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Virtual_Customers_ Who is Minding the Store

Virtual_Customers_ Who is Minding the Store

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Published by: Brazil offshore jobs on Jun 27, 2012
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 June 2012
Given the intense hunt or growth in atight market, this seems improbable.Yet that is exactly what’s happeningat many regional banking companies.The customers in question arethose who have drited away romthe branch and now do most o theirbanking at arm’s length. Seldom seenin lobbies, these “virtual domiciled”customers have built their bank-ing lives around alternatives such asonline and mobile banking, automatedteller machines and contact centers.According to Novantas research,inrequent branch users now consti-tute rom 20% to 40% o the retailcustomer base at various regionalbanks (Figure 1). And their rankslikely will grow, mirroring the trendin other retail industries, such aselectronics stores and book storechains, which have seen dwindlingcustomer trafc in storeront outlets.Banks need an organized,deliberate response to this trend. Yetmost have thus ar ailed to eectivelymanage the critical virtual domiciledsegment.To successully retain and growthis customer group and capture agreater share o wallet, retail banksmust change the way they do businessacross fve areas: sales and market-ing; controlling delivery costs; networkconfguration; customer analytics; andultimately, organizational structure.
Cross-sell opportunity
Clearly, the near term priority is salesand marketing. Banks have an imme-diate opportunity to cross-sell credit tothe deposit customer base. Yet rare isthe bank with a robust multi-channelstrategy to cross-sell virtual-domicileddepositors. Players that succeed incapturing this business in the next 12to 18 months will enjoy a virtuallyunassailable lock on the virtual domi-ciled customer relationship.While branch lobby-based initia-tives still deserve considerable atten-tion, these need to be complementedwith a more deliberate outreachto the multi-channel customer. Ourresearch indicates that the major-ity o new retail customers acquiredover the past fve years seldom seea bank lobby. Banks need to learnhow to reach these customers on theirown terms, and provide productsthat are clearly designed or non-branch marketing and servicing.
Retail banking customers increasingly are skipping branch lobbies in favor of remotealternatives such as online banking. Are they receiving adequate management atten-tion? Are retail banks overlooking a major segment of their customer base?
Virtual Customers: Who’s Minding the Store?
“We estimate that currently25% of the retail customerbase is attitudinally receptiveto using alternative channelsas complete substitutes foreveryday branch transactions.And we believe the receptivityratio is destined to increase.”
DirectCredit UnionNationalRegionalCommunity
81%41%37%29%27%13%20%23%25%26%29%32%33%33%36%37%37%42%57%99% A BCDEFGHI JNMO
1a: Percentage by Bank Category1b: Percentage by Bank(Disguised)
Credit Unions and Community bankshave been excluded rom igure 7bdue to individual bank sample sizes.
Figure 1: Virtually DomiciledCustomer Distributions
As seen in
Banking Strategies

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