Multichannel Banking: Unravel Complexity to Turn Ambitions into Reality

December 10, 2010
Operations/ Benchmarking
EMEA

Abstract

REPORT PREVIOUSLY PUBLISHED BY OLIVER WYMAN

Alternative channels could originate 20% of banks' sales in the next three years and free 20% of branch time; 70% of retail banks surveyed state that improvement of client experience and cost to serve clients are key priorities.

An Oliver Wyman report, Multichannel Banking: Unravel Complexity to Turn Ambitions Into Reality, includes the results of a survey of 30 European retail banks from France, Germany, Italy, Spain, and the United Kingdom. The survey shows that respondents are focused on multichannel, and most of the advanced banks expect alternative channels, such as the Internet, to contribute up to 20% of their unit sales in the coming three years. The report states that opportunities for competitive differentiation and to create value for customers are shifting from products to distribution. However, multichannel remains an organisational and operational challenge.

While the rapid growth of Internet and mobile banking is readily acknowledged among European retail banks, the branch channel remains solidly #1 in terms of its ability to sell and service customers. Survey respondents, however, point to its waining influence.

The report includes recommendations to retail banks based on three levers. The main objective is to achieve an integrated and efficient distribution model which profits as much as possible from each channel—something that continues to elude most European retail banks;

1. Optimise the potential of each distribution channel, remove perceived obstacles, unlock hidden value.
2. Enhance the integration of clients' channel preferences to achieve a genuine multichannel client experience and improve contact management.
3. Align organisation and processes to steer business in a multichannel direction

"Our survey shows that multichannel has never been higher on retail banks' agenda," says Jérome Barrué, Partner at Oliver Wyman and coauthor of the report. "Most of the more advanced players increase their unit sales by up to 20% through alternative channels. They have a more transformational approach to their businesses and assess resource allocation in relation to client behaviour. The first banks to do this also report at least 20% of time saved which they can commit to higher value activities such as ensuring client satisfaction."

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 subsidiary 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

1. Executive summary

3

2. Setting the scene

8

3. A strategic opportunity worth fighting for

14

4. Key levers to unlock multichannel potential

17

5. Conclusion: the 20/20 win

37

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