Managing the customer experience across all channels

Multichannel delivery has truly arrived in the retail banking, private banking and wealth management sectors. Customers are spoilt for choice when interacting with their financial services providers and the quality of delivery – whether it be through branch, call centre, ATM, kiosk, internet or mobile – is improving all the time.

There is no shortage of expert opinion on the topic. In Europe, the European Financial Management and Marketing Association (EFMA) keeps track of the latest developments in retail banking, insurance and investments, and disseminates ideas through surveys, reports and events. EFMA’s retail banking advisory council, made up of senior executives from a wide range of banks, describes itself as a leading “think tank”, exploring “new avenues of thought, new technologies and new strategies that could help banks to restore consumer confidence, develop new business models and achieve greater long-term efficiency and profitability”.

Multichannel delivery is the council’s current preoccupation and the subject of its seventh annual report, published in October 2012. “New channels have arisen over recent years but banks have to be wary of focusing on these at the expense of tried and tested approaches that still have a role to play within a multichannel environment,” warns the council in its report. Now that banks are placing even more emphasis on customer centricity, the management and personalisation of the customer experience across all channels is becoming increasingly important.

And while technology – new and traditional – is central to the success of a multichannel strategy, “financial institutions need to use it wisely and invest in solutions that are best for both the bank and its customers”, advises the council.

High street branches

“A multichannel strategy is not just about multiple delivery channels – it is about delivering multiple products too,” says Mark Mauriello, banking practice lead at EMC Consulting. “The two go together. It is about customers transacting in various ways, across the bank’s product and business lines.”

Eric Disend, director of digital at EMC Consulting, adds that each customer typically uses several channels and that technology enables their interconnectedness. “Banks are placing more emphasis on creating a digital experience in branches that ‘connects the dots’ with ATMs and other digital devices such as tablets, mobile phones and laptops,” he says. “Banks have invested heavily in digital channels, so if a customer walks into a branch and asks about a feature of the mobile channel, the tellers need to have been briefed on what to say. Almost all the banks I have worked with want their branches to be the Apple stores of banking.”

That is a fundamentally important observation. It is why bank branches, whatever their detractors say, have a bright future. If Apple, the world’s most valuable and forward-thinking IT company for which the virtual world is its oyster, believes it is important to expand its high street presence, which it is doing, then banks are right to think along the same lines.

A multichannel strategy has to be a blended experience. “Most of our banking clients talk about having, or aiming to have, a holistic, cross-channel collaborative experience, but that is a difficult goal to achieve because all of the channels have been developed separately over different time periods,” says Mr Mauriello. “Contact centres providing a human interface are more important than ever in the digital age. Remember that every digital channel needs a support component – someone they can call,” he says.

EMC Consulting advises many banks around the world on multichannel sales and service strategies. Banks must start by identifying the needs of their customers, creating an integrated view of them and then helping them use and traverse different channels. It is a transformative process in terms of IT because the technology has to become more responsive to the needs of the digitally engaged client.

“IT transformation is essential,” says Mr Disend. “Banks must change their legacy systems if they are to implement a multichannel strategy. These channels are expensive, especially in large banks. EMC has done some work to virtualise those channel architectures, which makes them more cost effective.”

Multichannel strategy 

In EFMA’s report on multichannel strategy models, EFMA director John Kirkbright identities a few central themes relating to multichannel delivery in retail banking. They include:

• The need “for more personalisation in each channel”.
• The ability to open accounts through any channel; many banks still require customers to visit a branch.
• Finding new ways of acquiring customers through different channels.
• Getting the right mix of channels for each geographical market.
• Using new channels (such as social media and mobile phones) to establish a better dialogue with customers.
• Being able to move staff more easily between different channels, and more multitasking – that is, branch staff acting as call centre operators when required.
• Exploring whether banks should offer the same services at the same prices through all channels or whether a more segmented approach can be taken.

Banking in corner shops

ING Bank, one of the top three Dutch banks, has 274 conventional branches in the Netherlands and a further 400 agents or 'service corners', in book shops, newsagents, supermarkets and other retail outlets in the country. These agents have been in place for some time, in partnership with the Dutch post office and cobranded as such. However, the joint venture has ended and the bank is halfway through the process of re-branding them all as 100% ING and making them almost fully automated.

Philippine Crommelin-Risch, managing director of the branch network for ING Bank, says that clients can be served through these service corners at a lower cost than through bank-owned branches, and it improves the proximity of the bank to customers. “There are now only cash machines in the service corners, where people can make withdrawals and deposits,” she says. “However, if anyone needs help, shop employees can provide assisted service. These employees have been trained by ING and are fully up to our standards.”

The bank’s branches are also becoming more automated, with more kiosks and ATMs to free up staff to provide advice. “We are working harder at recognising customers’ needs and their value to the bank when they walk into a branch,” says Ms Crommelin-Risch.

“Are they a new or an existing client? Do they have an appointment or not? Do they have high-growth potential? Should we focus on retaining them? Are they very interesting for the business?,” asks Ms Crommelin-Risch. “They may be greeted by a host at the door who asks them what they need and can help, or sends them to another person to provide advice. We are also experimenting with machines in busy branches where clients can input their questions, take a ticket and wait to be served."

ING’s branches, similar to those of most banks in Europe and other parts of the world, are being transformed. The transactional and operational needs of customers are being met by machines, while their more complex needs – a mortgage application or investment advice, for instance – are being met by staff.

“We are using IT to facilitate that shift and free up capacity for our branch people to offer advice. We are making the branch an intimacy-oriented channel,” says Ms Crommelin-Risch. “For this to work the stability, security and broad functionality of our ATMs is vital.”

ING launched a mobile app a year ago, which now has 1 million users. Interestingly, the new mobile traffic has not been at the expense of the branches. “It is additional interaction. Clients still find a lot of reasons to visit our branches.”

All of ING’s channels are, of course, linked. But there is a big difference between channel interaction and channel integration. “We are improving channel interaction without fully integrating all channels,” says Ms Crommelin-Risch. “Staff can access data from call centres, branches and service corners, but that data is kept in separate databases. We aim to have one general customer database in which all channels keep their client data, but we are not there yet.”

Service as an asset

US-based bank Wells Fargo attaches more importance to service than sales, and sees technology as a great facilitator. “More sales do not always lead to better service, but better service always leads to more sales,” states the bank in its latest strategy document. “Put simply, our product is service. We use technology to personalise service, not to depersonalise it. Technology allows us to connect with our customers in new ways.”

The bank has identified six key areas of opportunity, including retail banking, commercial banking, cards and residential mortgages. It is the US’s main mortgage originator, with $189bn of new mortgages written directly in the first nine months of this year, slightly higher than the same period in 2011.

“Strong distribution channels are the key to reaching customers,” says Mike Heid, head of home lending at Wells Fargo. “We have a very broad distribution network. We have the ability to service customers when they come to us for purchases and refinancing.”

The bank has two ways of looking at mortgage production. One is direct lending, through 11,695 home mortgage consultants, many of them operating from the bank’s stores. About half of the bank’s total mortgage volume comes from them – roughly $189bn. The other half – $191bn in the first nine months of 2012 – comes from what the bank calls its 'correspondent' or 'aggregator' channel. Small to medium-sized mortgage origination companies underwrite and close loans, then sell them to Wells Fargo, which in turn pools them and securitises them for sale on the secondary market.

The direct retail channel provides the greatest benefits for Wells Fargo, rather than the third-party originators. “It gives us full control of the customer experience, the best opportunities for cross-selling, stronger customer retention, wider margins and better credit quality,” says Mr Heid.

Chase, the US consumer and commercial banking division of JPMorgan Chase, provides a good example of retail channel innovation. It has just created a Spanish language version – chase.com/espanol – of its online banking service. “We continue to tailor products and services to meet the needs of the Hispanic community, which is a significant and growing customer segment,” says Pablo Sanchez, national executive for Chase consumer banking.

The Spanish language website has been around for several years, but up until now it has provided information only, not transaction services. Spanish-speaking customers can now use the website to manage their accounts, pay bills and do many other things, all in Spanish. Chase already provided bilingual customer service through call centres, ATMs, bank statements and promotional literature.

Indian innovation

ICICI, India’s largest private sector bank, has just rolled out 25 electronic branches, open 24 hours a day, seven days a week. Customers can use the electronic branches to deposit cheques and cash, withdraw cash, conduct online banking and carry out video conferencing with customer care personnel.

'Tab banking' is another new initiative from ICICI. It allows new customers to open an account from their home or office using a tablet computer with an internet or mobile phone connection. All the relevant documents and the customer’s photograph are scanned and viewed on the tablet and the bank’s computer screens, without the customer needing to visit a branch. “Our continuing adoption of innovative technology reinforces our commitment to improving and developing our relationship with our customers,” says Chanda Kochhar, ICICI’s chief executive.

Meanwhile, HDFC Bank, India’s second largest private sector bank, providing services to 25 million retail banking customers in hundreds of cities, as well as wholesale banking and treasury services, believes its competitive strength lies in the use of technology and its ability “to deliver world-class service with rapid response time”. 

Although it already has 2564 branches, more than 10,000 ATMs, and extensive phone, mobile and internet banking services, that is not enough. That is why in October it tied up with Indian Oil Corporation (IOCL) to provide banking services through the company’s KSK petrol stations. The objective is to reach more people living in semi-urban and rural parts of the country who cannot get to a branch. 

“This initiative in partnership with IOCL is yet another step towards taking banking to enterprising Indians in the hinterlands,” says Michael Andrade, head of agribusiness at HDFC. The target is to have 1000 petrol stations in the network, each serving about 1500 customers with savings accounts, loans, insurance and investments.

The bank switched on its 10,001st ATM in September in Kovalam, a beach town near Thiruvananthapuram, the capital of Kerala. “The launch of the ATM at Kovalam reflects the fact that customer centricity is at the core of the bank’s impetus of offering a wide array of electronic channels,” says Hari Velloor, zonal head in Kerala for HDFC.

For all banks, innovation is key to reaching and serving customers. If you can have a bank branch in a petrol station in rural India, you can probably have one anywhere. 

With banks today having to place more emphasis on customer centricity, managing and personalising the customer experience across as many channels as possible is the only way forward.