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A Multi-Channel Strategy for Banks

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Yaël Levey

A deck looking at what Multi-channel means, the implications for the banking industry, why its important, how to get banks from zero to multichannel, and important considerations.

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MULTICHANNEL STRATEGY FOR BANKS YAEL LEVEY BAD 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: Static Physical and tangible Ads Brochures Newsletters Example touchpoints: Interactive Constantly updated Website Mobile app Tablet app Social media Emails ATM Example touchpoints: Human People Contact centre Branch Example touchpoints:
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.uk The Post Office FOCUSED QUICK CASUAL EXPERT Customers use different channels for different behaviours Carrier 12:00 PM Page 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
Why is Multi-channel Important? 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. Why is Multi-channel Important? 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. Why is Multi-channel Important? 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. Why is Multi-channel Important? 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 channel functionality Building a middle ground 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 for common end-to-end sales & journeys for each channel 3. Standardise information and align systems across channels 4. Enable customer journeys across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance
Building a middle ground 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 channel functionality 3. Standardise information and align systems across channels 4. Enable customer journeys across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance 2. Meet industry standards for common end-to-end sales & journeys for each channel
Building a middle ground 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 channel functionality 2. Meet industry standards for common end-to-end sales & journeys for each channel 4. Enable customer journeys across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance 3. Standardise information and align systems across channels
Building a middle ground 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 channel functionality 2. Meet industry standards for common end-to-end sales & journeys for each channel 3. Standardise information and align systems across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance 4. Enable customer journeys across channels
Building a middle ground 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 channel functionality 2. Meet industry standards for common end-to-end sales & journeys for each channel 3. Standardise information and align systems across channels 4. Enable customer journeys across channels 6. Formalise the process of evaluating channel performance 5. Proactively guide consumer's choice of channels
Building a middle ground 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 channel functionality 2. Meet industry standards for common end-to-end sales & journeys for each channel 3. Standardise information and align systems across channels 4. Enable customer journeys across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating 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 YOU YAEL LEVEY @YAELLEVEY

More Related Content

A Multi-Channel Strategy for Banks

  • 1. MULTICHANNEL STRATEGY FOR BANKS YAEL LEVEY BAD ROBOT DESIGN
  • 3. 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: Static Physical and tangible Ads Brochures Newsletters Example touchpoints: Interactive Constantly updated Website Mobile app Tablet app Social media Emails ATM Example touchpoints: Human People Contact centre Branch Example touchpoints:
  • 4. 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
  • 5. 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
  • 6. Googlehttp://postoffice.co.uk The Post Office FOCUSED QUICK CASUAL EXPERT Customers use different channels for different behaviours Carrier 12:00 PM Page Title http://www.domain.com Google
  • 7. Business areas that a Multi-Channel strategy can help Customer initiation Self-servicing Sales & Marketing Look & Feel Security Branches Customer Support
  • 9. 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
  • 10. Why is Multi-channel Important? 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
  • 11. 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. Why is Multi-channel Important? 2. Channels can be optimised for the Customer
  • 12. 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. Why is Multi-channel Important? 3. Channels can be leveraged to better understand customers
  • 13. 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. Why is Multi-channel Important? 4. Mobile customers are a larger source of profits
  • 15. 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
  • 16. 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.
  • 18. 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
  • 19. 1. Differentiate channel functionality Building a middle ground 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 for common end-to-end sales & journeys for each channel 3. Standardise information and align systems across channels 4. Enable customer journeys across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance
  • 20. Building a middle ground 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 channel functionality 3. Standardise information and align systems across channels 4. Enable customer journeys across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance 2. Meet industry standards for common end-to-end sales & journeys for each channel
  • 21. Building a middle ground 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 channel functionality 2. Meet industry standards for common end-to-end sales & journeys for each channel 4. Enable customer journeys across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance 3. Standardise information and align systems across channels
  • 22. Building a middle ground 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 channel functionality 2. Meet industry standards for common end-to-end sales & journeys for each channel 3. Standardise information and align systems across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance 4. Enable customer journeys across channels
  • 23. Building a middle ground 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 channel functionality 2. Meet industry standards for common end-to-end sales & journeys for each channel 3. Standardise information and align systems across channels 4. Enable customer journeys across channels 6. Formalise the process of evaluating channel performance 5. Proactively guide consumer's choice of channels
  • 24. Building a middle ground 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 channel functionality 2. Meet industry standards for common end-to-end sales & journeys for each channel 3. Standardise information and align systems across channels 4. Enable customer journeys across channels 5. Proactively guide consumer's choice of channels 6. Formalise the process of evaluating channel performance
  • 26. 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
  • 27. 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
  • 29. 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