The Decision Maker

Moving Toward Multi-Channel: The Necessary First Step

Posted by Austin on Aug 29, 2014 10:52:58 AM

A new report from McKinsey and Company, The Future of US Retail-Banking Distribution, presents some compelling information for credit unions considering implementing or expanding a multi-channel strategy:

- 65% of banking customers interact with financial institutions through multiple channels

- 75% of call center traffic is for interactions that could not be handled via other channels

- Users of digital channels are 60% more likely to use physical branches.

The report concludes that financial institutions need to expand opportunities for customers to interact via digital channels as well as completely rethinking their physical distribution and go-to-market strategies.

Credit union decision makers are likely to be left with a burning question after reading this report: “Where will we get the comprehensive internal data needed to support a multi-channel initiative?”

“Comprehensive” is the key word. A multi-channel strategy is based on a clear view of all channels. Yet, for many credit unions, physical branch, call center, and digital channel transactions are handled by separate, unconnected software systems. All the data is there but making fast, confident decisions about a multi-channel strategy is nearly impossible due to information “silos”.

Some forward-thinking credit unions have attacked this problem head-on by launching data integration efforts aimed at providing interrelated data across the spectrum of channels and products. Either under the flag of “business intelligence” or “data warehousing”, these innovators have brought key information streams together in a “single source of truth” to achieve unified views of members, product lines, and distribution channels.

Not only do these credit unions plan their multi-channel strategies via these unified data sources, they also track performance of various distribution channel initiatives to accurately gauge their success. In a world where speed counts, quick decisions are crucial to ensure that less optimal choices can be smoked out early and improvements can be implemented faster.

The McKinsey report states that financial institutions not making the change to expanded digital platforms, “may fall victim to emerging disruptive models that leverage alternative distribution networks to acquire customers and provide a superior customer experience.” In a similar vein, if these same institutions do not first adopt a comprehensive, integrated data strategy, they will probably not be able to take even the most rudimentary steps toward joining the multi-channel distribution revolution.

Article written by: Peter Keers, Engagement Manager at OnApproach