One of the key questions for financial institutions (FIs) this year will be how they respond to the changing expectations of their customers when it comes to interacting with their banks.
While the branch remains a vital channel, day-to-day foot traffic at physical locations is declining as consumers opt for self-service, online and mobile channels. This means less opportunity for cross-selling and upselling as the volume of physical transactions drops.
But this shouldn’t be seen solely as a challenge – it’s also a great opportunity for banks to reinvent their distribution channels and stay ahead of the game. By offering the type of interactions customers want, they can get ahead of their competitors, improve their customer experience and find new avenues for revenue generation.
The need for next generation distribution
The growth of alternative channels such as social media and video are changing consumer behavior, and a bank’s distribution strategy must reflect this in order to ensure customers are being given the best value.
New technology capabilities are driving demand for any time, anywhere banking. Next generation distribution strategies therefore need to move far beyond channel integration to provide customers with a complete omnichannel solution.
Banks will have to have a clear vision for their transformation in order to bring clarity to their operations and ensure the organization is moving in the right direction. To do this, they need a full understanding of their customers’ needs, which will be essential in moving their focus from transactional to relationship interactions and managing digital relationships.
Empowering the latest technology
To make a next generation distribution program a success, banks need to make sure they use all the technology available to them, including both physical and digital assets. For instance, making good use of ATM and branch technology can blur the divide between physical and digital and maximise the relationship and sales value of store assets.
Enhancing digital and mobile experiences with an omnichannel strategy that enables customers to seamlessly move between online, social and physical experiences is also essential if FIs are to successfully achieve a digital first vision.
Big data analytics also needs to play a key role in this, as it will help banks develop a greater understanding of their customers’ journeys. This will help them identify each individual’s most favored touch point, recommend the most effective next steps and provide information on customer segmentation that can be used to tailor and personalize the products and services they are offered.
Meeting the challenges of the future
The banking landscape – particularly in Europe – is currently facing a range of challenges, from the emergence of new technologies and an ever-changing regulatory landscape to the threat posed by new fintech competitors.
Therefore, the ability to revolutionize distribution strategies will play a pivotal role in determining which FIs see success in this environment. Organizations will have to think outside the box in order to stand out in an increasingly crowded marketplace, and build very different type of capabilities to streamline their business while maintaining steady growth. However, if they can do this successfully, they will win customer trust and be well-positioned for years to come.