Is Multi-Channel Banking Just A Bunch Of Hot Air?

Not long ago, a client asked me to give a presentation to his management team on the topic of multi-channel (or cross-channel) banking. I declined the request because I don’t have a lot of research to show what banks were doing about the topic, nor do I have any great examples or case studies of successful multi-channel banking (I don’t have examples of unsuccessful efforts, either).

I also declined the request for a reason I didn’t verbalize: I think multi-channel banking is a meaningless term. One of those fluffy generalities we like to throw out there to make us look smart and well-intentioned, like “customer-centricity.”

Which, I think, is the reason why I don’t have any great examples of it. Oh sure, I’ve seen a report from one of my competitors describing one European bank’s multi-channel banking success (you don’t really think I’m going to provide a link, do you?).  But as I read through the report, I honestly can’t figure out what makes it a multi-channel or cross-channel example — it’s fundamentally about the bank’s effort to improve customer self-service. 

Today, I was on a call with the head of the financial services practice for a very large IT vendor. There was very little mention — no, make that “absolutely no mention” — of CRM, so I asked him what he’s been seeing in the way of demand for CRM applications among banks. His response was:

“Regarding CRM, it’s all about the channels. We’re focusing on providing real-time intelligence to the front-line.”

What he confirmed for me was that bank’s CRM spending is stovepiped and siloed within the channels. The online channel is spending to increase its effectiveness, the branch is investing to increase its effectiveness, and the contact center focuses on improving its effectiveness.

I’ve come to believe that the all the talk about multi-channel banking is just that — talk. One of those motherhood and apple pie aspirational things that bankers like to talk about, because it makes them sound like they’re talking about the things that other people think they should be talking.

Is multi-channel banking just a bunch of hot air?

I’m inclined to believe so, but I’m ready and willing to change my opinion if presented with compelling evidence and proof of the concept. 

4 thoughts on “Is Multi-Channel Banking Just A Bunch Of Hot Air?

  1. Ron,
    The CRM part is actually something I was working on at my former employer. Because I had the opportunity to develop our sales/referral, exception tracking, and commercial risk management applications, I had access to almost all customer data. In order to build those apps I shared a lot of database between the applications.

    It would have taken a little bit of extra work, but I could have brought everything into one universal customer overview. The reason I never did was because no one above my pay grade thought that it was a priority.

  2. George: I’m on your former management’s side. I don’t think it’s a priority, either. “single view of customer” is another one of those fluffy terms. All this work gets done to bring all the customer data together, and then: 1) nobody knows what to do with it, and/or 2) it takes IT weeks to reply to requests to get data out of the big, honking warehouse.

  3. I do agree that many of the terms that are thrown about have no meaning or substance behind them. On this topic, however, the term “multiple-channel banking” seems to be a simple descriptor of how people interact with brands. They will use the means that is easiest, more convenient or more comfortable to them, dependent on the situation. Whether or not to invest in a particular “channel” requires examining the business basics of things like volume, cost and value. And looking at these in the context of anticipating future scenarios, not just historical data. So when this term comes up in conversations, I don’t have an issue with it as long as the “why” component is included.

    Which then ties to you point in the comments about the “single view of the customer.” Your point about creating the single view and then not knowing what to do about it is the real issue issue, I think. I think from reading many of your previous posts that you would likely agree that “what to do with it” should always be considered before undertaking the work, and if how it was to be used and the resulting value can’t be explained, it shouldn’t be undertaken. When I was at a major mutual fund company, we successfully provided our customer service reps with a dashboard that enabled them to answer any question or resolve any issue on that call, regardless of how they had interacted (at that time their choices would have been in person, telephone or online). It also provided information and flags based on predictive indicators of behavior modeled by the data mining team. It was designed with rep input, they were trained on use, and the value of the system was estimated based on increased efficiency and reduced churn (based on root cause analysis of defections and lifetime value). Of course, the results were different than the prediction, exceeding in some areas and underperforming in others, but all in all it accomplished what it was supposed to. So it can be done, but the hardest part of the work is the consideration that occurs before the project even starts.

    Sorry for the long comment.

  4. Ahhh, but in my case, only #1 applied. I was getting data dumps from online banking, mobile banking and core (customer, dda, loan). I’d integrated online banking, mobile and customer data into our sales system which the branches found very helpful.
    Honestly, I think in most cases only #1 applies. IT people can get it all done. We just tire of not being given a set game plan. The unholy amount of reports written for DDA and loans that are only used once is a prime example.

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