Are distribution channels mandatory for the retail banks?

The extension of services through various channels benefits Banks in terms of reducing cost of transaction and offers convenience and flexibility to the customers.Although the delivery of banking services(mainly remittance facility) through mobile phones is desirable it has to still pass through various regulatory issues before all the banks commence extending mobile banking facility.

As regards, distribution of third party products through Bank branches is helping in  maximising fee income opportunities for the Bank.In order to earn that extra fee Banks are hard selling third party products to their customers which has to moderate to really keep the customer satisfaction high.

I agree with you,increased competition and margin pressure is forcing banks to focus on customer relationships; developing a distribution strategy which encompasses new channel, business intelligence and security technologies, among others, will be key to future success. This Datamonitor Market Focus report provides visibility into the distribution dynamics in the European and North American retail banking markets, and will help you to gain market insight to assist in your strategic planning and go-to-market strategy.

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To me, yes banks  should have distribution channel as it will not only facilitate customers as well as banks to provide services to the customer and to reduce delays that can occure because of non presence of the bank.