Key emerging business and technology trends across retail banking channels to meet new client demands and optimize channel distribution costs

Traditionally, retail banks have used branches, ATM, call centers, mobile, and Internet to interact with their customers, though newer direct channels such as social media have emerged recently. Branches have always played an important role and remain a key banking channel. However the changing needs and preferences of customers, coupled with growing technological innovations, has led to the increased popularity and adoption of direct channels over the last decade. Direct channels are expected to hold the highest share of global banking transaction volume by 2012, though traditional channels are still expected to command the highest share of the sales volume.

This paper explores how banks are shifting their customers from high-cost to lower-cost channels to reduce the total cost-to-serve. Globally, banks are investing in enterprise mobile financial service solutions to deliver more mobile-based banking services and reduce the overall cost of operations. As the adoption rate of online banking continues to increase globally, banks are expected to increase their online marketing presence by leveraging technologies such as Web 2.0 and social networks, which have evolved as an integral part of the banking channel mix. Banks are also increasingly spending on customer-centric analytical tools to better understand client buying and channel-usage patterns, which can help build and improve customer relationships.