In a new report, "Evolutionary channel management - The Next Level", just six per cent of UK retail finance institutions surveyed identified integration of their existing technology infrastructure as a key business priority. This is despite integration issues being seen - by well over half of the 36 respondents - as one of the most critical barriers preventing retail financial institutions from improving services and products in the future.

The survey shows that a significant number of retail banks expend vital resources on developing new channels merely on the basis that their competitors are doing so, rather than on any sound strategic decisions. Forty-four per cent of respondents cite the need to keep up with their rivals as the chief reason for investment in new channels, with 38 per cent of interviewees citing this motive as the most important future driver as well.

Steve D'Souza, managing consultant, argues: "Adopting this kind of 'me too' approach is not conducive to developing a well-placed market position. Many banks need to take a long hard look at where their business strategy is actually leading them, rather than rushing to market with services which are not necessarily leading to commercial gain."

Findings of the study show 56 per cent of retail financial institutions cite integration as the main barrier to optimising their technology-based channel mix. This compares with just 28 per cent who cite security worries as the main argument against exploiting channels such as the Internet, WAP and PDAs. Twenty-two per cent of respondents believe the key factor delaying development of channels is "complexity". Nineteen per cent cite a skills-shortage.

Despite considerable investment in online services, only six per cent of interviewees reveal they use the Internet to provide customers with any form of online advice which could provide real business benefits. Sixty per cent of respondents confirm Web channels are only being used as part of marketing drives in an effort to acquire new customers.

D'Souza concludes: "Forty per cent of respondents to our survey reveal that the likely cost is the key determinant in deciding whether or not to roll-out a new product or service. Technology integration is the key to bridging the gap between development of new products and services while ensuring cost-effectiveness. Far better that than rushing headlong into expensive initiatives that have not been adequately market-tested or even costed, just because competitors are doing so."