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4/9/2004
02:50 PM
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Where The Money Is

The Web was supposed to kill bank branches. Instead, banks are spending billions on them as a cornerstone of customer service.

To be sure, some tech-driven productivity attempts have flopped. Following the lead of brokerage firms, which let clients conduct trades via mobile phones, many banks launched similar services. It turns out that customers don't need to check their savings-account balances all that often--unless they're already at an ATM trying to get cash. Key expected to sign up at least 1,500 customers when it launched its service a few years back; it got 700. The idea simply failed to catch on, Swanick says. Similarly, Bank of America experimented with outfitting branch personnel with PC tablets, letting them roam the lobbies and interact with customers; customers liked it, but it proved too expensive.

Internet-only subsidiaries such as Bank One Corp.'s WingspanBank failed because executives mistook online banking for a product instead of a delivery channel. Today, the Internet is just one indispensable component of a retail strategy (see story, "Online Ties: Web Banking Makes Customers Less Fickle").

Yet all this--the goal of making branches a go-get-'em sales vehicle, the success of online banking, a diverse channel strategy--highlights a problem that banks, despite years of trying, still struggle with: getting a single view of all customers' business.

Customers increasingly expect access to all their banking relationships (checking, credit card, mortgage, etc.) via any means (ATMs, branches, telephone, or the Internet). Systems for engaging a customer at the branch and on the phone "are no better than the degree to which you understand all of that customer's relationships," says analyst Richard Bell at research firm Financial Insights.

So as banks revitalize their branch strategies, they're taking an approach that focuses less IT spending on channel-specific systems--teller systems for branches, voice response for call centers, self-service for the Web and ATMs--and more on systems that organize customer data for all those channels to use. "When you compare channel-specific and multichannel spending, multichannel is becoming more and more important," Bell says.

ATB Financial, a 145-branch Canadian institution, integrated Siebel Systems CRM software into its 200-person call-center system at a cost of about $6 million four years ago. Now it's bringing that same integration to bank tellers in an 18-month project. This is no small effort: about $8 million for branch-teller software from Eontec and integration with the Siebel system, plus another $8 million for infrastructure, including all new PCs for tellers. ATB also plans to create a customer-information file from which customers would be assigned a unique identifier, letting the bank track customer relationships across individual systems for credit cards, mortgages, and checking accounts, says Ken Casey, ATB's senior VP of retail banking. That effort, which would cost at most $5 million, would provide that single-customer view in a sort-of intranet. "When customers identify themselves to a teller, the teller's screen will bring up the entire relationship," Casey says.

Royal Bank in Toronto uses Information Builders Inc.'s Focus data-integration software to pull together customer information from any business unit of the bank into a consolidated view, for a customer or a bank employee servicing that customer. The rows of customer data sitting in silos scattered throughout the bank offer a potential bonanza, if banks can only figure out a way to get it into one place. "In the banking industry, there's tons of information, but to bring that down to the desktop is a challenge," says Andy Hanna, head of report management and distribution at Royal Bank.

Wells Fargo & Co. tackled that issue by creating a data warehouse for customer information so that when a person goes online to apply for a mortgage, for example, the form will be prefilled with name, address, account numbers, and similar information.

Creating a single view of customer information out of systems spanning multiple product lines, geographic regions, and distribution channels can be an expensive proposition. "The issue is, how do you get information out of those systems and share it in an actionable way?" Key's Swanick says.

ATB is training branch personnel in cross-selling, such as inquiring whether a mortgage customer is aware of a low refinancing rate and, if the customer appears interested, referring him or her to a mortgage specialist in the branch. The customer-information file would make it easier to identify customers likely to be interested in such sales opportunities and communicate them to the teller's terminal while the customer is standing there.

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