A new Novantas survey makes it clear that many Canadian banking customers have moved solidly beyond the branch, raising the question of multi-channel strategy.
As in most retail industries, banking customers are embracing multi-channel shopping, both to select a new bank and to buy additional products. This shift creates a growing urgency for banks to meet the demands of a digital marketplace, where increasingly valuable chunks of business are being won or lost before customers ever visit the branch.
Not only are shoppers strongly influenced by online information and a user-friendly experience when searching for a new institution or an additional product, but many are willing to open accounts remotely as well – and a critical customer segment is willing to give up branches entirely. These developments are changing the game in customer acquisition and cross-sell.
Although Canadian bankers have a strong intuitive grasp of this development, our recent national consumer survey shows a much stronger market shift than many executives may have perceived. According to the Novantas 2012 Canadian Multi-channel Survey, 58% of customers review web site information when selecting a new institution, and 50% view user-friendly online banking as a “very important” decision factor. When established customers get ready to open an additional account, more than 40% prefer to do so outside of the branch, either online or with a live rep over the phone.
This transition to multi-channel shopping and competitive evaluation poses a new set of management challenges for Canadian banks. First, customer information will need to be more thoroughly integrated and analyzed so that banks can understand how relationships and behaviors play out across all delivery channels. Second, new levels of channel coordination will be needed, both to boost functionality and the overall brand experience for the multi-channel customer, and to broker critical investment decisions that may boost costs in one area as results are improved elsewhere. Third, there are many questions about the branch network, which, paradoxically, the majority of customers want to be convenient (open long hours and close by) but are less and less likely to visit.
Fortunately, Canadian banks are in a solid position to address these issues. Unlike their U.S. counterparts, they are posting record profits and also have healthy branch networks overall. Yet there is no time to waste in preparing for a burgeoning multi-channel marketplace. A bank can be technically adept in operating various individual channels, yet still fall far behind in multi-channel customer acquisition and cross-sell.
Financial institutions worldwide are increasingly seeing the need – and more importantly the opportunities – to embrace expanded multi-channel opportunities.
Customers and members are demanding an environment where 24×7, real-time access to information is becoming more the norm than the exception, something that only a holistic, multi-channel view of the FI world can adequately address.