By now it’s no longer clever for banking observers and analysts to blithely opine that today’s financial institutions need to go beyond multichannel thinking all the way to omnichannel. It’s kind of meaningless without perspective—kind of like saying “To infinity—and beyond!”
At the same time, omnichannel clearly is part of the future of banking. All sorts of factors make it inevitable: demographics, economics, customer relationship management, and, of course, technological enablers.
Omnichannel presumes multichannel, and takes it several steps further. Most customers already access their banks through several channels—branch, online, mobile, ATM, and call center. IBM offers a convenient definition of omnichannel: “It is about a seamless and consistent interaction between customers and their financial institutions across multiple channels. While multichannel is focused on transactions, omnichannel focuses on interactions.”
Judged, however, by the number of observers who have opined recently (blithely or not) on how banks can successfully adopt the omnichannel approach, it appears that it is still in the early stage of adoption in the industry. These opinions tend to take the form of lists, which is handy.
As a public service, here are several such lists culled from a recent internet search of the subject “omnichannel banking” and edited for space. (Links follow to the source documents):
Banks must adopt a three-tiered approach to building an omnichannel presence: capturing customers’ intent, managing systems of engagements, and deriving and utilizing actionable insights.
• Capturing: Banks must utilize different channel analytics techniques to capture the intent behind interactions across channels.
• Managing: The intent captured across channels will be in all kinds of forms…They must be stored and managed separately in a system of engagements from the structured, trusted system of records.
• Analyzing: Big data technologies are mature enough for banks to derive actionable insights reliably and quickly.
A comprehensive and shared vision is necessary as to where the bank wants to get and the role it is prepared to play.
• Omnichannel distribution and architecture: By having a retail-like distribution strategy that gives every channel the same sales and service functionalities, the same interaction logic, and total integration, banks give customers a seamless experience and full freedom to choose.
• Customer experience management: As traditional processes of presale, sale and post-sale are becoming more linear and woven into the whole banking experience, every interaction needs to be sales- and service-oriented in order to catch all the interaction opportunities.
• Ecosystem set up and orchestration: Banks can leverage the existing ecosystem to connect and fulfill customers’ needs through an insightful and tailored experience.
• Customer analytics: Banks should use pervasive analytics based on internal, external, and sentiment customer data to create a deep, intuitive, and actionable understanding of overall customer needs, and driving capabilities such as next-best action [or] personal finance management.
• Multichannel CRM: Banks should…create a holistic view on customers and deepen the relationship.
• Corporate banking: Banks can extend…the omnichannel interaction…to accommodate specific needs (treasury, payments, and trade channels) while also leveraging the bank’s ecosystem to gain direct targeted access to consumers.
To connect the traditional and digital experiences [of] your customers…you need a clear understanding of what your customer expects from services like bill pay, online and mobile banking, peer-to-peer payments, or mobile wallets, as well as the go-to-market strategies and technologies to uncover new sources of revenue.
• Enhance the customer experience: Your business strategy, performance metrics, operations, people, and technology must seamlessly come together, encapsulated in business processes to meet customer expectations during each step in the customer journey.
• Add digital and eliminate silos: Banks, payment providers, and card networks have to think now about how to build for the future model of banking. Simply copying and pasting new banking services into emergent channels is not enough.
• Leverage data and insights: Analytics are central to understand—and respond to—consumer behaviors.
• Focus on integration and infrastructure: Omnichannel is all about interoperability. The transformation to omnichannel capabilities will require more integrated and scalable technology.
• Engage and govern: Omnichannel innovation touches all areas of the business, so getting executive buy-in is probably the biggest obstacle that banks may face…Business engagement enables ownership of tasks, guides prioritization of initiatives, and is responsible for the alignment of people, process, and technology change to help realize omnichannel goals.
McKinsey & Company:
The transformation journey requires action to harness all the energy and capabilities of the bank. There are many approaches…but we believe pragmatism should be the guiding principle.
• Create your own distribution vision: The vision needs to be articulated from three angles: the future distribution mix, customer experience opportunities, and strategic orientation.
• Develop a portfolio of mini-transformations to deliver the vision: The bank needs to select the most important things it wants to change so as to translate its vision into action…Many of these mini-transformations will be projects in themselves…A series of mini-transformations increases the chances of success and will deliver immediate benefits.
• Lock in an integrated roadmap and execute: Once all the mini-transformations have been sketched out they should be brought together again in an integrated transformation roadmap. Banks need to: maintain and monitor the portfolio of mini-transformations; elaborate a high-level business case for pursuing them and monitor progress; and identify the implications for IT and governance, and monitor accordingly.
Of course, take all this with a grain of salt. Some common threads are apparent, though: the importance of analytics, of having a plan, of cutting across silos, and, most important, concentrating on what the customer wants.
But it’s also obvious that there are multiple ways of getting from here to there.
Sources used for this article include:
- Merger Helps Bangor Savings Bank Grow to $6 Billion in Assets
- Alternative Finance Provider in US ECapital Corp Acquires UK Lender
- Bank Apps Being Used More Than Ever, ABA Finds
- Enhancing Diversity & Inclusion in the Financial Sector: Practical Strategies for Recruiting and Retaining Diverse Talent
- Bank of America to Co-head Quest for Merger Deal for Ailing Italian Bank