The Future of Multichannel Banking

As consumers become more digitally driven, optimizing the channel experience, taking advantage of alternative distribution channels and figuring out the role of physical branches in a virtual world become issues of the utmost importance to banks.

At research and analyst firm Celent's annual Insight & Innovation Day, a panel of technologists from several prominent banks offered their insight on how to best tackle these problems.

Bob Meara, a senior analyst with Celent, framed the discussion by offering some pertinent statistics. According to Celent research, the number of banks ranking the branch as one of the top two most important channels declined from 73 percent in 2010 to 54 percent in 2012. Only about half of banking customers rely on the branch as a primary channel, Meara added.

According to Meara, "the erosion of the branch channel will be most pronounced among big banks," as community bank and credit union customers still largely desire a more personalized banking experience. Still, all banks will have to prepare for the paradigm shift to digital, and banks will have to master how to engage with their customers virtually, he said.

"Banks will have to learn how to sell in self-service channels, and right-size the branch while improving sales effectiveness," he added.

According to Kim Summerow, SVP, Core Retail Innovation for Bank of America, the bank no longer uses the term "multichannel" but rather "omnichannel."

"Our goal is to standardize and offer customers information they need in any channel they want to interact with us," she said. "Our focus is being consistent across all channels."

Summerow said BofA has seen a "sizable shift" towards mobile deposits, processing about 100,000 checks via mobile RDC per day. In that kind of environment, the role of the branch will shift to be a sales and information center, to "bring our expertise to our customers."

Summerow noted that digital channels can complement physical ones well at times, and one way Bank of America is doing so is by offering a mobile "bank by appointment" service, so customers can use their mobile devices to schedule time to speak with an in-branch banking expert.

While digital channels are on the rise, they won't completely supplant traditional channels, noted Tom Poole, head of Enterprise Mobile and Social Media for Capital One.

"Mobile RDC doesn’t negate the need for the branch, but it reduces one reason you might go," he added. Poole believes that branches will be used more for educating the customer on different financial products that are becoming "fairly complicated."

Poole added that each channel should be at the point where a customer can get their banking needs completely served in that channel without having to go to another channel to finish a task. Along those lines, he said that Capital One has recently launched a service where customers can open a credit card on a mobile device, and that has seen a high usage already.

Mike Young, VP, Banking Product Team Manger for EverBank said since the bank is primarily a online one, multichannel for them means "trying to find ways to get to our customers."

EverBank does have some physical locations, and the bank's goal for those is to give customers who enter "a consistent experience and allow them to do what they want to do as easy as possible. It’s really about customer choice rather than multichannel."

Young said EverBank's goal is to get to the point where new customers could open an account entirely on a mobile device.

"We see that as a long-term goal," he added.

Dan Dickinson, Head of Online and Mobile Banking Canada for BMO Bank of Montreal said the "old model of the branch as a hub and everything else as a spoke off that hub" is no more. BMO is examining ways to use the mobile channel to enhance the service experience, such as by allowing customer who need to enter personal information for any reason to take a picture of an ID card rather than entering keystrokes, "which can be inhibitive on a mobile device."

[Related: Multichannel is becoming Omnichannel]

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio