The sixth annual
Efma-Finalta report on multichannel banking in Europe finds that
improving co-operation between branch, internet and contact centre
channels is the top strategic priority for nearly half of Europe’s
retail banks in 2011. Other top targets include sales functionality
and transaction migration.
Go deeper with GlobalData
Improving
the co-operation between branch, internet and contact centre
channels is the most pressing channel priority for almost half
(45%) of the European banks surveyed in the sixth annual
Efma-Finalta report on multichannel banking.
Banks are targeting a change
in direct channel sales by anticipating a use of differential
pricing. This will cause a conflict between branches and direct
channels most banks have so far avoided. But branch sales have
decreased from 82 to 78% since 2007, while those made via the
internet have nearly doubled to almost 10%.
The report highlights
aggressive forecasts for internet sales growth: banks expect 19% of
sales to be made online by 2013.
Transaction migration is
still a high priority for 2011, with pricing differentials and
employee/customer education the most commonly used transaction
migration techniques. To support this, banks indicate that they are
prepared to differentiate channel pricing – and even stop selling
lower margin products in branches. Nearly one in ten banks expects
to do this for credit cards by 2013 and 7% for non-life
insurance.
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By GlobalDataBanks’ counter transactions
were down by 3.5%, self-service transactions up by 11% and online
transactions up 15% over the past 12 months.
The survey found 29% of banks
prioritise improvements in mobile internet banking. Mobile phones
are becoming increasingly important in customer service, with SMS
alerts the most common service offering: 81percent of European
banks currently offer them; a further 13% plan to. This reflects
the relative low price and complexity of implementation of the
service.
Some 58% of banks offer
mobile banking and 27% plan to introduce the service. However,
banks do not consider mobile banking a direct revenue
generator.
Direct channel service
profits are expected to come from younger customers. But actual
demand for mobile banking is not clear and over 85% of banks
believe that receptiveness to mobile banking is limited.
In terms of branches, banks
predict numbers to fall just 2 and branch-staff number to fall by
3.4% by 2015, but their are differences: Southern European and
Scandinavian banks expect the greatest reduction (-6 and -4%
respectively).
Overall, Scandinavian and
Western European banks predict that branch staff numbers will fall
at a faster rate (-7 and -2%) leaving a network of smaller
branches.
Southern European banks,
however, predict that average branch size will increase, due to
larger reductions in branch staff than branch numbers. This is no
surprise: Southern European markets such as Italy and Spain are
characterised by a multitude of very small branches with an average
of three to four staff – a challenge to manage.
Conversely, Eastern European
banks forecast increases of nearly 5% by 2015 as customer numbers
rise. However, growth in staff will be limited, at about
0.6%.
The pattern in the more
mature banking market of Central Europe is for modest growth, with
an expected rise of 3% in branch numbers and 2.5% in headcount.
They expect significant changes in branch staff responsibilities.
The proportion of branch staff accounted for by tellers will reduce
by an average of 8.5%age points by 2015.
Branches will become much
more sales oriented: the proportion of branch staff working as
advisers/sellers is expected to rise from just over a third in 2010
to half by 2015. Commercial roles will also change as banks focus
more on advice, relationship building and sale of more complex
products.
EFMA secretary general
Patrick Desmarès said: “If retail banks are increasing their focus
on younger customers, they must also be committed to developing the
technology and systems that this generation will expect to interact
with.
“Mobile banking must become more than a one-way
communication method. We must see the development of, and
commitment to, more intuitive communication methods.”
