Higher Education: Another Lesson in Multichannel Delivery

Higher Education: Another Lesson in Multichannel Delivery
Celent recently published a report, Branch Boom Gone Bust: Predicting a Steep Decline in US Branch Density. As expected, some misunderstood the report as another piece decrying the death of the branch channel. It isn’t. Instead, the report advocates embracing a “right-sizing” of the branch channel as a means to strategically invest in retail delivery models more appropriate for the market’s rapidly changing consumer preferences. More recently, FMSI released its 2013 Teller Line Study, demonstrating the continued decline in branch foot traffic and growing per transaction costs experienced by its many, mostly smaller bank and credit union clients (see below). These aren’t new trends, and they’re not confined to the US. Yet, too many banks remain invested in historic operating models – despite the growing body of evidence that suggests dramatic change is needed. FMSI 2013 I found one example of this occurring in higher education to be particularly fascinating – and bold. The Georgia Institute of Technology (Georgia Tech) plans to offer a $7,000 online master’s degree to 10,000 new students over the next three years without hiring much more than a handful of new instructors. Georgia Tech will work with AT&T and Udacity, the 15-month-old Silicon Valley-based company, to offer a new online master’s degree in computer science to students across the world at a sixth of the price of its current degree. The deal, announced Tuesday, is portrayed as a revolutionary attempt by a respected university, an education technology startup and a major corporate employer to drive down costs and expand higher education capacity. The story has been widely covered. If closing branches sounds like heresy to retail banking executives in dire need of low-cost revenue growth, Imagine what the idea of offering an online master’s degree for less than 20% of the cost of a traditional, in-person lecture format will do to tenured professors heavily invested in their own traditional delivery models? Some bankers argue the inadequacy of digital channels for sales because so many consumers desire a face-to-face experience for “complex” product sales. Is not a master’s degree complex? What about buying window treatments? Blinds.com has become the largest purveyor of window treatments through its online presence. But, buying blinds can be complex. There’s sizing, placement, color choices, degrees of light transparency, texture…the list goes on. Blinds.com addresses this by offering a by-appointment online videoconferencing experience it calls face2face. Consumers schedule an appointment with an expert online for a free video consultation. Consumers send blinds.com a picture of the window(s) in question, and the design consultant provides expert consultation at a convenient time – including showing you what your windows in your room would look like with various treatment options using the picture you provided. To be clear, it’s too early to read the results of Georgia Tech’s experiment, but I applaud its aggressive approach to dramatically alter the cost and accessibility of higher education. Similarly aggressive banks step forward!
Bob Meara About Bob Meara

Bob Meara is a senior analyst with Celent's banking practice and is based in Atlanta, Georgia. His research focuses on the branch and ATM delivery channels, customer analytics and check and cash payment processing technologies. A well known authority on remote deposit capture, Bob has led multiple consulting engagements including proprietary research projects involving financial services hardware, software and the impact of self-service on branch banking.

Before joining Celent, Bob was the director of product marketing at Alogent. In this role, he positioned and launched a series of Check 21 payments solutions.

Prior to Alogent, Bob also held positions in marketing and brand management at BellSouth, Hayes Corporation, and Procter & Gamble in addition to being a commissioned naval officer.

Bob earned a Bachelor of Science in Applied Physics and Electrical Engineering from Case Western Reserve University.


  1. Bob,

    I completely agree. “Right-sizing” of branches really seems to be the only sensible way to look at our changing marketplace. Although it is interesting that Georgia Tech has taken a huge step in the “non-traditional” direction with an online master’s degree in computer science, that is another huge step away from an online master’s degree in, say, brain surgery. This can be likened to a comparison between remote deposit capture and getting a mortgage on a mobile phone. They are leagues apart in what both the bank and the customer are willing to trade for the sake of convenience. I do think that we will get there eventually, but the process of realigning bank channels with consumers’ changing expectations will take time and imagination.

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    • Bob Meara Bob Meara says:

      Well said, Alex. It’s amusing to watch the branch advocates shun the movement to digital enablement and the digital zealots shun any investment in branch transformation. IMO, both are imperatives precisely for the reason you state – the process will take time ane imagination.

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