Getting to Digital: Assessing Banks’ Progress

Celent Digital Banking Panel Series Part 4
by Jean-Marie Ubigau,  Bob Meara, May 19, 2016
Industry Trends
North America

Abstract

This report examines specific digital and ATM channel activity metrics based on a March-April 2016 survey of North American financial institutions to assess how far banks have come in achieving digital channel transaction and sales targets and what they’re doing to improve. Said simply, there is a long road ahead for most institutions.

In the report Getting to Digital: Assessing Banks' Progress, Celent offers an analysis of its fourth Digital Banking Research Panel survey, which examines the extent to which institutions are realizing digital transaction migration and sales goals.

The March-April 2016 survey found that, for many banks, online banking utilization is below expectation. By comparison, more institutions say mobile banking utilization is at least somewhat exceeding their goals. To get there, a growing number of institutions are using branch channel staff to spur digital channel usage. Forty-two percent of responding institutions already have an initiative, and another 27% are gearing up or piloting an initiative involving equipping branch staff to encourage digital channel adoption.

For years, most financial institutions embraced a transaction migration strategic intent for the digital channels. Digital was about migrating transactions to self-service, thereby lowering cost-to-serve and improving customer experience. In the broader retailing context, banks have been an anomaly. Almost universally, retailers have embraced digital channels as a mechanism to grow sales revenue. Financial institutions are now coming to that position. Collectively, their lack of experience with omnichannel customer engagement is apparent in the small impact digital has thus far had on sales — particularly the mobile channel.

“Branches are where sales are taking place today,” says Bob Meara, a senior analyst with Celent’s Banking practice and coauthor of the report. “Digital is where sales are going. How far and how fast this will happen varies dramatically among market segments and from institution to institution.”

The report begins with a look at the state of digital banking utilization, including how banks define active users. It then examines the extent to which transactions and sales are migrating to the digital channel and what banks intend to do to improve their effectiveness in fostering digital engagement and customer acquisition. The report concludes with recommendations on how to get to digital faster and more cost-effectively.

This is the fourth of a series of reports based on Celent’s Branch Transformation and Digital Banking Research Panels. The purpose of the effort is to look deeply into the objectives, priorities, risks, barriers, and likely outcomes of omnichannel banking in North America. Panelists were recruited among Celent clients and nonclients alike. Celent is accepting additional requests for membership in the panel and expects to field ongoing research through 2016 at semi-monthly intervals. To request to be on the Branch Transformation or Digital Banking Research Panel, apply online.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

The State of Digital Channel Utilization

3

 

Using the Branch to Influence Digital Adoption

6

Digital’s Impact on Channel Transaction Mix

10

Digital’s Impact on Sales

14

 

Driving More Sales to Digital

17

Recommendations

19

Appendix I: Panel Demographics

20

Appendix II; Survey Instrument

21

Leveraging Celent’s Expertise

25

 

Support for Financial Institutions

25

 

Support for Vendors

25

Related Celent Research

26

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