personalised information around

the customer’s financial health

and aggregated account status

THANK YOUYAEL LEVEY@YAELLEVEY

Design

A Multi-Channel Strategy for Banks