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Thursday, 4 April 2013

Down with multi-channel!

I often hear the whisper of multi-channel architecture in the banking world. It's a common assumption that banks should strive to achieve some form of common architecture across the various channels such as Internet, telephone, branch, etc. We hear that customers want to be able to transact business in the same way, regardless of channel. They should be able to start a process (like applying for a loan) in one channel and complete it in another. It's a basic customer requirement and banks should be responding, we are told.

Except I don't believe any of this. Customers don't want this at all. Its people like IT architects who think customers ought to want it. But they don't want it at all, in my humble opinion.

Most normal people have a preference for one channel and stick with that. I bank with First Direct and did so when they launched with only one channel, telephone. They have added Internet since, but frankly its rubbish. My wife uses a branch, quaint though I find this. Neither of us stray from our chosen channels and I think most people are the same - we all gravitate to one mode of working that suits us. The myth of customers requiring multi-channel is exactly that: a myth. Note that I use the words 'most' and 'normal'.

Sure, there are some people who want multi-channel. But they are mostly IT Architect types; people who like organising the world and designing the perfect solution. But the world's not organised and attempts to make it so are futile.

Some might say that even if the requirement for multi-channel isn't strong, surely its still something that should be implemented if the technology allows? My answer: no, not really. You see there are a number of large issues with this notion:

  • To have multi-channel you need some form of technology or architectural commonality between the channels. For most banks this is a virtual impossibility: their different channel systems were implemented on different vintages of technology at different points in time. Getting the budget and political willingness in a large organisation to resolve this across a sprawling IT estate is simply impractical.
  • Implementing multi-channel, even if you could get the budget, is a big undertaking. It sucks resource and focuses the mental effort of the organisation on internal IT Architecture instead of delivering real customer value on things those customers actually care about. Resource and budget are finite. Which do customers care more about: achieving multi-channel or delivering radical new function like the ability to photograph a cheque on a smartphone and deposit that photograph, avoiding a trip to the branch to pay in the physical cheque, for example? My bet is customers would always vote with the new capabilities.

When First Direct launched it had a single channel, the telephone. It presented a radical new way of banking, by ditching the branch. Customers loved it. Its single-minded focus on doing one thing well has meant that, even 20+ years later, it still tops any survey of customer opinion. First Direct has achieved this through focus, not through trying to do everything in every channel.

Today we are on the verge of a similar transformation of retail banking - with this time mobile as the catalyst. But mobile is different. It enables entirely new capabilities, like mobile cheque deposit, that transform bank capabilities. Customers are hungry to see those new things implemented. What we see today, and especially so in the UK, is a very basic mobile service. I can't begin to explain how disappointing the mobile service of ALL the UK banks is. It's the duty of banks not to naval gaze over the IT Architecture of those very basic services, but to get on and implement the radical new mobile services that will mean we have no use for the other channels. I can't imagine why I would use any other channels if mobile was done well - and I'm sure I'm not alone.

Anything that slows a bank's ability to deliver these new mobile capabilities is evil. In my book, multi-channel is one of those things. It's the opposite of focus, its an attempts to do everything equally well. Except 'equally well' ends up being 'equally slowly' and 'equally poorly'. First Direct didn't perfect telephone banking by being multi-channel, they achieved it by focussing deeply on perfecting a single channel. Its time banks did the same for mobile, and in the process dumped aspirational thoughts of multi-channel. As customers, we want cutting-edge mobile capabilities and we want them now! We don't want an ability to start a process in one channel and complete it in another; we want an ability to do everything in mobile.

So, I say "down with multi-channel"! You were a nice thought, but your time has passed. Priorities have moved on. Banks need to focus on mobile. Their first attempts were disappointing and uninspired. They can't afford to slow mobile even more by polluting it with requirements to reinvent legacy channels at the same time. Its time to focus! As consumers we're looking for the First Direct of mobile. Who will it be?


  1. I can see your point in general for banking. I always use internet banking and am frustrated that I now have an account that is only operable on the phone. However it is good that in emergencies I can access the internet account via the phone.
    But I definitely think that multichannel is crucial for retail (ie shopping not retail banking).

  2. I think you're saying that you always want to do the same thing in the same way. However 'transacting business' is not about always doing the same thing. I may prefer to check my balance on the phone as this is quite convenient when I'm in a shop about to make a big purchase. Similarly I may like to make a transfer to someone I've dealt with before on the phone. However when I want to look at all my direct debits and think about cancelling some, or search for how sky have changed my payments over the last year, then I want to use a PC - I can tell you from experience that doing these things on the phone takes forever.