Project runways: ATM branch call center"channels"--pathways to the customer--still...

[ILLUSTRATION OMITTED]

Stessa Cohen picked up on renewed interest in channel integration almost two years ago. Perhaps the notion of linking ATM, branch, call center, internet, and mobile access to give a 24x7 bank cohesion, value, and real-time speed had always been an issue. But the

"This bank had also been improving the internet banking GUI," Cohen relates, referring to the customer-facing application design. "As a next logical step, the head of retail operations then wanted some better connection between the two environments," she says. "It's a classic channel integration theme."

The plot thickened. Cohen started to hear tidbits elsewhere. She wrote a note about multi-channel banking, pointing out, as part of her analysis, that a more unified, componentized infrastructure where every IT configured path to the customer was built from common elements and performed in consistent ways could, for instance, share applications and processes for risk management or security.

Meanwhile, Financial Insights and HP jointly wrote about integration as part of a channel transformation white paper. Reduction of needless complexity, better channel performance, and flexibility were stated themes.

At Forrester, Bruce Temkin, vice-president and principal analyst did some research earlier this year on the rise of the "experience bank" executive whose job was, among other tasks, to look across channels in the act of improving service.

Second time around

While it's not a groundswell, the word is back out on the street nearly a decade after "channel integration" first made the rounds at industry conferences and trade articles. Remember the talk? Breaking down silos? Building common user interfaces? Clearly, the topic's resurfaced.

This time there are new IT wrinkles. The tools are different. Technologies like services oriented architecture (SOA) and business process management (BPM) enable new options, not the least of which is process design across channels, lines of business, and, if necessary, divisions.

"For the first time business rules that can be changed and consistently applied is at least conceivable," Temkin says. "Before the prevalence of business process management tools, work on channels tended to be handled on a one-off basis with good reason, there weren't options."

Moreover, as one analyst told ABA BJ off the record, lower costs associated with new technologies like SOA meant that such reengineering projects were more feasible for mass market customers.

More to multi-channel?

Customers, of course, go about their banking business in idiosyncratic ways. While everyone knows this, most banks address the matter as if it were, ipso facto, a problem. What if, instead, banks redesigned themselves to enable hybrid, or interrupted transactions so they could be, if not glorified, then easily supported?

If so, a would-be mortgage customer could get most of the origination handled online and, if he or she decided to follow through, pick up the process at a branch kiosk with human experts nearby when needed. Being able to support such a complex workflow could become a point of differentiation with an early-mover advantage say experts at Accenture, Gartner, and Forrester.

SOA at Synovus

Components, an idea related to SOA, have been discussed widely. But they also have a role in the channel management story, at least, at $33 billion assets Synovus, based in Columbus, Ga., which opted for SOA instead of older, point-to-point methods of channel linkage.

Basically, using loose coupling and components, the bank--which is a Metavante customer for back office processing--has gotten channels working in lockstep with well-orchestrated technical and business policies and, beneath that, consistent business rules.

Starting in 2002, concerns with customer service were a key driver of a broad-based redesign and linkage of the Columbus, Ga.-based multi-bank holding company's operational hubs.

"Basically, you'd get inconsistent answers to product questions depending on the channel you used and we decided, with internet banking becoming one key focal point, it was time to change the entire environment," notes chief technology officer John Woolbright.

Going mobile from "parts"

No fan of big bang change, Woolbright helped Synovus adopt XML-based messaging. Later the bank did an uptake and formalization of services oriented architecture. New rules for application development and vendor product usage also supported big strides forward this year in the inauguration of mobile banking.

As Woolbright recounts it, true channel integration was five years in the making--albeit with sweet rewards. Mobile banking, for instance, was created from an application code set completely made up of reusable components (and process design) from application development work that was done for the branch and internet. This has become "the poster child for SOA and channel integration within the bank," Woolbright states.

As Synovus recognized, channel inconsistencies were a huge complication and an unnecessary drag on business. "It's hard as a customer service rep to look credible in front of the client when you don't have the transaction related facts easily at your disposal," Woolbright says. "Now, we offer more timely, responsive customer service."

A given, not an extravagance

At Accenture, Greg Lowell, senior manager, financial services strategy, and Scott McHugh, managing director of CRM for the global financial services practice, each have strong views on integration. Both agree that channel management is a work in progress at a time when bankers realize they cannot dictate the terms of interaction and must work hard to inspire engagement.

"The multi-channel experience is a given," McHugh says. "So the typical bank is trying to manage the IT expense and operational issues, and trying to support customer service best practices despite the complexity."

In terms of IT budget and implications for strategy, sales, and marketing, channel disconnection can mean lights out for positive outcomes.

While rethinking channel design again could be dismissed as obsessive, channel integration is a massive enough requirement that banks are working the problem continually.

"Banks divide their attention between channels in the product distribution sense and in the customer service sense--with appropriate messaging, transaction management, and ideas on how to provide that elusive customer experience," says Lowell. "Executives know of that stickiness that occurs when each channel is used optimally," Lowell adds, "providing an aspect of service it's best suited to provide--alerts for the mobile bank channel, for instance.

For most banks, this reengineering c isn't a "if you build it, they will come" scenario. Nor is it, necessarily, "the build out of a multi-channel extravaganza" that is all things to all people. It's more like setting up the IT environment just enough to be nimble and then, rolling out features or full applications that make sense for a particular segment, or that make sense given the brand and the desired business objectives.

"This is a refined focus, a teasing out of a customer service dimension," Lowell says. "It resulted from asking questions like, 'Is this the most intuitive interface?' 'Are the answers to this policy or about this product hard to find?' 'Does this workflow make sense?' All of this refined scrutiny has come from the need to improve customer service."

What's in it for the bank?

Elegant, more efficient IT environments can be one big plus of channel reengineering, then. Customer delight is another. Why else look at the channel integration topic now?

Refinements in internet banking have made it more likely that customers will engage in complex transactions (those started in one vector and picked up elsewhere for completion).

"In the last 18 months, the ability to abandon an online application and pick it up again has become more mainstream," says Forrester's Temkin. "Bankers recognize that not all interactions with the bank are either single session or linear," he adds.

Moreover, says Gartner's Stessa Cohen, emerging channels themselves offer the opportunity to create some small and precise form of alert that can help a customer navigate money management, and make a bank stand out.

Everybody wants accurate information and customers respond better to segmented offers and experiences engineered with segment knowledge, Cohen says. While you could argue that many process improvements can be done on a given channel in isolation, many transactions will--and should--touch on all channels.

One bank's Tech Tips

* SOA--a services approach to integration helped Synovus reuse workflow and business-rule approaches worked out for the branch and internet.

* XML-based messaging helped to simplify linkages between systems of record and other front-end "feeder" applications.

* A policy approach was adopted by Synovus to guide application development and new vendor adoptions. Net result? No shorts and few exceptions were allowed.

* Strict rules regarding when and how data were duplicated or manipulated kept all records clean.

By Lauren Bielski, senior editor