bcg.perspectives – Distribution 2020: The Next Big Journey for Retail Banks.
MARCH 20, 2013 by Andy Maguire, Jean-Werner de T’Serclaes, Stefano Bison, and Nicole Mönter
Return on equity (ROE) in the banking industry has dropped sharply from approximately 20 percent in the years leading up to the crisis to just over 10 percent now in developed markets. With distribution representing approximately 50 percent of total costs in these markets, it is clear that retail banks must broadly rethink their distribution strategies in order to adapt to the evolving landscape and changing customer needs.
Best-practice distribution in 2020 will be characterized by higher-quality, higher-frequency interactions between customers and their retail banks. This trend will be enabled by evolving direct-channel technology, more highly tailored (de-averaged) offerings linked to customer preferences and value, and the increasing integration of multiple bank channels.
A look back shows that the annual number of customer contacts with banks nearly doubled from 2004 through 2012, driven by a dramatic increase in online and mobile touch points—from 5 percent to more than 50 percent of the total.
Above all, multichannel excellence is about providing clear value for both the customer and the bank.