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Changing Trend for Channels


Branch Channel

Bank branches had suffered declining usage since the late 1990s as internet banking
spread, but since 2000, they have grown in importance as sales and service centers

As a result, banks are currently revamping their branches through specialization, diversification of layouts and increased operating efficiency.
(Specialization) Branches are being specialized, for example, as comprehensive or WM service branches, in accordance with location and customer transaction style.
(Layouts) Focus is shifting from employees to providing convenience to customers
(Efficiency) Resources are being reallocated, for example, by reorganizing the hub & spoke branch network.


Agent Channel

Sales agents provide another in-person point of contact, and their scope is spreading
beyond insurance to include other financial products such as loans and credit cards

As barriers between financial firms are eliminated, the use of independent agents rather than tied agents is becoming widespread.
In addition to customer proximity, bancassurance, which is one form of independent agency, is beginning to offer wealth management advisory services linked to bank products.
Specialized financial product sales firms are expected to be at the forefront of the changing agent channel, and could replace branches if they are approved by 2010.


Overview of Domestic and Overseas In-Person Channels

(Domestic Financial Firms) Although branches have declined somewhat due to the financial crisis, the agent channel is being expanded
Most financial firms are focusing their channel strategy on branches, and recently, banks and capital firms have been expanding use of loan agents.
Financial groups are expanding use of comprehensive branches, collaboration between insurers and securities firms is expanding, and BIBs are being converted to BWBs.
(Overseas Financial Firms) Although channel strategies focus on agents, the use of comprehensive branches is growing to become a new branch channel
(U.S.) Although banks are focused on branches, their channel strategies focus on customer proximity and convenience, and independent agents account for a growing portion of insurers' agent channels.
(Japan) The use of comprehensive branches by financial groups is growing, branches are focusing on advisory services, and customers are being steered to ATMs for simple tasks.
(UK) The use of branches is declining due to widespread use of IFAs. However, the branch channel is changing rapidly to focus on loan centers, In-Store-Branches and independent agencies.


Analysis of In-Person Channel Strategy

(Efficiency of Comprehensive Branches) The synergies generated by existing comprehensive branches should be reexamined, and their business scope should be expanded.
(Changing Branch Functions) Branches currently focusing on selling financial products to customers that come to the branch. However, branches' wealth management advisory functions should be strengthened, and the focus should be on gaining customers' confidence.
(Flexible Branch Management) Branches should be differentiated according to location of product.
(Response to Emerging Sales Channels) The introduction of specialized financial product sales firms and IFAs (Independent Financial Advisors) will accelerate the separation of business activities and the diversification of sales channels. As a result, a comprehensive strategy is necessary at the Group level.