According to many recent analyst reports, including the World Retail Banking Report 2012 co-authored by Cap Gemini and EFMA, customers are viewing
the Internet - alongside the branch - as one of the two most important channels of retail banking worldwide.
In this context, I find it odd that many banks and nonbanking financial service providers are virtually treating the web as a non-existent channel while communicating the value proposition of their phone, mobile banking and mobile payment services. Let me
cite a few examples of this trend.
Bank: I recently received an email from my bank - a Top 5 private sector bank in India - with an offer to use its Phone Banking channel and receive a free gift. To promote this channel, the bank used the tagline "Why walk a mile when you
can dial?" in the context of checking the status of a cheque. This is no doubt a great line for phone banking – only that it is outdated by more than a decade. The bank launched Internet Banking some 12-13 years ago. Since then, many customers, including me,
have been checking the status of cheques - and doing lots more - with a few mouse clicks instead of "walking a mile". (For the moment, I'll ignore the fact that cheque usage has itself been dropping steadily ever since banks launched ACH- and RTGS-equivalent
EFT systems on their Internet Banking portals around 6-7 years ago).
Online Payment Provider: According to this Finextra article, a bookstore in Australia "lets students beat the queues with QR codes". The queue-busting
solution has been provided by a leading online payment provider that has recently forayed into physical stores. To use it, students visiting the store would need to (a) have a smartphone, (b) have a QR code reader app installed on it, and (c) know how to scan
QR codes. I'm hazarding a guess but I'm reasonably sure that over 75% of the student population in Australia would be 'digitally native' enough to fulfill these prerequisites. But, if that be the case, I'm very sure that all of them - and more - would prefer
to order their books online instead of visiting the store especially during the peak season when they know the place is going to be crowded. (Yes, I did check, the company does have a website that accepts online orders.) Or, would the students visit the store
for the instant gratification of walking out with the ordered books in hand? That segment of buyers wouldn't be candidates for the queue-busting alternative anyway, since it doesn't make the books available for instant in-store pick-up, instead shipping them
to the students' homes.
Mobile Network Operator: This Top 3 Indian MNO has recently launched a Mobile Money service. The MNO is promoting mobile bill payment, a major use case of its service, by emphasizing that it provides an alternative to standing in queues
for hours to pay bills at the biller's physical premise. Fact is, most billers have launched Internet-based bill payments years ago. Some of them, like my energy utility, have done a great job of eliminating the traditional areas of friction that have plagued
similar systems in the past, thereby boosting adoption in recent times (See MSEB Tops Online Bill Payment Consumer Experience in my personal blog for details). In short, bill payment has been queue-free for a long time now.
Given that they've invested millions in setting up their web channel, I wonder why banks and nonbanks alike are choosing to ignore it while trying to promote their mobile services, especially when some of them can be made appealing even to their web channel
users. Let me venture a few guesses:
- Poor marketing.
- They're targeting a new segment of customers who have smartphones with data plans but lack PCs with Internet access. Ever since I've seen a janitor at an Indian airport and several car and auto rickshaw drivers in many Indian cities tapping away on their
smartphones, I'm inclined to believe that this could be a sizeable segment, at least in India, if not elsewhere. As for whether the advertised mobile services are relevant for it, that's a subject for another blog post.
- Good old silo mentality of each channel. As the above examples indicate, this is by no means unique to banks.
Knowing the fairly high caliber of employees working in these companies, I'll immediately rule out Reason #1. In the case of Mobile Money, the second reason is plausible. For the first and second services, I ascribe Reason #3.
Maybe my guesses and attributions are off-the-mark and there could be other explanations for why companies are choosing to forget the web channel. I'd love to hear your comments.