The 2008 Efma/Finalta survey of more than 175 million customers across Europe shows that direct channels increased their contribution to 12% of retail banking sales, up from 10% in 2007. While this still represents an appreciable level of growth, it is around half the rate banks predicted last year.
While progress in direct channel sales is being made, the difference between Europe’s banks is striking. For some, direct channels now account for more than 30% of retail banking sales. For others, it is less than 5%. On closer examination, the reasons are not so much country, regulation or customer-driven. Rather, the variance is due to different levels of management focus and the readiness of key sales processes, notes Finalta director Remus Brett.
In the next two to three years, the gap between the market leaders and followers is expected to widen. Those banks that have already made the required investment in infrastructure and organisational change are well positioned to prosper. The downturn will play to their strengths as they benefit from lower cost of sales and, through web-based products, the opportunity to compete on price. For those late to the game and with investment harder to come by, change will be slow. In 2008, the weight of branch sales decreased slightly from 82% to 80%. For this channel, increasing the weight of commercial staff remains a priority.
