12. Customer Delivery Channels

Question 1

What is a delivery channel?

Answer 1

The way by which a bank builds it’s client base and provides customer service (including the ability to make payments)

Question 2

What are the principle objectives of a fully developed delivery channel? (4)

Answer 2

1. PROTECT & DEVELOP the EXISTING CUSTOMER BASE
2. AQUIRE profitable NEW CUSTOMERS
3. PROVIDE the expected SERVICES DEMANDED BY CUSTOMERS
4. PROJECT/REPRESENT THE BRAND

Question 3

What types of banks are most likely to focus on digital and online delivery channels? (2)

Answer 3

Fintech and Challenger

Question 4

What are considered to be ‘traditional’ delivery channels? (3)

Answer 4

1. Branch Banking
2. ATMs
3. Telephone Banking

Question 5

True or false - most retail banks still consider branch banking to be their main delivery method

Answer 5

True, but there is still a clear decline as banks begin to move to other more cost-effective delivery methods

Question 6

How many UK branch closures were there between January 2015 & August 2019?

Answer 6

3,303

Question 7

What are the main benefits of branch banking? (5)

Answer 7

1. Better customer service
2. Better relationship with customers who value face-to-face service
3. Counter service - small businesses tend to find this useful
4. Able to order foreign currency to branches
5. High value customers can sometimes enjoy their own lounges (HSBC Premier Service)

Question 8

What are the negative aspects of using branch banking? (3)

Answer 8

1. Accessing branches is time consuming
2. Tend to be less efficient
3. Renting premises is expensive for banks

Question 9

What services are offered by ATMs?(6)

Answer 9

1. Cash withdrawals
2. Balances
3. Mobile phone top-up
4. Recent transaction statements
5. Pay utility bills
6. Pay other individuals

Question 10

Why did the emergence of ATMs contribute to the closure of bank branches?

Answer 10

Convenient location - they don’t just have to be based at the bank, they connect to the LINK computer network which connects to customers bank accounts from anywhere worldwide.

Question 11

True or False - ATM usage is currently in decline.

Answer 11

True, people are using less cash.

Question 12

Which bank is considered to be the market leader in telephone banking? Describe the type of service they offer.

Answer 12

First direct - they established telephone banking in 1989 & are still the market leader.

They offer 24/7 call service, 365 days a year, with no bots - personable service.

Question 13

What are the two principle roles that telephone banking plays as a delivery channel?

Answer 13

1. A main delivery channel to customers who prefer this way of banking
2. A supplementary service to branch banking, i.e. can use this when the branch is closed or too busy to take calls.

Question 14

What are the main issues that play a significant role in building a customer’s perception of a call centre service? (7)

Answer 14

1. TIME TO ESTABLISH CONTACT
2. Use of INTERACTIVE VOICE SYSTEMS (IVR)
3. Quality of the GREETING
4. Nature and quality of the AGENT’S LANGUAGE
5. Need for HAND-OFFS
6. The manner in which an attempt to CROSS-SELL is carried out
7. How well their NEEDS ARE MET

THINK- CHATING

Question 15

What is a hand-off?

Answer 15

Passing a call to another colleague within telephone banking

Question 16

What are the roles of Interactive Voice Systems (IVR)?

Answer 16

In telephone banking, these automatically gather personal details (eg DOB, account no, sort code).

They can deal with very basic tasks automatically and will forward to call onto an agent for anything more complicated.

Most mainstream banks have adopted this, only one that hasn’t is First Direct

Question 17

What is online banking?

What is mobile banking?

What are the main differences between the two? (3)

Answer 17

Online = via an internet web browser. Either using a direct connection or wifi.

Mobile = via an app or mobile device, Either using wifi or mobile data.

Similar Services but…
1. App has better MOBILITY
2. App is usually a SLIMMED DOWN version of online - less features.
3. But app functionality is not inferior as apps are FLEXIBLE and can be DEVELOPED TO CATER FOR SPECIFIC NEEDS

Question 18

What are the main beneficial tasks that can be carried out using online or mobile banking? (4)

Answer 18

1. Check BALANCES
2. Initiate LOWER VALUE/REPETITIVE PAYMENTS (e.g rent)
3. SETTLE CREDIT CARDS
4. PAY INDIVIDUALS/BUSINESSES for their service.

Question 19

Name the main types of security protocols used within online and mobile banking. (5)

Answer 19

1. Passwords
2. Phrases on the log in screen
3. Randomly generated security numbers using key fobs or card readers
4. Biometrics - fingerprints, face, voice recognition, typing cadence
5. Call back systems

Question 20

What is the main benefit of using internet banking as a sales channel?

Answer 20

Can offer more competitive rates for internet-only deals due to lower running costs

Question 21

What are Application Programming Interfaces (API)?

Answer 21

A set of programming codes, functions & procedures that allow one entity to access another. They are used by programmers to create apps.

Question 22

What are the principle basic uses of banking apps? (3)

What are the more sophisticated uses that can be offered on banking apps? (3)

Answer 22

Basic uses
1. Check balances
2. Payment of bills
3. Transfer of funds

More sophisticated uses
1. Lines of credit - buy now pay later, e.g. Klarna, Clearpay
2. Can be used for point of sale in shops/on transport etc
3. Spending analysis /reporting tools, e.g. Barclays

Question 23

What are mobile wallets? What can be stored within them? (4)

Answer 23

Payment apps on smartphones and wearables that enable users to make payment via cards and credit transfers within the app

Can store:
1. Cash
2. Credit/debit cards
3. ID cards
4. Vouchers/tickets

Question 24

What types of alerts can be set up on mobile banking apps? (3)

Answer 24

1. Overdrawn balances
2. Requirement to pay a bill
3. Stock trading

Question 25

What are Peer-to-Peer Payments (P2P)?

Answer 25

Individuals making payments to other individuals up to a daily limit. Can be done via different channels, e.g. app, online, telecoms

Question 26

Which generation are Peer-to-Peer Payments (P2P) popular with?

Answer 26

Millennials - many providers target them by incorporating P2P components into their platforms that offer more flexibility/functionality.

Question 27

What are the different types of providers that offer Peer-to-Peer payments (P2P)? (6)

Answer 27

1. Specialist companies which only provide P2P
2. Social media platforms
3. Online retailers with P2P components
4. Telecoms companies
5. Banks
6. Credit Unions

Question 28

What are ‘legacy’ delivery channels? Provide examples (3).

Answer 28

Deliver channels that used to be originally used to complete transactions but now people tend to us online/mobile more. Some people do still use legacy channels though.

Branches, ATMs, Call centres

Question 29

Providers such as Paym & Barclays PingIT offer payment services between individuals (P2P). How do they do this?

Answer 29

By linking someone’s mobile phone and bank information together

Question 30

True or False - there is an additional responsibility put upon the customer when using online or app banking.

Answer 30

True - they have the additional responsibility of inputting the payment instruction details

Question 31

True or false - you can change cash machine withdrawal limits on your account only by visiting a branch

Answer 31

False - this can be done on banking apps