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Channel in Financial Services

One blog I've been reading lately is Dr. Catriona Wallace's blog (Your Call) that covers the Asia-Pacific contact centre market.

She had a good post on 24th June looking at the consumer use of channels in Australian and New Zealand banking. Her research suggests that at least for Australia and New Zealand:

"... there are distinct differences between the BFI consumers and consumers from other industry verticals. For example, there is almost equal preference for BFI consumers to use the internet as first channel of preference as their level of preference to speak to a live attendant. In all other industry verticals the primary preference is to speak to a live attendant. About 9 in 10 BFI consumers are happy to use self service technology for simple transactions and even 4 in 10 are happy to use self-service technology for complex transactions. We just don't see this level of orientation around consumer self-service in other verticals."

She also highlights how demographics like gender and age also have a big impact on how consumers choose channels when dealing with their financial services provider.

I feel it is also well worth looking at is culture when looking at consumer's choice of channel. In Europe I believe channel preference is driven as much by culture as it is by vertical or by demographics. The last very detailed research I've seen on the subject was Forrester writing in 2004, but the differences are clear.

Asked which channel consumers would use to first contact their bank for a service issue, there were huge contrasts between countries. In the UK 72% of customers would use the telephone channel as their first option compared to only 26% of Italians picking up the phone. Branch showed a similar degree of huge variation, 91% of Spanish would go to a branch as their first action but only 59% of Dutch would go. However, 15% of Dutch would e-mail their bank as their first action (remember this was in 2004, today it's probably higher).

These cultural differences highlight how different the role of the contact centre can be. What in one country is a strategic channel for voice traffic in another is a minor channel for e-mail or remote support.

The acceptance of self-service in Financial Services is also interesting. I've posted previously on the Dimension Data/ Cisco Speech survey but this has focused only on speech acceptance for English speaking countries (including Australia and New Zealand). It might be interesting to extend that and see if consumer acceptance of self-service extends to other cultures. Alternatively, it may be that a lot of people phone up to check their bank balance and their priority is to get the answer quickly rather than from a human.

The one thing that I would stress is that despite cultural differences, is that as a vertical financial services has the most complex set of consumer channel usage however the consumers choose to use those channels.

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Comments: (2)

A Finextra member
A Finextra member 03 July, 2008, 05:04Be the first to give this comment the thumbs up 0 likes Yes, channel preferences are worth observicing especially for banking strategist, marketing teams, operational teams. But most of the differences seen today may not be relevant in next 5-10-15 years time. And the virtual channels will take precedence over traditional, when Gen Y, shall rule the next generation financial world.   
Alex Noble
Alex Noble - McAfee - London 03 July, 2008, 14:06Be the first to give this comment the thumbs up 0 likes

Shripad,

The idea that demographics' behaviour will change their future behaviour is a very good point. I would certainly agree that channel use will be very different in the near future and ten years out is very difficult to predict. 

Where I would be more cautious is the idea that generation Y will be the dominant market. By assets for example, current projections suggest the single wealthiest demographic may well be women over 50. That might require a very different channel strategy than generation Y.

The other suggestion I would have is that much of the discussion around generation Y is base on a US (or English speaking) look at generation Y. I would be very surprised if generation Y in the Nordics and Southern Europe approached channel in the same way, though I would agree that they will approach channel very differently from their parents.