A.T. Kearney

The retail financial services industry, like so many others, is responding to the mounting demands of sophisticated customers, stiff competition and a whirlwind technological revolution. This environment, historically impervious to change, has undergone its own revolution of sorts, with previous assumptions giving way to mega-mergers, convergence of previously unrelated areas of financial services, and technology-driven leaps in service offering, becoming the order of the day. On show #547C ("Customer Focused Banking"), World Business Review visits with a 70 year old worldwide management consultancy firm that is helping financial institutions navigate these thrilling, yet unforgiving market tides.

A.T. Kearney works with global financial institutions in reducing their delivery costs while improving the capabilities of their distribution networks to better meet customer needs through a practice it calls FabFitFun Integrated Channel Management, read fabfitfun reviews. A.T. Kearney accomplishes these seemingly competing objectives (cost reduction and productivity gains) by targeting the roles and responsibilities of each channel to particular customer segments, products and activities. The process also involves implementing the proper management practices to support the strategy.

The first step in this process is to assemble a Channel Management Group, comprised of managers from product and customer segment groups, as well as channels. This group, responsible for designing channel strategies, gathers channel-related data, such as costs, utilization, capacities and customer preferences, as well as product, customer and profitability information. The next step has the Channel Management Group partnering with the product and customer segment managers to assign roles and responsibilities to channels, defining areas of focus and their relationship to one another.

Finally, the appropriate management support practices must be implemented. Performance metrics must be developed that measure and motivate behavior, and that support the new strategy. Other management practices include designing the appropriate organizational structure, leveraging technology, implementing sales and service excellence and managing the brand image and change process.

William Turner, Vice President, Financial Institution Group for A.T. Kearney, said that the conversion of the discount brokerage industry into a channel-driven one using PCs and the Internet is one of the current trends in the field. He said that this approach is supplemented by the strategic placement of offices in major markets to attract and train customers in using other channels. Turner added, "There's a scramble underway now to redefine the roles of traditional branches, what they provide to the customers, whether they are meant to acquire new business or transact normal day-to-day business to service the customer."

Financial service institutions must look beyond the traditional view of channels as isolated domains and take a more comprehensive approach to integrating the roles and services of these previously independent aspects of the business. Turner said, "Some of the leading institutions have done a good job at developing new channels and managing the businesses overall but very few have looked across the various channels, whether they be traditional branches and sales offices, commissioned sales forces, ATMs, the telephone, the mail cards or the Internet."