Omnichannel Banking

Omnichannel Banking

Banks clearly understand the necessity of offering mobile banking to meet the needs of an increasingly digital-first customer base. In many respects, in fact, banks are moving more rapidly into the digital era than customers. According to a recent American Banker survey, 93 percent of banks in the United States are expected to offer mobile banking by the end of this year. Yet only 33 percent of smartphone owners have used mobile banking services in the previous 12 months, according to a Federal Reserve study.

Banks are betting on this number increasing significantly in the near future, however — a fact emphasized by Jim Smith, executive vice president and head of virtual channels at Wells Fargo & Co., who spoke at the recent Digital Banking Summit in Austin, Texas. Smith told attendees that mobile is the fastest-growing channel the bank has ever had, with 85 percent of customers having access to mobile phones and close to 60 percent being mobile-banking enabled. The twist in this trend, though, is that 40 percent of the bank’s millennial customers also visit a branch location in any given month, which reinforces the fact that financial services must be accessible and easy to use not just in digital channels (mobile, tablet and online), but also in full-service (branch) and self-service (ATM) channels.

“We are at the start of a big journey,” said Smith. “Mobile is essential to consumers’ lives and transforming how we connect through all channels. The model has evolved from channel-centric to experience-centric, with customers now expecting omnichannel banking.”

In their workshop on gaining and retaining relevance with today’s customers, Glenn Hudock, managing director, and Stephen Drees, managing principal, industry strategy group, Acxiom Corp., emphasized that millennials are more likely to switch banks than older generations; in addition, the banking relationship is becoming viewed as transactional (or commoditized). This makes it essential that banks master the ability to understand the consumer, manage information, analyze data, implement decisions and manage the consumer experience. They went on to offer four guiding questions for strategy and user experience:

• KNOW — What do we know about our customers? The solution: Leverage data and analytics more effectively.
• CONNECT — Where and when are we connecting with our customers? The solution: Offer omnichannel orchestration and branded experiences.
• ENGAGE — Is this a two-way conversation? Is it relevant? The solution: Focus on two-way conversations, relevance and customization.
• LEARN — What can we learn from our customers and interactions? The solution: Obtain feedback and analyze comments.

Hudock and Drees pointed out that to be successful, banks must know when, where and how to talk with customers. In other words, banks need to know when a customer wants to talk about a specific product and through which channel. A branch visit or online banking may be the preferred channel to discuss home mortgages, for example.

Omnichannel banking began a few years ago as multichannel banking: a siloed approach that provided new, innovative services, such as mobile and online banking, to complement full-service and self-service banking. The problem was that each channel was usually tied into its own legacy platform and managed through a complicated IT system. More significant, what was offered on one channel, such as online banking, was not necessarily available on another channel, such mobile banking.

Today, true omnichannel banking gives customers access to the same array of services regardless of channel — Internet, mobile, tablet, full-service or self-service. As Chris Peper, vice president, mobile channel manager, U.S. Bank, summed it up, “Customers must have ubiquitous access to information — a true omnichannel experience.”

Michael Scheibach is executive editor of BankNews.