A typical large bank today is likely to have a call center for voice, branches for in-person interactions, a sales force for mortgages, relationship managers for key customer segments, a mobile app, internet banking, and a website. Tackling distribution pain pointsĪs banks’ distribution models have evolved over time (Exhibit 1), the challenge of orchestrating customer interactions across channels has greatly increased. To do it, banks need to break free from legacy biases and take a clean-sheet and customer-centric approach, leveraging new technologies such as artificial intelligence, to radically rethink their customer interactions, reimagine the role of mobile, reevaluate bankers’ roles, and redraw their channel landscape. And in an industry where distribution accounts for a hefty 20 to 25 percent of operating costs, there are considerable savings to be made one bank reduced its cost to serve by two-thirds.Īchieving such dramatic performance improvements is attractive. These compile and cross-reference more than five years of data from more than 250 major financial institutions that operate in more than 50 countries and serve more than 710 million customers. 1 Unless otherwise attributed, the data reported in this article is drawn from proprietary Finalta by McKinsey global banking benchmark data sets. Taking their inspiration from consumer companies and retailers, banks experimenting with this model have seen impressive early results, including a doubling in digital sales, a threefold increase in cross-sell, a 40 percent rise in customer activity, and the elevation of customer experience from a middle ranking to top quartile. This smooth and swift journey exemplifies a new distribution model for retail banking: one that positions mobile as the orchestrator promoting conversational customer engagement and integrating digital and human interactions so seamlessly that channels as we have always known them cease to exist. Soon after, the bank sends her discounts for three local moving companies and a click-and-go home insurance offer that exactly fits her new living situation. Next day, Stephen messages her with great news: her application has been approved. Happy with the process, Sacha e-signs the mortgage application using the app’s biometric verification. Two days later, Sacha checks into the branch via the app and meets Steven, who shows her a digital simulation of the mortgage journey and answers her questions. Using the app’s live calendar, Sacha books an appointment at her nearest branch and receives a confirmation with a photo and profile of her adviser, Steven. A human-like conversational chatbot asks whether she prefers to submit her application online, video-call a remote adviser, or meet an adviser in person. She opens the bank app, scans in a code from the real-estate listing, and clicks “Get mortgage options.” She sees three personalized offers and clicks on one of them. Not long after, Sacha finds her dream home and needs a mortgage to seal the deal. This article is a collaborative effort by Ashwin Adarkar, Miklós Dietz, Max Flötotto, Neha Kabra, Sergey Khon, and Philippine Risch, representing views from McKinsey’s Financial Services Practice.
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