In Part-1 of this blog post, we’d described multichannel banking. In Part-2, we’d introduced the concept of omnichannel retailing. In this concluding part, we’ll explain what omnichannel behavior could mean in the context of retail banking and suggest ways by which banks could jump on to the omnichannel bandwagon even if they didn’t / couldn’t fix shortcomings in their current multichannel offerings.
Research is showing increasing customer tendency to hop channels even to complete a single transaction. This forms the bedrock of omnichannel banking and can be attributed to the perception by customers that different channels perform different steps of the same transaction with differing levels of convenience, security, speed and cost. Let me cite two examples from my personal experience:
- Account Opening: I prefer to complete a form online. But, when it comes to submitting supporting KYC documents, I find it much easier to snail-mail them to the bank instead of scanning several pages and uploading them electronically.
- Bill Payment: While I don’t mind online bill payment, I can’t stand e-statements for reasons explained here and here, and insist on receiving printed bills by post.
The recent decision by INGDirect USA to introduce checkbooks shows that omnichannel behavior is not my personal eccentricity: Although customers opened accounts in an Internet-only branchless bank, they still wanted to write paper checks to make everyday payments instead of jumping several hoops to put through electronic payments.
To make the leap to omnichannel banking, we recommend that banks identify the channel preferences of the majority of their customers for each step of every key transaction. They should then direct their investments to ensure that each channel delivers the best customer experience for that step even if it doesn’t do so well on the other steps. This approach will guarantee the best customer experience for the majority of customers even if ticks off those outliers among customers who want to do everything on an iPad or at a branch.
To see how this approach would play itself out, let’s take the example of a bank which currently publishes product information on its Internet Banking and Mobile Banking channels but does not support end-to-end account opening on those remote channels. Such a bank has the following choices for account opening:
- Option 1 (Multichannel support): Invest in technology and resources to establish realtime integration between its internal account opening system and external third-party identity and address verification services. Eliminate friction from the current web/mobile channels. Deliver 100% account opening functionality on online / mobile channels.
- Option 2 (Omnichannel support): As at present, let the prospective customer research and make a shortlist of products on Internet / Mobile Banking but visit the branch to complete the account opening process. Implement clickstream analysis and other technologies on its remote channels to ensure that, when the prospective customer walks into the branch to complete the process, the branch staff is able to progress the offline transaction from where she left the online one, instead of annoying her by having her start the process from Step One all over again.
Multichannel sounds sexy but it’s not practical in today’s market conditions. Besides, it’s not even necessary for a majority of customers who demand online research capabilities from their banks but have expressed a strong preference to open accounts in the branch. According to CEB Financial Services Customer Experience Survey cited in this TowerGroup report, the so-called “Research Online Buy Offline” (ROBO) shopping segment constitutes 62% of customers in Mexico and 61% in the USA.
Against this backdrop, omnichannel is the way to go.
As testimony, take Dupaco Credit Union in the USA and Development Bank of Singapore. According to Finextra, both these banks are using state-of-the-art mobile and social media technologies to drive more customers to their, ahem, branches!
Kudos to Dupaco and DBS for taking this concrete step towards omnichannel banking!