After cost control and ubiquity what’s the next frontier for channel innovation? My bet – the mind of the Gen Y customer. This generation of 18 to 20-somethings is a delightful financial contradiction or arch nemesis depending on your personal view, being money-minded but not mindful of it, a fact neatly collaborated by a study some months ago in which a sizeable number of Gen Y’ers said they were in deep debt and needed help managing their money. Also, could their bank help?

But how do you reach out to a population which has overturned so many norms of established behaviour, and is unlikely to ever step into a branch? Simple, by meeting them on their own turf, which in this case happens to be the online world.

Hence, the challenge before channel innovation is to find creative platforms and tools to connect banks with this hard-to-pin-down audience. In other words, go online, mobile and social. Your customers don’t visit you anymore? No problem! Get to know them through blogs, forums and tweets. Build an online community where they can vent grievances and air expectations to the bank, one on one. Build that insight into your SLAs. And teach them to use the personal financial management tools available on your channels to become fiscally self-reliant.
 
A number of banks which have woken up to this reality have responded by rejuvenating their online channels to snare several objectives including customer acquisition, education, service and PR building. That these channels are inherently self-service driven, and hence cost effective, is a bonus. Interestingly, many institutions use social media as a promotional tool without actively promoting their own products on it, because customers trust those forums precisely because they are unbiased. Some go to lengths to provide non-financial content of interest – such as fitness and lifestyle information – using channel innovation to gain entry into their customers’ larger lives, not just the financial bit.

This was just one example. But do you think channel innovation still has legs? Has your bank done something different with its channels? If so, tell all….we are listening!