CFC recently profiled a large Asia-Pacific bank that decided to move away from branch-centricity through a strategy for accountable online growth. The bank’s decision was driven by two factors. First, it deemed the branch network in its current state an unsustainable expense. Second, it looked at data like that in the graphic to the left and decided that it was unlikely that its customers’ dependence and preference for technology would reverse course.

However, as the bank made its migration to a new distribution strategy, it learned that without the support of the branch and its staff, online growth would remain unrealized. In fact, the branch played a crucial role in every step of its migration toward increased online activity and sales:

1)      Without pressure on the branch network, there will not be pressure online: The old problem with channel proliferation is lack of real revenue metrics and expectations. Without urgency from the branch network and a clear burden on the web, organizations risk lacking appropriate motivation for driving online sales.

2)      As customer relationships become increasing remote, in person touchpoints become all the more important: While most customers interact almost exclusively through the web, world-class customer service is crucial when customers reach out in person–meaning the branch and the call center have to possess expertise outside their traditional silos.

3)      Customers need to learn about channel capabilities: By establishing incentives for educating customers about online capabilities, the branch becomes an integral part of showing less technologically-inclined customers how the web platform can serve them.

As banks face pressure to make tough decisions around channel-related expenses and how they interact with customers, understanding customer expectations and the motivations for channel preferences becomes increasingly important. For our members, our case study of Accountable Online Growth is an example of how a multichannel strategy can be used to reduce costs while still serving customers powerfully.

For more on implementing multichannel initiatives and customer migration strategies, please register for our upcoming webinar on Channel Strategy (members in Australia and Asia, click here).

As banks consider customer migration, cost to serve, and the shape of their business over the next 3-5 years, CFC has created a multichannel strategy audit tool to help banks assess and prioritize their channel strategies. To learn about CFC’s diagnostic tool for setting priorities around multichannel strategy, please email CFCresearch@executiveboard.com.

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The Cost of Reluctant Innovation