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The banking distribution and marketing revolution

It is time for banks to rethink the existing distribution and marketing strategy to deliver the Everyday Bank customer experience.

Overview

Providing financial services to customers has been the essence of retail banking. But, not anymore. Today, customers expect their banks to go beyond transactions and provide a holistic customer experience encompassing their financial and nonfinancial needs. Yet, most banks are merely fulfilling customers’ financial needs.

Retail banks must offer a broader value proposition to customers—or face mass exodus. Accenture research on retail banking shows that, by 2020, more than 30 percent of banking revenues could be at risk due to new competitors and trends. But, finding a breakthrough value proposition calls for a radically new approach to distribution and marketing.

Banks must act as disruptors—reinventing themselves into what we call the Everyday Bank, pursuing the right mix of an evolution in the existing operating model and a revolution of innovative approaches. Accenture research shows that a gap of 50 percentage points exists in operating income between banks that become Everyday Banks and those that do not.

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Key Findings

Becoming an Everyday Bank can help banks achieve the following outcomes:

  • From flat growth to new revenue pools: The Everyday Bank inherently cross sells—extending offerings, growing sales volume and creating new revenue streams. Accenture analysis shows that the Everyday Bank can multiply interactions by 10 times, gain 50 percent in operating income and attract an additional 15 percent or more of the existing customer base through new offerings.

  • From high-cost to low-cost channels: The Everyday Bank advances low-cost digital channels in new ways, requiring approximately 20-40 percent fewer branches and 20-30 percent fewer employees per branch.

  • From dissatisfied to delighted customers: The Everyday Bank puts customers first to create an immersive relationship. It can increase penetration of pure digital customers and cut digital churn by up to 50 percent.

  • From disintermediation to differentiation: Banks are best positioned to become Everyday Banks versus new entrants due to their deep customer knowledge, the ability to operate in a highly regulated environment and a varied and coherent value proposition.

Customers also stand to benefit from doing business with Everyday Banks. Accenture analysis revealed that a typical family can save an average of $3,100 per year, or 3-5 percent of their yearly purchasing basket, by participating in an Everyday Banks discount ecosystem.

Recommendations

There are four key areas where a retail bank must focus to become a successful Everyday Bank.

  • Brand: Determine and own a distinct identity as an Everyday Bank by selecting customer value propositions that differentiate the brand.

  • Customer Experience: Design an extraordinary Everyday Bank customer journey by exploring opportunities to deliver a whole new customer experience.

  • Partnerships: Orchestrate an Everyday Bank digital ecosystem to provide next-generation customer experience. This would necessitate omnichannel architecture, integrated processes and a digital wallet as a platform for mobile payments.

  • Technology: Develop a digital platform that powers the Everyday Bank. This will involve updating, extending and innovating the bank’s technology foundation—both customer-facing and back-office systems.

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