While the world’s first ATM was introduced by Barclays Bank in 1967, these automated teller machines went truly mainstream only in the 1980s. They grew in popularity as most customers enjoyed the convenience and speed of carrying out their financial transactions without having to go to a physical bank branch. But there was a section of the population that still preferred to go to the bank for their transactions as they missed the human interface. And today, as digital experiences and anytime, anywhere access to banking services is rapidly becoming the norm, there is a sizeable population that still wants in-person interactions with their banks. Despite the digitization drive caused by the pandemic, two thirds of respondents in a survey said they like having access to physical bank branches in their locality.1 They perceive it as indicative of the bank’s stability and availability. Evidently, banks cannot completely do away with physical branches, even as they accelerate their digitalization drive. Instead, they must focus on ensuring a seamless and consistent experience across all channels.
Understanding Omnichannel Banking
Gone are the days when customers had to walk into a brick-and-mortar branch to avail of banking services. Today they can access their banking accounts on the internet, on mobile apps, on the telephones, at ATMs, in addition to physical branches. And as the business of banking grows increasingly customer centric, banks must focus on delivering seamless omnichannel experiences. Omnichannel refers to the ability to offer the same set of services across channels using a common database. It is also the ability to perform a transaction or deliver a service across multiple channels, n so that a consistent user experience across channels can be delivered. In comparison, a multichannel experience is a product or service centric approach that is limited to providing access across channels.
Multi-channel experiences are not customer friendly and inevitably lead to dissatisfaction and even attrition. For example, a customer may have declined a loan offer on a phone call with a call center executive or by responding to a marketing email. But without a common database and functional architecture across the channel, their response is not centrally recorded or easily referenceable. As a result, the customer may receive several more messages about the same offer on other channels, leading to frustration.
Why Omnichannel Banking Works for Customers
Let’s consider an example of omnichannel banking to understand how it is different. Joe is a business owner and wants to deposit some cash into his bank account. While he can send his employee to the branch to deposit the cash, he doesn’t want his employee to perform any transactions directly to ensure confidentiality of sensitive financial information. So, Joe logs in to his mobile bank application to initiate the transaction online. He enters the transaction details like deposit account details, amount to be deposited etc., and at the end of the process receives an auto generated reference number. He then hands over the cash and reference number to his employee. The employee completes the transaction offline by visiting the branch, where the personnel retrieve the transaction details using the reference number and completes the cash deposit transaction. Here, Joe is provided with an integrated experience across channels.
Key Implementation Considerations
Apart from improving the customer experience with unified banking services across multiple channels, omnichannel banking also helps banks position their products and services better. For example, the customer can be offered an instant loan at an ATM or mobile interface, which can then be processed further through the same or any other channels. Seamless customer support across multiple channels is another aspect that can improve customer experience.
There are a few elements to focus on when implementing omnichannel banking. Banks must orient the channels and end points through which products and services will be delivered. Digitalized branches, ATMs, video, mobile, and social channels need to be enhanced to deliver an integrated experience to the customer. In fact, video interactions and conferences can be helpful in ensuring customer comfort and confidence and must be facilitated via digitalized branches, mobile, and social channels.
An integrated data and functional architecture and real-time synchronization is essential for omnichannel engagement models. Relevant customer data must be visible across multiple channels. It must be possible to collect and integrate data from multiple channels and derive a 360-degree view of the customer; with which relevant offerings can be identified and positioned. Legacy banking systems cannot scale up to capture and analyze data comprehensively across multiple channels. But banks can choose to deploy robust and specialized middleware solutions that can sit on top of their legacy cores to deliver the agility and powerful data processing capabilities that omnichannel banking models require.
The business of banking is changing rapidly driven in no small part by evolving customer expectations and increasing competition from fintechs and tech giants. As banks strive to hold on to their leadership positions and continue to grow their revenues, they must move to customer-centric models. And omnichannel experiences are a critical driving factor of a customer-centric strategy. Banks must focus on fine tuning their omnichannel strategies with a robust technology foundation to ensure customer satisfaction and retention.
