Omnichannel – The Future of Banking?

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Across the world, businesses know that whatever the nature of their transactions, customers always like to be treated like Kings. Attending to customers, taking care of their needs assumes paramount importance. If neglected, a customer can not only take his business to a competitor but also harm the bank’s image through negative word of mouth.

In this age of 24/7 connectivity, banks are tasked with understanding the customer’s behavior, their frequent transactions, and serve as channels for carrying out financial, but not limited to banking transactions. Customers now access their bank accounts anytime they want to, and even use multiple devices to access and store their valuable information.

This explosive growth of customer interaction touchpoints has blurred the lines between traditionally defined channels. This is where the Omnichannel strategy helps. What appeared to be a breakthrough in the early part of the decade, is now perceived as mainstream. With omnichannel banking, financial institutions can cut costs through process automation and boost revenues thanks to superior customer experiences.

What makes Omnichannel Important? Why is it Omnipresent?

Omnichannel serves the customers with same services using both digital and offline. Customers perform the same set of operations/transactions irrespective of whether they are visiting the branch, using a mobile phone, a personal computer or even visiting the ATM.

Is that all there is to Omnichannel banking? No. A true omnichannel banking system allows a few more functions. They are:

1) Digital-first approach.

2) Anytime customer support.

3) Real-time data synchronization between different channels.

How different is a bank/financial institution’s behavior from an omnichannel behavior?

1) Omnichannel systems are different because they are primarily customer-centric, as opposed to traditional bank-centric behavior. Banks have always focussed on managing clients’ money reliably and processing their transactions accurately. The focus was on records compared to now that is on their behavior. A customer-centric view, on the other hand, will focus on retaining and engaging customers through various channels.

2) A bank or a financial institution focus on understanding a customer’s needs through data and analytics. A customer-centric view, on the other hand, focusses on understanding a customer’s wants and anticipates their actions through data and analytics.

3) A bank’s primary understanding of a customer is through records. On the other hand, a customer-centric behavior will require understanding the customer through engagements and actions.

4) A bank traditionally depends on service-oriented architecture (SOA) where applications are integrated. SOA ensures components can interact with each other in a standardized way and therefore allows for easier integration with third-party applications and greater reuse. Omnichannel, on the other hand, is built on Big Data, a technology that allows data in all kinds of varieties to be captured and analyzed.

Now that we have understood omnichannel behavior, the question arises how can this technology be successfully deployed? A three-tiered approach to building an omnichannel presence can be taken.

1) Capturing information – When it comes to understanding customers, no financial organization can stay behind in understanding why a customer behaves in the way he/she does. It is imperative to understand and capture various channel analytics to know the customer’s reason for a particular interaction. This is possible when a customer’s online behavior is analyzed. The information collected, subject to prevailing laws and the customer’s explicit consent helps understand their lives, emotion, and behavior through the usage of mobile devices, contact centers, and social media. This, in turn, helps the bank to target the customer with the exact product he/she may require at a specific time.

2) Management of data – Predicting customers’ wants, and intentions can be a difficult task. These things cannot be predicted with absolute conviction, but a behavioral analysis via social networking platforms and application interactions can help identify their spending pattern. This analysis helps the bank to keep solutions ready for the customer even before he/she needs them.  This, in turn, results in more business and effective customer retention.

3) Analysis of data – Big Data today allows banks to derive actionable insights reliably and quickly. These insights enrich the understanding of customers and can be invaluable for banks to provide intelligent and differentiated services, as well as more targeted marketing offers.

Even though digital engagement is growing, physical interactions and the mix between teller and self-service play important roles in many consumer journeys, especially in the small and medium-sized business (SMB) segment, where SMB owners often have physical storefronts and use financial services constantly.

As is usually the case with technology, interest, and usage varies from one individual to another. And customers always want to have the freedom of choice, if not the last word. Surveys have indicated that customers prefer using more tailored self-service technology but would also consider switching banks if they were forced to use self-service instead of going to a counter. A survey conducted by Diebold Nixdorf shows 9 percent of consumers prefer to bank exclusively at bank branches. 11 percent prefer banking exclusively through digital channels. 25% of customers prefer to have an equal balance between physical and digital banking experience. 55% of customers have preferences that are either exclusively digital or personal.

A connected world, therefore, forces banks to wake-up and keep the customer first. Banks can no longer focus on just one area. Instead, they must focus on an omnichannel engagement with their customers. Gone is the age when the ATM was an extension of a bank. Now banks are vying to be at their customers’ service 24×7 by making inroads into their mobile phones.

CONCLUSION

Customers are not ready to accept a ‘one size fits all’ treatment anymore. They want their individual preferences to be noticed and respected. Having a solid multichannel infrastructure and providing an omnichannel experience allows customers to enjoy seamless, personalized service across every touchpoint. In this digitized world, banks must capitalize on the wealth of information provided by customers, and an omnichannel, instead of a multi-channel approach, can decide if the bank will flourish or perish.

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