Banks still don't get mobile, but neither do researchers…

I read with interest a post pointed out to me by @JenRBoyd posted on Mobile Commerce Daily highlighting a recent Celent report comparing US and EU investment in multi-channel. The problem here is that the conclusions of the report are correct, but even the report itself suffers from an old-school view of the banking arena, that is, we are still asking the wrong questions…

Celent/Oliver Wyman - Channel Priorities EU vs US

The Generational Gap in Management
If you’ve read my posts previously, or my book BANK 2.0, you’ll know that I’m particularly critical of the branch-centric organization structures that dominate retail banking still today. The shift to ‘multi-channel’ has been a long and hard road, and is far from over at this stage.

The problem intellectually is that it is fundamentally, virtually impossible to get a banker of 30-40 years experience to think in truly innovative ways about reinventing the way we engage customers in banking. We see this embedded in banking from terminology, to metrics, to budgets, to organization structure, to philosophy. Many banks still call their multi-channel practice “Alternative Channels” – indicative of the fact that most bankers still view multi-channel as an alternative to the branch, i.e. the ‘real’ bank. The problem with that strategy is customers just don’t think like that.

If you had a Y-Gen or Millennial on the board of the bank today, his or her first three priorities in channel investments would be in the arena of mobile payments, social media and mobile banking. In Celent’s report (link above) indicative of the generational gap, even prevalent in the research, is that we aren’t even asking the right questions yet. Celent’s report doesn’t even include the areas of mobile payments and social media engagement as ‘channel priorities’.

Re-imagining the organization
So in an ideal bank of today, what would the channel priorities and organization chart look like?

Here’s a few key elements:

1. Complete Channel Agnostic Approach
The first thing that needs to happen is losing the bias in the organizational structure toward branch, from a budget perspective, from a leadership perspective, and from a philosophical view. It would help to create a Head of Channels that manages branch, internet, mobile, self-service (ATM, etc), and other channels together. There should be an acceptance that all channels are created equal in respect to their ability to engage customers from a revenue and service perspective.

2. Seed strategy teams with Y-Gen/Millennials
You can’t change the way that old banker’s think. Remember the joke…

Old Banker’s never die – they just lose interest.

Seriously, we need aggressive new thinking, and we aren’t going to get that from those who’ve been brought up on a staple diet of traditional approaches to banking. We need to create energy for new initiatives. Most commonly when I propose this to banker’s they say “But, we need people with banking experience!” I cringe at that…you can’t inject new blood and thinking into the system if you insist on only using those who are already preconditioned to the world of banking.

If you must, use the kids and grandkids of the board members themselves so you can keep it in the family. But get some new thinking into the organization ASAP.

3. Customer Dynamics and Engagement Banking
We need to start thinking about re-inventing the role of banking in the lives of our customers. This is not just building new Apps, new websites, or sticking up a page on Facebook – this is thinking about the contextual use of banking, and how to reduce friction for our customers.

Realistically if we think about the way banking works today, usually it is a ‘wait for the customer to come to you’ scenario. We assume that when a customer needs a loan, a new bank account, or to invest some money, that he’ll come to the bank. If we understand the context of those products or services, we’d see that if we could take those elements to the customer, and better engage them, that banking would truly become a service, instead of just a function. The organization chart of the future will have a customer engagement team that dominates the marketing and product functions of the bank, both from a retail and wholesale banking perspective. This is because we are going to have to reinvent the way we engage customers with our products or services, taking banking to the customer.

We have to start asking the right questions. Those questions start with how is the behavior of our customers changing, how can we better engage them, and how and when does that engagement occur? Patently, the use of mobile, social media, contactless payment technology built into the handset, geo-location capability, targeted 1-to-1 marketing offer management (beyond groupon), and other such capabilities should be an absolute priority for bankers today – but we aren’t even talking about that stuff properly yet…


  1. Simon says:


    Nailed it. Why would it be so hard for a bank who is liked by their customer on Facebook, to notice them moaning about debt concerns in conversations with friends… Then, offer them help and guidance. This in turn could lead to pitching several products. The bank as the advisor and non evil entity that helps you with your money is something the market is screaming for.

  2. Ron Shevlin says:

    I agree w/ you on a few points, disagree on a couple other.

    First off, couldn’t agree more that banking is dominated by branch-centric execs. Absolutely right: If you spend 30 yrs indoctrinated in the belief that branches are the key to sales and relationships, adopting a new mindset is pretty damn hard.

    I also agree that “re-inventing” the role of banking in consumers’ lives is critical. That’s what “strategy” is all about (IMnot-soHO). Banking has been about transaction execution (deposits, withdrawals, payments) and not financial management.


    1. Channel-agnosticity is not only not a real word, it’s not something worth striving for. At a conference a few years back, before the Fleet/BofA merger, the CEOs of the those 2 banks spoke and said the same exact thing in their presos: “We’ll do business in the channels our customers want us to do business in.” Implying some kind of channel-agnosticity. My take: This is a WAY TOO expensive way to run a business. You can’t build out every transaction and interaction in every channel that comes along, and sit back and wait for customers to use the channel they want. Some channels are “better” (for both the bank and customer) than others for specific interactions and transactions. And banks need to get customers to use the “right” channels for the right transactions/interactions (I call this “right-channeling). Simply put here, Brett, all channels are NOT created equally.

    2. Seeding strategy teams w/ Gen Yers doesn’t improve a damn thing. Are you familiar w/ the term “belly-button research”? It refers to drawing conclusions about the larger world from just your own experiences and attitudes. And that’s what you’ll get w/ a Gen Yer or two on your strategy team. The other problem w/ the Gen Yer as strategist is that they have no context. They don’t understand the difficulties that are incurred when trying the turn around large boats. They haven’t worked in large organizations for very long to understand the complexities and understand that the problem of the day is NOT necessarily going to cause the demise of the organization.

    The fact that they (the powers that be) can’t envision the changes themselves isn’t the problem. Having Gen Yers on the strategy team is fruitless if the powers that be aren’t open to experimenting with new approaches to doing business.

    My personal view of the situation in the banking world isn’t as nearly dire as yours. I started working full-time w/ banks about 11 years ago when the leadership teams were mostly made up of then late 50 and 60 year olds, folks who would never touch a computer, let alone use the Internet. Those execs are, by and large, gone. Today’s leadership teams are in the their late 40s, 50s, and maybe early 60s. They may not be Facebook-friendly, but they’re a helluva lot more open to change, and new channels, then you give them credit for.

    Sorry for the overly long comment.

  3. bank2book says:


    Very thorough, and solid points.

    In terms of channel-agnostic, it is in my book, so therefore I claim it is still a real word/phrase/adverb/something.

    I agree that not all channels are created equal. However, my real point is that if metrics were more accurate, we would quickly find out that not all processes are best served in the branch. That doesn’t mean they are all best served on the internet or mobile either. The challenge is to understand how behavior is morphing (is that a real word?) and then start to adapt processes, interactions, etc to enable those process. Thus reducing friction for the customer.

    Today I still get asked to come into the branch frequently to do stuff that simply doesn’t need to be done in person.

    On the Y-Gen inclusion. Good point. However, I do think that we do see some generational stuff here. For example, the dominant use of FB/SMS to communicate between digital natives, rather than use of email. The natural expectations of UI capability through mobile, etc. There is a role for Y-Gen/Millennials to be part of the design process. I also think that if you’re looking for creativity in business models, such as the next Google or Facebook, it is unlikely it is going to come from bank boardrooms. So the challenge is to get that sort of input and out-of-the-box thinking into the strategy for a mainstream bank. Tough challenge…

    Thanks for the feedback!


  4. Jim Marous says:

    Amazing timing of your blog post since I also just finished a delayed blog post that I began last month around the significantly underused/underinvested ATM channel ( While Gen Y/Gen X definitely use the social channels more than their branch loving peers from older generations, all of the demographic segments use the ATM more heavily than any channel, with 40 percent of the adult population visiting an ATM 10+ times a month and the average use from all adults exceeding 3 times a month.

    Sure, P2P and other alternative payment and communication options are growing in popularity, but we need to optimize and integrate the channels that we already have in place. Wells is doing testing around integrating the ATM sales process with their email channel and will most likely take the process one step further and leverage the locational identification capability to drive mobile offers as well.

    I don’t think it is about one channel vs. another as much as it is about integration of the channels you already have invested in that are significantly underperforming from a revenue generation perspective.

    With 60-80% of the interchange revenue potentially evaporating similar to NSF fees last year thanks to our very consumer-centric government, financials need to maximize ROI from all of their channels.

  5. Bob Meara says:


    Points well taken – thanks for taking the time to elaborate.

    For perspective, the research cited was purposefully branch-centric. That’s because lots of financial institutions are trying to figure out how to evolve their branch networks in the face of declining foot traffic. With branches representing a significant majority of channel delivery costs, this is an important objective. Not every initiative must be multichannel. Rather, multichannel is the world and context in which each initiative should be considered.

    In part, that’s why the research didn’t attempt to address social media or mobile payments. I have difficulty considering social media as a delivery channel in the first place. Seems to me it’s a means of communication, not a channel for delivery of financial services. If the intent of the research was to explore social media, it would have better been placed in the context of the channels in which social media interacts (internet, mobile, call center).


    • bank2book says:


      Fair enough feedback. I think any efforts to help inform executives around the fact to be more focused on the total customer, than relying on branch interactions alone to build a relationship is critical.


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