For banks, getting channels right is a big deal. It’s how they deliver value for customers and the community. Traditionally, branches were (and still are) an expensive proposition, and while bricks are giving way to clicks, focusing on digital and 'traditional' channels branches separately often doesn't produce the intended results and can lead to increased costs.
For resource constrained mutual banks, we think there are more optimal approaches than trying to emulate the big banks.
Consider these market realities:
- Major Australian banks' technology investments are staggering - ANZ spent $2.5bn and CBA $1.6bn on ICT in 2024 alone [1]
- Most mutual banks operate with technology budgets less than 2% of this size [2]
- Australia Post provided banking services at over 3,400 post offices on behalf of 80 financial institutions in 2024 [3]
- Internet coverage in the regions remains a significant challenge (an important consideration given many mutual banks support customers in regional locations) [4]
With major banks investing billions in universal channel capabilities, mutual banks can't win by playing the same game. The path forward isn't about matching the major banks dollar-for-dollar – it's about being smarter, more focused, and more attuned to community needs.
The framework shown here helps simplify the options so that the channel strategy for banks can be mapped. This can help mutual banks make deliberate choices about where to focus limited resources for maximum impact. In our experience with mutual banks, the most successful identify where they can create distinctive value that is most relevant for their communities, rather than trying to excel in every quadrant. Evidence shows that mutual banks compete most effectively when they align their channel strategy with three critical factors: community needs, infrastructure realities, and institutional capabilities.
The key insight? Strategic coherence - deliberately choosing where and how to compete rather than trying to match majors across all channels - enables mutual banks to deliver value that is most relevant to customer needs, without spending like a major bank on technology.
So how can we achieve the omnichannel promise without needing omniresources?
- Match your channel strategy to suit your target customer and community’s context
- Be smart and relevant with digital investment, with one eye on future customer trends (hint: it’s more digital), while supporting current customers that may need more assistance
- Explore practical ways to offering assisted channel support that limit unnecessary overheads (remember, a video call is also assisted!)
- Leveraging partnerships (like Bank@Post) to extend physical presence where this is needed (e.g., unreliable mobile access)
- Strengthening broker relationships for cost-effective growth, although this also needs to be considered strategically (more on this in a later post)
- Focusing branch expertise on high-value interactions ... and make sure branch staff have all the skills, tools, and culture to solve any problem your customer may throw at them – this is the channel of last resort
Despite smaller technology budgets, customer-owned banks consistently achieve strong satisfaction ratings in their core markets [6]. This suggests that strategic focus - rather than pursuing omnichannel - can deliver compelling customer value.
How might aligning channel strategy with your bank's unique context create more value than chasing universal digital transformation?
