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(originally published by Booz & Company)


Growing a New Niche in Retail Banking

Expand New Channels
For most retail banking customers, the traditional branch remains the preferred purchasing venue, but that is changing. The mass affluent have demonstrated a preference for alternatives such as online services and mobile sales forces.

Online. Mass affluent customers are 30 percent more likely to prefer the online channel. Increasingly, they are demanding the opportunity to purchase products and transact online, and this trend is likely to accelerate as broadband connections reach more and more homes worldwide.

Banks should develop Web sites targeted solely at the mass affluent in order to fully exploit this segment. These sites should begin with a landing page reserved for the mass affluent customers and should offer products and services tailored to their needs. For example, while browsing the Web site of Spanish bank Bankinter, mass affluent customers see messages that are targeted to their individual behavior, recommending products, such as trusts and access to equities, and tax planning, that they can then easily order or access. On some Chinese banks’ sites, mass affluent customers will see market projections that can help them make investment decisions.

South Korean banks are leading the field in online banking. Woori Bank, for example, is a top performer with a model Web site dedicated to its mass affluent clients. Their site, called “Two Chairs” — a reference to the one-on-one spirit of the service — includes links to articles with expert opinions, customer news bulletins adapted to the mass affluent’s information needs, and an online lifestyle magazine tailored to their interests. The site also provides assistance for Korean expatriates, information about finance and banking for customers looking to study or move abroad, and an online reservation system for Woori-sponsored VIP lounges at Incheon International Airport. In addition, clients will find an advisory center providing financial advice on a variety of issues and a “eFinancial Product Mall” that is differentiated from that of the bank’s regular site.

Mobile Sales Force. The mobile sales force brings salespeople directly to the customer — in his or her office, home, or in the location of his or her choice. The idea is to make the experience personal and as convenient as possible.

Very few banks offer mobile sales forces today. Yet mobile sales forces could be an integral part of a bank’s mass affluent service and could address the special requirements of this group: The sales forces should have sophisticated appointment systems and their staff should be able to complete requests swiftly. In other words, connectivity and empowerment are key to success in this channel. In addition, both specialist and generalist sales advisors should be available, there should be flexibility on the timing and location of meetings, and customers should be reminded of their appointments by text message. Follow-up is also crucial: Banks should send out meeting summaries, and, when possible, customers should be able to see the same advisor on more than one occasion.

In Asia, a number of banks, conscious of mass affluent customers’ preferences, invested in creating a special area to serve them in the branch. The customers appreciated the banks’ efforts; however, they soon started to send their drivers in their stead. The banks ramped up their mobile sales forces in response, to ensure face-to-face meetings with the client. In Hong Kong, mobile sales advisors are available to meet anywhere, at short notice. Mobile sales forces have also taken off in Latin America, in particular in Brazil, where oppressive traffic makes it less likely that time-poor customers will come to the branch: Banks need to go out and see them.

Opportunity for Growth
By providing segmented services across all channels, banks can set themselves apart from the pack, attracting mass affluent customers and ensuring their loyalty.

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  1. Alan Gemes, Fabienne Konik, and Caroline Moss, “Striving for Growth: Best Practices in Retail Banking Sales and Service Channels,” Booz Allen Hamilton, June 2007: The survey on which this article was based provides more detail about the current state of retail banks and identifies the top performers. PDF Download.
  2. “Innovating Customer Service: Retail Banking’s New Frontier,” strategy+business / Knowledge@Wharton, December 22, 2006: How (U.S.) banks can become more customer-focused and innovative. Click here.
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