Omnichannel Banking – Myths and Realities

Habits die hard! It was the last day of bills payment and as usual we forgot to do the needful as we headed out on a road trip along the rugged countryside. With this thing nagging me, the first thing I did at our first pit-stop was to take out my phone and access the bill payment app. With poor to zero connectivity in that remote rural area, my next search item was an ATM. Mercifully there was one at the gas station with an option for bill payment! Happily, I set about doing the needful, but to my chagrin, my relief was short-lived. This supposedly helpful bill-payment option in the ATM was unable to display my registered billers and instead asked me to enter my account number with the service provider. Who remembers account numbers? After a feeble attempt at jolting my memory for any signal, I gave up, frustrated.

If you thought I gave up, you are wrong. The ordeal wasn’t over just yet. A roving eye was on the lookout for a considerably stronger data connectivity and as soon as my wife told me the phone was alive, I parked on the highway shoulder and set about paying the bill. However, the mobile payment option only allowed payment using my account, with no choice of credit card payment generally available on internet banking. Ah! So much for convenience! Making a payment through my Savings account finally, I logged out-still a tad frustrated. Have you gone through similar agony?

This incident brings an interesting question to my mind-is Omnichannel Banking a myth or a reality?

omnniChannal

Let us look at the myths.

  • Having presence across all channels is multichannel and not Omnichannel: Many banks today offer their presence through ATMs, Kiosks, internet banking, tablet banking, mobile web banking, mobile banking applications, social media banking and more, apart from conventional branch network and extension / service counters. This is called multichannel banking.
  • Omnichannel is not about only consistent look and feel: Having a consistent look and feel across all channels is one part of the whole story and it cannot be confused with the story itself. Look and feel only caters to the cosmetic part but it cannot represent the complete customer experience.
  • By offering multiple channels, customers will move to self-serviced channels and will help the banks to cut cost: One has to understand the channel behavior and usage pattern before making such assumption. Alternate channels complement existing channels, but do not completely replace them. The bank has to use right tools to engage customers through these channels. This strategy will help them to reduce certain costs and explore new income avenues through additional / value added services.
  • Enterprise Service Bus or Middleware exposing APIs will do the magic: Some of the tech-savvy banks have been arguing about by having ESB or Middleware they will be able to expose all back-office services / transactions as APIs which can be presented through any channels. Once again, ESB / Middleware is an enabler that facilitates data exchange between the back-office system and frontend channels. It does not replace a need for independent channel layer which can manage channels more effectively and deliver the consistent user experience across channels.

Not all bankers subscribe to these myths. In reality, this situation arises due to many factors.

  • Heterogeneous technology platforms: With the evolution of technology, Banks keep acquiring technologies and once acquired it is not easy to replace, technically as well as financially. This results in heterogeneous technology platforms which results in inconsistencies across channels or point of interactions.
  • Different Vendor – Different Experience: Continuing from the earlier point about acquiring technologies at different point of time, these technologies or solutions are often acquired from different vendors. This results in delivering different experience to the customer.
  • Lack of single team being responsible for customer experience: In many banks Internet Banking, Mobile Banking and channels like ATMs / Kiosks are handled by completely different business units. Hence there is no cohesive thinking about customer experience delivered across all points of interaction.

Having talked about myths about Omnichannel banking, let’s understand what Omnichannel means in the commoditized banking world.

  • “The Customer First” Approach: As per the conventional bank thinking, customer used to approach the bank to avail the product and services. In the commoditized market, banks are chasing the customer to offer the products and services. And given the number of options available to the customer from banking and non-banking players in the market, onus is on the bank to be accessible to their customers. By this theory, Omnichannel Banking puts the customer first and entire strategy revolves around the customer. To offer Omnichannel Banking, the bank has to understand the customer and customer’s world. They have to be present in the customer’s world.
  • Empower the customer to define the experience they want: In the world on Internet and mobile most of the service providers allows the customer to define the experience they want. If you look at the telecom service providers they allow the customers to define their plan, caller tune, data sharing plans, close user groups and so on… Banks cannot be any different. They should allow the customers to define their experience. Experience here is not restricted to look and feel. But it allows the customers define limits, security levels, preferences, favorites, add billers, beneficiaries, manage alerts and reminders etc.
  • Consistent User experience across all channels: Once you empower the customer to define their experience, their expectation will be to get consistent user experience across all channels, whether it is on internet or mobile or ATM or call center. They would expect the bank to remember their preferences or limits. If the customer has set up the beneficiary and limit for that beneficiary, then whether they are making payment through internet or mobile or at ATM, the same registered beneficiary should be available across all channels and the limits defined by the customer should be enforced. If the customer has configured the transaction password, the same should be prompted across all channels.
  • Be present in the customer’s world: Understand your customer’s world and be present in their world, subtly. This will help the bank to engage with their customer. If the customer is on Social Media, be present on Social Media or bring Social Media into banking. If customer is spending time on eCommerice Sites, either you be present on eCommerce at point of Financial Transaction or provide options to customer to shop while they are banking with you.

“Bank cannot respond to these threats simply by” being more digital,” – i.e., closing down branches and rolling out better mobile & online banking services. If banks want to defend their turf against the Googles and PayPals of the world, they themselves must move further into the commercial lives of their customers. They must learn to play a greater role not just at the moment of financial transactions but before and afterwards as well.
Wayne Busch and Juan Pedro Moreno
Harvard Business Review

Keep listening and engage

As you engage more and more with customers, keep listening, to understand their likes, dislikes, spend patterns etc. And as you listen and analyze the data collected, respond with suitable products, services and offers to stay engaged with the customer.

Be open to changes and respond quickly

Both customers world and their point of interaction will keep evolving based on prevailing socio-economic-technology-regulatory environment. Be open to these changes and act fast. Embrace the open architecture that allows you to launch new channels or new services or respond to changing environment fairly quick.

If Banks understand these realities and implement Omnichannel Banking with Customer First approach, it will deliver to its objective, whether it is to improve the bottom line by bringing down servicing / operational costs or improving revenues by increasing transaction velocity or acquiring / retaining customers.

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