Speaking at the launch of the ACCA MasterCard in late February, FBC Bank retail and e-comerce executive director Agrippa Mugwagwa said, “At FBC Bank, we have what we call multi-channel distribution, which ensures that whichever channel you prefer we offer you products that ensure you can transact on that channel. We have ATM cards, mobile platform, and internet and soon we will be launching what we call V-payments.”
Report by Omen Muza
It is not often that you hear a local bank clearly and publicly articulating its multi-channel strategy, so I pricked my ears and decided that sometime, I should focus on the issue of innovation in the retail channel space. While a multiplicity of delivery channels is clearly welcome as it enhances customer convenience and increases available options for consumers of banking services, Mugwagwa is dead right, it should not be just about churning out one delivery channel after another in a “mine-is-bigger-than-yours” kind of race. This is because a multichannel strategy is not just about multiple delivery channels – it is also about delivering multiple products. In other words, it is about underlying substance. What underlying product or service is the channel meant to enable easier access to?
The obvious starting point for banks setting out to craft a multi-channel strategy should therefore be to identify the specific needs of their customers, followed by the creation of an integrated view of them in order to help them navigate easily within and across channels. In the case of FBC Bank, it appears that they have that covered because their ACCA MasterCard product, for instance, arose from a clear need by ACCA students for a payment solution. Incidentally, FBC Bank is one of the first banks to publicly declare its usage of Whatsapp and Skype as media for engagement with current and prospective clients and it is their “tech-savvy” disposition which triggered the theme of this week’s column. What are some of the dominant themes of multichannel delivery in retail banking?
The need for more personalisation in each channel: In order to be runaway successes delivery channels must either be tailored to meet the specific needs of targeted customers, or must evolve from a process of co-creation with contemporary customers who are no longer mere bystanders in the value-creation process, but active participants. Innovation can no longer afford to serve only the interests of banks. Technology allows banks to connect with customers in new ways and it should be used to personalise service, not to depersonalise it.
Channel Integration: There is a big difference between mere channel interaction and channel integration. For instance, most banks still require customers to visit a branch in order to open an account, yet ultimately the customers must have the ability to open accounts through any channel of their choice. Ideally, a customer should be able to start the account-opening process through one channel and if interrupted for some reason or other, be able to complete the application process in another channel. While banks are embracing the mobile channel and continue to support other pre-existing channels such as online banking, my view is that they are not doing enough to integrate the technologies used to build e-banking solutions;yet delivery of service should be a cross-channel collaborative experience. The only other time I have publicly encountered the issue of integration in relation to a bank was when an executive of one of the local bank handed me his business card. His title said “Head – Group Business: Seamless Integration and Training”
Getting the right mix of channels for each geographical market: Some channels just won’t work in certain areas. The mobile or internet banking channels, for instance, are generally not suitable for high value payments typically moved by corporate treasurers. On the other hand, the mobile banking channel is most ideal for those in the informal sector or in remote rural outposts who have neither the time nor the capacity required to transact in brink-and mortar branches.
Customer engagement: Banks in Zimbabwe still have a long way to go in terms of effectively leveraging new channels such as social media in order to establish a better dialogue with customers. Resultantly, sometimes banks feel they “know” their customers, but knowing “about” someone is not the same as knowing them and confusing the two is the difference between a transaction and a relationship.
Multi-tasking/Capacity for easier staff movement between different channels: The obvious implication of this is increased productivity and efficiency, characteristics which banks sorely need now more than ever as they face regulatory pressures that force them to reduce fees and interest rates, with a negative bearing on revenue.
Market Segmentation: Multiple delivery channels enable banks the flexibility of deciding — depending on their individual efficiencies – whether to offer the same services through different channels at different prices or to offer the same services at the same prices across all channels.
Automation: Going forward, if more bank branches are automated and equipped with more self-service kiosks and ATMs, this will have the effect of freeing up staff to provide advice, something which machines cannot do, no matter how technologically advanced.
Omen N Muza writes in his personal capacity.