Turning on omnichannel: Why banks need to think beyond silos

The e-commerce era pushed many retailers to the brink: Consumers don’t need to go to the store, right? Perhaps. But smart companies survived, thrived and saved themselves by offering consumers as many consistent and seamless options as possible—letting them quickly jump between the offline and online worlds and learning about them well enough to anticipate their needs and wants.

So what’s the secret sauce? Actually, it’s a not-so-secret source: in a word, omnichannel.

Savvy retailers got smart and saved themselves by going onmichannel. Now it’s time for banking to get in the groove. There is a “a vast opportunity for banks to use omnichannel—or channel-less engagement—as a true differentiator at this point in time,” says Christine Parker, vice president and industry market leader of financial services at Pegasystems, a customer engagement software company. “If financial institutions take advantage of it now, they’ll be ahead of the game. But time is of the essence.”

Multichannel integration may suffer from underinvestment. While banks aren’t exactly viewed as tech innovators, making it a priority “helps create customer loyalty, driving deeper relationships and customer value,” Parker says. “Providing the right customer with the right action at the right time boosts the bottom line.”

Indeed, BCG last year estimated brands that personalize experiences for customers by integrating advanced digital technologies and proprietary data have seen revenue climb 6 to 10 percent. That’s up to three times faster than those that do not. It also estimated that in the next five years, the retail, health care and yes, financial services companies that get this right will join an elite group. It could boil down to “a revenue shift of some $800 billion to the 15 percent” of companies that succeed. That’s quite the incentive to get omnichannel firing on all cylinders.

Back in 2016, BAI ran a contributor piece that forecast as much in general terms, so it’s not that banks don’t understand it. Rather, the process just isn’t easy, says Marko Koic, solutions marketing manager with Infobip, an onmichannel communications platform.

“Banks know what they should do and are willing to do it,” Koic says. “However, due to the complexity of their systems and the sheer time needed to make some significant changes, that process takes some time. Fintechs have helped to speed up that process but it’s still not going as fast as banks would like.”

Parker agrees: “Banks have been limited by a combination of their technology systems, data integration capabilities, and security and business policies,” she points out. “Financial services institutions have historically approached channel strategy and development in a decentralized manner, with limited consideration to consistent and integrated cross-channel functionality.”

Why is this? Simply put, “There was little demand—and technical capability—to provide a better customer experience,” Parker says.

But things have changed rapidly as Amazon and Google transform the world into an “always on, everywhere” landscape. Consultancy PwC distributed “Making Omnichannel Work: The ‘To Do’ List for Banks,” a white paper that accurately summed up the issue:

“It’s tempting to think of omnichannel banking as a technology issue … but delivering a consistent, appealing customer experience—online, in a branch, by phone, on an app—requires a different way of thinking. Everyone in the bank has an important role, including channel managers, customer teams, product developers, marketing and sales leaders, and those in charge of technology and analytics.”

The report pinpoints five omnichannel sticking points. These include:

• organizational and operational silos
• product-centric (instead of customer-centric) cultures
• nonexistent or powerless customer advocates
• immature customer listening skills, and
• cumbersome product-development processes.

The PwC report also offers eight tips for banks to reshape, rethink and reorganize their omnichannel outlook:                                    

• Develop new skills. Banks should redefine many front-line roles to emphasize cross-platform behavior and they’ll need to hire, train, and compensate differently.
• Reorganize by customer need. To plan around what customers want while reducing their inconvenience, banks will likely need to organize their channels, products and services around customer segments defined by need, not just demographics.
• Map and measure the customer journey. Using voice of the customer data, banks should map the customer journey and identify what good performance looks like at each step.
• Slice and dice it. Segmenting properly and designing products and processes to fit can lead to happier customers and better service.
• Be the customer’s advocate. Customer experience leaders should be empowered to work across product and channel lines to advocate for customers’ interests.
• Share information across channels. Banks often miss obvious cross-sell opportunities because they don’t share the information across channels.
• Create feedback loops. Many banks produce a fair amount of marketing material without knowing what works and what doesn’t. Creating feedback loops makes up a fundamental part of knowing how to tell the difference.
• Emphasize digital. From the way customers interact with a branch to the internal systems bank employees use, digital tools are now essential. Today’s customers have shorter attention spans and turn to a variety of sources for their financial needs. Omnichannel only works if everyone can get the right information when they need it—including staff.

Koic agrees: “Banks should see this kind of customer centricity as a profit center—and not a budget buster—because they can meet their customers where they are.”

And when routine transactions go digital, “it frees up tellers and bank officers to interact with customers for more profitable, higher-level transactions, such as loans,” Koic notes. “When the customer is less ‘stressed,’ they’re more open to making a commitment, such as putting their name on a dotted line at the local bank.”

And in a successful omnichannel world, that’s truly a sign of the times.

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Dawn Wotapka is a communicator who lives for a great story, no matter how it is told. An Army brat who graduated from NC State University and NYU, Dawn covered the housing crash and public companies for The Wall Street Journal. She enjoys running, overnight oats and business books.