Service and Technology

Rethinking delivery channels in light of digital service options

By Jim Trautwein

Most community banks realize they have niches within their customer base. Appealing to the shifting preferences of empty-nesters, active families, an emerging younger population and a host of other diverse customers represents a tremendous opportunity for community banks to fine-tune their channel offerings into a unique value proposition for their customers.

As a community bank’s customer base evolves, its delivery channels should be adapting to its customers’ changing preferences. Traditional service methods through branches, call centers and loan officers have been morphing into a new menu of electronic service offerings including Internet banking systems, bill pay, online account opening, loan origination, mobile banking and automated business applications.

According to “The Cornerstone Report: Benchmarks and Best Practices for Mid-Size Banks,” transactions processed through electronic delivery channels now equal or exceed those handled by traditional branches. As this evolution continues, community banks should be reevaluating their delivery channels to maximize revenue and retain customers.

As a starting point, community banks should focus on the following four areas when updating the channel strategy.

Determine what constitutes a “channel.” Channels can be defined by a personal or interactive experience or just as a path to access the bank’s services. Obvious channels are branches, the Internet and, more recently, mobile. Smartphones, tablets and laptops/desktops each have the potential to be channels, and each comes with its own set of customer expectations. Cards and ATMs can be channels, products or services. Each of these areas will play a different role in delivery channel strategies, and each will be weighted differently in terms of importance.

Once the channels are defined, determine the unique experience customers should have with each. For example, quick access to cash and account balances is a desirable experience with the Internet banking channel. Integration among channels so that a loan started online can be followed-up through the call center and completed in the branch is a desirable experience. Maybe providing customers with the same experience in every channel—what they can do or see in the branch can also be done or seen on the Internet, mobile device and telephone banking—is the desired overall outcome.

Carefully consider integration among the channels when choosing solutions. While a channel can provide services, it can also remain separate and distinct, with different marketing collateral for each and possibly a different look, feel and capability. A highly integrated channel strategy bundles these together to maximize customer value and adoption. Integration behind the scenes enables the channels to share information and provide customers with a seamless experience no matter what they want to do.

Decide how the channels are supported. A single team can support all channels or specialists can cover each channel or group. Product development can be integrated to drive a unified channel experience or different product managers can cover branch, Internet, mobile, card and other products independent of one another—possibly even in different departments. Whatever support mechanism you choose, make it consistent with your operational strategies.

Rethinking the service delivery channel provides a lot of opportunities that can differentiate community banks for their special value in maintaining trusted, longstanding relationships with their customers. Aligning delivery channels with a cohesive strategy will drive sales, service, efficiency and customer retention.