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Omnichannel banking, a myth or reality

Omnichannel as a concept, is omni-present: it’s something that the industry has been discussing for years, but, particularly in banking, a true omnichannel experience is still a rare, almost mythical phenomenon.

For years, financial institutions (FIs) have been working hard to ensure that they offer their customers the multiple touchpoints, such as mobile and internet banking, that today’s customers have come to expect. However, in their race to meet these customer expectations, many of these channels have been built in silos, with little integration between them, leading to increasingly fragmented customer experiences. Its more than just providing customers with the same set of services across multiple channels - true omnichannel banking should provide customers with a seamless and frictionless cross-channel journey – the power of which really come into play when the customer has a problem.

What does omnichannel banking look like?

Let’s take an example of a customer losing their card on holiday, and contacting their bank through the customer service centre or online chat to report it. A seamless omni-channel experience would see the customer having all of their cards blocked, receive a new virtual card directly into their wallet (Apple Pay and the likes) in just a matter of minutes, and have a brand-new physical card waiting for them when they arrive home.

Another might be a bank being able to offer a customer instant credit at the point of purchase, for example, if they do not have the funds available to complete a purchase – the FI notices this during the 3D Secure authentication at ACS and rather than simply declining the transaction, it performs an instant assessment of the customer’s creditworthiness, offering them an instant loan that can be confirmed by the customer though their mobile banking app, internet banking or by sending a one-time password via SMS.

These kinds of cross-channel experiences would obviously provide huge benefits to the consumer, as well as the FI - increasing customer loyalty and, in the latter example, offering a new revenue stream for the financial institution.

The current reality

However, for many financial institutions, offering these types of experiences is truly a difficult task that cannot be solved by simply buying a box called “omnichannel”, plugging it in and switching it on. For the majority of FIs to be able to implement omnichannel experiences like these, and others that will provide an exceptional cross-channel customer experience, they need to organise the interaction of a dozen heterogeneous systems created by different parties on different platforms (for example, switch, card management system, CRM, ACS, etc.).  In these conditions, the implementation of an omnichannel service turns into a very complicated project from both a technical and organisational point of view.

It is especially difficult, and often, almost impossible, to solve this problem for FIs whose current information systems are built around core systems in excess of twenty years old – which, unfortunately, means the majority of FIs in the market.

Creating a true omni-channel banking experience

Customers expect frictionless, seamless, instant and personalised experiences, therefore, it is essential that FIs get omnichannel right. However, to be able to offer these omnichannel experiences, an FI needs to ensure their technology infrastructure is built on solutions that are capable of acting in a modern, dynamic, collaborative, always-online environment that gives you a comprehensive single customer view across all channels and the customer’s entire banking journey. It needs a platform that has been architected in a way that seamlessly integrates with other systems. And it needs a vendor that has experience of delivering these seamless omnichannel experiences. Can this be achieved on legacy platforms? Potentially, but it will be a truly arduous, complicated, time-consuming and costly task.

 

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Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 02 December, 2020, 13:061 like 1 like

I'm sorry but I disagree with your description of Omnichannel Banking, both at the generic level of definition and specific level of use cases.

As I highlighted in From Multichannel To Omnichannel And Beyond, Omnichannel does NOT mean supporting every business process on every channel BUT splitting a single business process across multiple channels in such a way that each channel leverages its strength and the customer finds each hop natural. Ergo, Omnichannel Banking is not even expected to fulfill your expectation of being "more than just providing customers with the same set of services across multiple channels." What you're expecting is the definition of Multichannel Banking, not Omnichannel Banking.

Coming to your first use case of "customer losing their card on holiday". Note that you've said "card" in singular. Why the heck should the bank block all the cards (plural) in response? IMO, that would be a disaster, not a great example of what you call "seamless omni-channel experience" at all.

Coming to the next use case of letting a customer make a purchase if "they do not have the funds available to complete a purchase", that's exactly what Credit Card has been doing for 50+ years. What role does Omnichannel Banking play in that?

There are some banks who deliver a good Omnichannel Banking experience on top of Mainframe CBS and some other banks who deliver a lousy Omnichannel Banking experience - or no Omnichannel Banking experience at all - on top of Java CBS. Legacy or Open Systems Core Banking System is just the cards a bank is dealt with. How it plays them to deliver Omnichannel Banking - or virtually anything else - is a wholly different topic. Core Transformation could be a needless diversion for many banks, as McKinsey warns in its article where it gives the example of a bank that decided to rewrite its core because it wanted to use the latest tech and had to shelve its project after €100M investment because the new tech was not stable and had fatal flaws.