Protected: How can banks strengthen their digital sales channels?

Why is it so urgent for banks to strengthen their digital sales channels right now?

In today’s world, smartphone usage is intense – people check their device about 80 times a day, or roughly every twelve minutes while awake. Although the quantitative usage rate of digital channels through log-ins is high and regional banks reacted early, the actual sales success via these channels still falls short of its potential.

Do regional banks already have the necessary technical infrastructure for digital transactions?

Yes. Many regional banks reacted early and offer technically sophisticated online banking systems and powerful apps. Regional banks often have strong technical infrastructures, including digital closing processes, analytics and mobile applications. For example, the savings bank app and the apps of the Volksbanken and Raiffeisenbanken together boast nearly 6 million active users. The real bottleneck isn’t access to technology, but how little its reach is leveraged and how rarely it translates into sales.

What successes are established European banks already achieving in digital product sales?

Successful digital product sales are also possible for traditional branch banks, as European competitors demonstrate. Here are some examples:

• Erste Bank: according to former CEO Willi Cernko, “almost half of all products in the private customer business are now sold digitally”.
• Belgian KBC: published figures showing that 52% of “core products” are sold digitally.
• Italian Intesa Sanpaolo: achieves 40% of sales via digital channels.

What defines “digital pioneers” and what do they do differently?

Digital pioneers in the competition (such as the Trade Republic concept) demonstrate the great potential of digital sales channels. They strike a chord with the times by offering:

• a simple product range
• a user-friendly app
• low fees and attractive interest rates on deposits
• lower entry barriers to securities trading, especially for younger clients

What are the key strategic shortcomings that often prevent regional banks from successfully activating digital sales?

Technology alone is not enough. Often, the biggest shortcoming is the absence of a consistently integrated approach to digital sales as a strategic business area. Above all, there is a lack of management attention, clear responsibilities and cross-departmental cooperation. Focus, leadership and resources are essential to leveraging digital potential.