Changing Channels

When the first brick and mortar bank was created, bankers had just one customer touch point – the branch. Then came direct mail, the phone, ATM, online, and mobile channels. The new channels have created a scattering effect that is rippling across the industry: "In 2012, consumers in the US who opened financial products reported that they opened 37% of those products online, 2% by mobile, and 40% in a branch. Online sales have increased seven percentage points since 2010." [1] General adoption rates for mobile were above 40% in 2012 and is expected to increase to 50% by 2015.[2]

It's obvious what's driving online and mobile growth – the customers. As younger demographics mature and baby boomers become "tech savvy," they demand services that match their internet-driven lifestyles. At the same time, proclaiming the branch dead is hardly accurate, rather, it's being reinvented around the customer. Capital One 360 (formerly ING Direct) pioneered the hybrid coffee shop bank idea in 2001 while Wells Fargo rolled out a branch prototype in April 2013 where employees carry out customer transactions on Microsoft Surface tablets and accept digital images of checks.[3]

Out of Many, One

What's a bank to do? First and foremost, focus on the customer. Despite the multitude of channels, ideally, banks should have a single customer experience. We call this Channel Integration or Multichannel Banking.

When a customer walks into a branch, they should be able to enroll in the same accounts as when they sign into the bank's online channel. When an existing customer enters their ATM pin code, the same customized offers should appear as when a customer logs onto their mobile device. While many of these scenarios seem like a pipe dream and are not commonplace yet, some banks are already ahead of the curve as indicated by the following 2013 survey. [4]

  • Out of 19 major financial services institutions, 11 allow customers to submit a customer service inquiry in one channel and respond to the inquiry in another
  • Only one bank allows a customer to complete a product application in a branch and check its status online
  • Five banks allow customers to start an application online and complete it in another channel.


There are many benefits to Channel Integration including:

  • Increased cross selling capabilities – Back end data systems provide a single view of the customer to inform systems which customers should receive timely, targeted offers
  • Increased go-to-market speed – Connected channels makes data more readily accessible and decreases testing time windows for new products and services
  • Enhanced usability – consistent look and feel help customers navigate efficiently among online, mobile, and even ATM channels; if customers have to learn a completely different set of screens, it takes more time, diminishes the experience

Common Challenges

Despite many attractive benefits, Channel Integration is often relegated to a buzz word that is rarely implemented.

  • Multichannel strategies do not have a dedicated, centralized team – companies are divided into silos and compete for resources, resulting in the lack of a holistic strategy
  • Difficult to assess return on investment – it's difficult to pin down an ROI for mobile initiatives let alone quantifying multi-channel benefits
  • Legacy systems paralyze Channel Integration priorities – archaic databases and mainframes lacking modern connectivity and automation may freeze Channel Integration initiatives until key dependencies are resolved


How to overcome these challenges? Focus on the following.

  • Create and champion a Channel Integration team – the team must be backed by leadership as a strategic initiative that will require time, money, and buy in from many different teams across all customer platforms. The team should be given real leverage to affect change
  • Adopt and execute a Service Oriented Architecture (SOA) model – SOA is critical for increasing go-to-market speed, maintaining data consistency, and limiting regulatory risk. SOA also enables organizations to make the most of legacy systems.
  • Understand your user & monitor customer behavior – having an understanding and definition of specific customer use cases is critical for identifying Channel Integration opportunities. Banks must analyze all customer inputs, outputs, and interfaces when charting all potential paths beginning with the offer to offer approval , completed purchase, and product usage. Additionally, the ability to implement tracking solutions capable of cross platform tracking across online, mobile, and forms (e.g., loan application) and customer data interfaces for targeting offers is critical. This will provide hard data to form strong business cases and return on investment data in support of channel integration.

Prioritizing and implementing Channel Integration is no longer optional as customers disperse across platforms – it's a necessity. Delivering a multichannel approach with result in the benefits outlined above, ultimately increasing shareholder value. Your customers and shareholders will thank you!

[1] Montez, Tiffani. "The State Of North American Digital And Multichannel Banking 2013." Forrester, 2 Apr. 2013. Web.

[2] Marous, Jim. "Consumers Are Increasingly Using Multiple Devices to Support Banking Needs.", 3 Nov. 2011. Web.

[3] Wisniewski, Mary. "First Look: How Wells Fargo Envisions a Smaller Branch."American Banker. N.p., 16 Apr. 2013. Web.

[4] Montez, Tiffani. "The State Of North American Digital And Multichannel Banking 2013." Forrester, 2 Apr. 2013. Web.