Banks to go multi-channel

We may be on the brink of ‘multi-channel banking’ – let’s see if the Banks can catch up with the Grocers…

A new research report says UK & US banks are in danger of losing online customers unless they improve the levels of personalisation and communication offered. The report from Gartner says people in both countries are heavy users of online banking and over 40% use at least two banking sites, meaning they are in a position to compare features.

The trends observed are interesting:

• Younger respondents value features that enable customisation of their online banking experience and are looking for additional financial planning tools to help them manage their money more effectively
• Older customers seek tools that let them use current services more effectively or communicate better and want features that make the online banking channel itself easier to use

Banks can learn from the Grocers:

Retailers have spent ten years working out how to build successful e-commerce businesses and in the last three years have been moving that to a multi-channel mix that involves services like ‘ring & reserve’, range extensions and of course online order tracking.

Banks seem to have been asleep at the wheel, it’s taken them an age to react to the fact that customers are demanding more self-service and looking to manage many of their regular transactions online. But at last the Banks seem to be reacting now that the pressure is on:  There is much talk in the big banks of cost-cutting programmes – I’m told by those who should know that a key focus of this is about getting the optimum number and location of branches and getting those online services to deliver what customers want and need to take the pressure off branches and especially off call-centres.

 So we may be on the brink of ‘multi-channel banking’ – let’s see if the Banks can catch up with the Grocers, especially now that one of the Grocers is a Bank!

Surprise surprise, we want to manage our money online

It seems pretty obvious really but here’s some evidence if you need it…when asked what they want of their credit card accounts, this is what customers say;

-> 64% of people prefer to apply for credit cards online, only 20% would rather go to a branch
-> 68% also want to be able to manage their credit card account via the Web!

And it seems we take all this for granted assuming it will be there for us – rates and fees are still the most important criteria for customers when choosing a credit card provider;

-> 51% citing ‘no annual fee’ as the most important criteria
-> 46% citing interest rates
-> 40% said online account management was most important to them when choosing a card!

The web also seen as critical for finding information;

-> 78% of credit card customers use the web to research deals
-> only 11% visit a branch for credit card information and two per cent use the phone!

This is all from a survey by Global Reviews, they asked over 1000 people how they choose a credit card, the role the Internet plays in the process and what information and service they would like their provider to offer online.

The survey also ranks the credit card providers, with Lloyds TSB, Barclaycard and Egg performing well.

Leave your wallet at home, use your mobile

There’s been a long trail of activity in Mobile Banking & Payments over recent years and some banks would seem to be on the 2nd launch of mobile banking now – there is an upswell of focus on the mobile phone as a serious tool for payments and banking, with SMS and NFC featuring as the popular technologies.

That’s not so surprising when you remember 1) Mobile phones are poised to become the world’s first ubiquitous technology and 2) The cost to acquire customers means banks* are searching for the edge over the competition. But knowing there’s an opportunity and exploiting that opportunity successfully are two different things altogether.

In this wave of Mobile Banking initiatives I’m intrigued to see how the strategies of Banks, Mobile Operators and Retailers will unfold. I’m sure we will see more announcements like this one in the year ahead – I look forward to the fun of the game – who will be the key players and what tactics will they use to get ahead?

But I will close with two little warnings a)don’t lose sight of the fact that the internet is going mobile and so all your online investment can and should be leveraged not ignored when you get seduced by new technology standards for mobiles; b)mobile is one channel and in the customer’s mind it matters how you link that with your other channels so think that through before you get carried away in any one channel.

*Note: Not just banks, all consumer businesses are looking for an edge & many are competing with banks for the consumer relationship (by which they mean money)

Banking on the future

I had the pleasure of organising, hosting and facilitating a breakfast briefing session recently for senior online strategy people from the world of Retail Banking – most of the big banks were represented. What a fascinating online and multi-channel strategy session it turned out to be!

The theme was designing & delivering success online and the emphasis on learning from other sectors and new business models with case studies/opinions shared by two high achievers who’ve “been there done that” – James Alexander (Egg & Zopa) and Indira Thambiah (Argos).

My view of the opportunity for banks to design and deliver success has been fueled by the discussion on the day, the great thing is that there is loads of enthusiasm from within – that things can be improved and that the online channel must be viewed within the context of the multi-channel service offering – everyone attending said they found it thought provoking so hopefully new/improved services will follow.

I for one want to be a part of making that happen!