What is Bank Distribution Channel? Definition of Bank Distribution Channel, Bank Distribution Channel Meaning and Concept

The banking distribution channel is the physical or virtual means by which a financial institution offers its services.

In its beginnings in the Middle Ages, banks only had the face-to-face channel to deal with their customers. However, today operations can be carried out remotely and electronically.

An example of a banking distribution channel are ATMs from where you can transfer money, pay for services, withdraw cash, among others.

Most representative banking distribution channels

The most representative banking distribution channels are:

  • Face-to-face channel: It is the most traditional means of assisting the public. It refers to the service provided at the window of all bank branches.
  • Agent: These are service points installed in different businesses that do not belong to the financial institution, for example, a supermarket. Thus, customers do not need to travel to the bank office. Instead, they go to the nearest agent to perform various operations.
  • ATMs: These are self-service machines from which various transactions can be made, mainly bank transfers and cash withdrawals. There are even some ATMs that receive deposits. One of their main advantages is that they work 24 hours a day without interruption.
  • Telephone banking : The bank makes a customer service number available to the public. Usually, a voice mailbox answers that gives options according to the desired operation or query. If necessary, the user is contacted with an advisor. This channel is usually useful, for example, in case of loss or theft of the debit or credit card, since the call can be initiated from anywhere and the opening hours normally cover 24 hours a day.
  • Online or online banking : Financial institutions have designed virtual platforms to carry out a wide variety of transactions. This, from the computer and anywhere with an Internet connection. To enter online banking, more security filters are usually required compared to other channels. For example, the use of an additional password may be requested to the one that the customer has already assigned to his card. In this way, it seeks to avoid fraud.
  • Mobile applications: They are like an extension of online banking. In this case, we refer to programs to download to the smartphone, from where the user can carry out financial operations.

It is worth mentioning that telephone banking includes the use of text messages. These serve, for example, so that the financial institution offers the client extensions in its line of credit.