It’s almost a sad commentary on our times that “omnichannel banking” already sounds like a cliché. At the very least, it has the whiff of a potentially interesting trend that, like so many other potential game-changers, has come and gone.
That’s categorically not the case. In fact, omnichannel banking is only just taking hold. In this digital age, trends are indeed fickle. New technologies come down the pike every day, entire platforms shift on a regular basis and app-driven capabilities go from adoption to obsolescence overnight. But that’s exactly what makes omnichannel banking so vital: it enables the entire financial services industry to capitalize on each technology-driven behavioral change as it occurs, in the process benefitting every constituency. Consider this stat: according to IDC Retail Insights, “omnichannel consumers spend 15% to 30% more than multi-channel consumers.”
It’s true that branches and ATMs are still the predominant interaction points with consumers (at least globally). At the same time, the unprecedented rise of digital and mobile channels is driving wholesale changes. Integrating physical, desktop and mobile channels will essentially enable consumers to interact with financial institutions (FIs) any way they choose.
While financial institutions are doing their part to keep up, most still take a multi-channel approach, which entails initiatives to optimize the experience in each channel. However, these efforts are typically not integrated. For the customer, this means that the ultimate experience is less than ideal; for the institution, it involves missing opportunities to cross-sell and losing the efficiencies that come with integrated channels. These missed opportunities include:
ATM: Right before and after a transaction is conducted, the screen features an ad. It’s invariably generic and non-targeted, but what if it wasn’t? What if it picked up on the details of the specific consumer and delivered a targeted message that serves as a call to action?
Branch: Tellers are required to relate to each customer a laundry list of that branch’s offerings. It’s fair to speculate that most of these products are in no way relevant to every customer. Imagine instead empowering tellers to target their messaging, gaining efficiencies and enhanced opportunities to strengthen engagement. What if the teller worked off a screen that provided instant, data-driven feedback on deals the customer might actually be interested in, based on his or her information?
Mobile: In 2012, there were 33 million U.S. mobile banking users; by 2016, that number will nearly triple to 96 million, according to Aite Group’s 2012 Mobile Banking Forecast. Digital Insight research also shows that mobile consumers access their financial information 66% more frequently than online non-mobile users, providing additional opportunities to cross-sell. Yet despite the hype, most customers still can’t do everything they want to do with their smartphones, just as FIs, don’t take advantage of the opportunities to cross-sell.
Cross-Channel: The ability to suspend an experience in one channel and pick it up in another is still more wish than fulfillment for most FIs. What begins at the branch normally doesn’t carry over onto the laptop or the tablet. Even when technically possible, the experience is far from seamless for most.
So, given the opportunities, what might an example of an omnichannel experience look like? The options are as varied as they are plentiful, but here’s one snapshot. First, the customer starts with a mobile banking experience, such as a “pre-staged” transaction via the ATM. After the customer picks up cash at a nearby ATM, he or she receives an e-receipt on the mobile device (text or email) with a data-driven, targeted offer based on recent behavior and data. For example, if the customer has a 6% rate mortgage, the institution can promote a better option with dollar savings right on the e-receipt and an easy one-click call to action. Alternatively, the interactive teller or branch relays a complementary message during the next contact.
The entire communication is simple, direct and relevant. It features convenience for the customer and added business for the institution, leading to greater loyalty at lower cost.
Here’s another scenario that builds on the ability of FIs to leverage geo-location to reach target customers on their mobile devices. First, the FI selects which type of location to target, for example, car dealerships. Next, the bank explores existing offers at these locations and identifies competitive options in-house so that select customer segments can receive mobile, location-specific offers based on propensity models and additional criteria. Interested customers select the offer and go directly to the offer page, which has options such as, “Are you interested in a car loan?” and offers additional customer service and reminders to interact with this offer later.
The process is simple and directly targeted to the user’s needs, as identified by a combination of geo-location and in-house data. It initiates a process that inspires loyalty, enhances customer service, drives new business and cuts costs by reducing other forms of promotion, such as advertising.
Ultimately, omnichannel banking does exactly what’s needed in this multi-channel, multi-device user environment: it eliminates the silos of multi-channel banking and introduces more consistent interactions across channels, enabling FIs to leverage data from all interactions to develop a more holistic view of current transactions and future possibilities.
Mr. Hughes is general manager of Digital Insight and chief technology officer of NCR Financial Services, a division of Duluth, Ga.-based NCR Corp. He can be reached at Jeff.Hughes@ncr.com.