Omnichannel: the new normal for retail banks

Alison Wilkes is general manager, EMEA Banking Division, FIS

With customers expecting consistent service across all channels, banks must step up to the plate and streamline their processes when it comes to customer interaction. Using the omnichannel approach, they’ll also reap the rewards of better customer intelligence and a clear idea of how best to spend precious budgets, writes Alison Wilkes.

Is ‘multi-channel banking’ old hat?  When it comes to retail banking, ‘omnichannel’ is the new nirvana. Omnichannel is far more than just flavour of the month: banks need to raise their game to meet customer expectations, keep them on-board and be able to deliver a seamless experience over any device.  Omnichannel is not the latest buzzword, it is a serious business-focussed solution that will deliver bottom line benefits.

Multichannel was about opening up channel choices and encouraging customers to use the one most appropriate for their needs and those of the bank. In some cases this simply meant routing customers to the cheapest channel. For the customer, omnichannel focuses on providing a seamless customer experience that delivers focussed advice, products and service. For the banks, it is an opportunity to really understand the customer, streamline systems and focus attention on the most profitable.

The omnichannel vs. multi-channel approach

So what is omnichannel banking and how does it really differ from its cousin ‘multi-channel banking’? The multi-channel approach came to the fore several years ago, when banks launched online platforms and encouraged customers to use call centres for their everyday banking needs. The number of touch points increased, but with expansion came more complicated IT systems. Additional channels were bolted on to legacy platforms but many banks struggled to offer a joined-up approach to servicing customers. As consumers ourselves, we intuitively know this to be the case. For example, how many times have you been offered an unwanted loan by your branch and subsequently been targeted with the same question while carrying out your online banking?

From the customer’s perspective, omnichannel banking continues to offer access to financial services across a variety of channels and introduces more consistent interactions with the banking brand across the various touch points. The bank will be able to analyse the information being fed in from different channels so that it can build up a detailed and accurate picture of the customer’s preferences and behaviour. The boom in smartphone apps coupled with this more detailed customer view means that banks will be able to offer app-based services such as budgeting or financial planning via the mobile: a relatively untapped service to date.

Meeting customer expectations

Today’s consumers are increasingly sophisticated and are already accustomed to targeted offerings  from companies, such as Amazon, that make relevant purchasing suggestions regardless of the device in use. So it comes as no surprise that these same customers will come to expect a similar service from their bank as well. With omnichannel banking, customers will have a consistent experience whether accessing their bank via a mobile, tablet or visiting a branch in person. If the banks don’t step up and provide this omnichannel experience, there are plenty of other institutions who, unencumbered by legacy systems and cultures, are already relishing the opportunity.

Research from Google has shown that 46% of people managing their finances online switch between devices before completing the activity. Often customers will start research on a smartphone before migrating to a PC or tablet to dig deeper into the information they need. This won’t come as a shock to many who are used to making payments on the move but still revert to using a laptop to open a new online savings account. A streamlined omnichannel approach to banking services will introduce a smooth customer experience through several changes in device, ensuring the transaction is completed without a hitch.

Leveraging the data

From the bank’s perspective, a joined up, 360 degree view of all of their customers’ activities offers clear benefits. Banks are uniquely placed to understand their consumers. They see their spending and income patterns, their savings profiles and by leveraging this information they receive from the various channels they can build up a detailed customer profile. This is when data points become valuable information.

We’ve seen retail banks learn from supermarkets that are skilled at engendering customer loyalty by using online and branch purchase histories to provide highly targeted and relevant offers.  Bank marketers must start to leverage the valuable data they hold across the entire suite of channels to communicate effectively with customers and improve the bank’s chances of success when trying to sell relevant financial products.

Achieving the omnichannel goal

So what can banks do to get to this omnichannel goal? It’s clear that continuing to operate in siloes amidst a tangle of legacy systems isn’t the answer.  Utilising intelligent strategies to integrate disparate digital and physical channels into a single, seamless experience has to be a priority. By analysing the activity and priorities of their client base, banks can tailor offerings to address the priorities of each individual customer. Mass, low profit parts of the business can be serviced accordingly as can high margin services and clientele. Streamlined, integrated systems, a single customer view and optimal customer experience are all objectives to work towards. It will be banks that take the leap that will ultimately get the edge over the competition. Omnichannel can deliver much-needed bottom line benefits and provide banks with a viable plan to retain customers and make them more profitable.