Improving cooperation between branch, Internet and call centre channels is the top strategic priority for nearly half of Europe's retail banks in 2011, according to a report from Efma and Finalta
Banks are targeting a step change in direct channel sales and to achieve this they anticipate significant use of differential pricing, says Efma (European Financial Marketing Association).
This will bring to a head a conflict between branches and direct channels that most banks have been trying to avoid for some time. Branch sales have decreased from 82% to 78% since 2007, whilst those made via the Internet have nearly doubled, to almost 10%. By 2013, the report predicts, this will be 19%.
Meanwhile, transaction migration is also a high priority for 2011, cited by 31% of respondents. Pricing differentials and education are the most commonly used techniques to move over customers. Banks reported counter transactions down by 3.5%, self-service up by 11% online by 15% over the last year.
The report also finds 29% of banks are prioritising improvements in mobile Internet banking. SMS alerts are the most common service offering but 58% of banks have mobile Internet services and a further 27% plan to join the rush.
However, banks do not see mobile banking as a direct revenue generator and 62% say this is holding up change. The biggest benefits are expected to come from reaching younger customers and improving service.
The growth of online channels is expected to result in a slight reduction - two per cent - in branches by 2015, with staff levels down 3.5%. With fewer tellers, branches will become much more sales oriented and the proportion of staff working as advisors and sellers is expected to rise from just over a third in 2010 to half by 2015.
Christine Johnston, director, Finalta, says: "If direct channels grow as anticipated, it is will be difficult for banks to maintain branch networks of the size forecast. Most banks plan to convert surplus branch capacity into additional sellers, but it is hard to see how this could work. In mature markets, there simply will not be sufficient customer demand to utilise them if the predicted sales growth in direct channels is also achieved."