With digitization and technological advancements, there are multiple options to perform any task. Want to eat a donut? Either go and buy or just make an online order through the On-demand food app and get it delivered to your doorstep. This has transformed the customer’s buying experience.

Similarly, these technological advancements have essentially transformed the way we make payments. There are now multiple options available. This availability of multiple payment options has also disrupted the banking space and has caused a massive transformation in the way consumers do banking.

Nowadays, basic transactions in banks are speedily migrating from physical to digital channels. Even big names like Apple, Google, Amazon, and Facebook are showing greater interest in the banking sector.

With this, consumers now use different channels for performing their banking operations such as internet banking, mobile banking, and ATMs. Due to this, omnichannel banking has become the need of the hour for every bank.

omnichannel-banking

In this blog, we will discuss what omnichannel banking is, why it is needed, its benefits, and how banks can become truly omnichannel.

What is omnichannel banking?

Omnichannel banking refers to the integration of various channels, such as online, mobile, in-person, and digital assistants to provide customers with a seamless banking experience. It allows customers to access their accounts and conduct transactions through multiple channels.

In simple words, omnichannel banking means that the users can avail of all the banking operations from a website, mobile app, bank’s branch, call center, or any other available channel.

For example, JPMorgan Chase offers its customers a wide range of banking services through various channels, including online banking, mobile banking, and in-person banking at physical branches. They also offer a feature where customers can make appointments with bankers online or via their mobile app.

The need for omnichannel banking

Customer expectations

Customers today expect to have the ability to interact with their bank across multiple channels, such as online, mobile, in-branch, and over the phone. They also want to be able to switch between channels without interruption, and expect a consistent and unified experience.

According to a World Retail Banking Report, 2021 by Capgemini, it was discovered that nearly 80% of consumers expect an omnichannel banking experience. This figure implies that customers are now in the front seat and driving banks to improve their systems by adding more options for performing banking activities. This has resulted in an increased need for omnichannel banking and the need for banks to act on it.

Increased competition

The banking sector is facing profound competition from non-banking players like fintech companies and other financial institutions who offer multiple as well as user-friendly banking services through their digital fintech solutions. For example, Chime is a mobile-first banking platform that allows customers to open bank accounts, make deposits, and conduct transactions through a mobile app or online portal.

Additionally, it offers a debit card and the ability to make payments and transfer money through the app. They also have physical retail locations where customers can make deposits and withdrawals. In short, Chime is providing everything and more than what banks give.

Cost factors

According to the latest study by Statcounter, from Dec 2021 to Dec 2022, the market share for mobile users was 60.29%, 37.71% for desktop users, and 2% for tablet users. These stats show that people prefer platforms that do not need to be physically present for performing a task. Also, it suggests that everything is omnichannel.

In banking too, with multiple options, today people consider visiting a bank as a last resort. They generally perform their banking functions through mobile (app or online) or desktop (online) only. This reduces the cost of operations and maintenance for banks. They can also cut down on their human resources and paper costs. Hence, omnichannel banking could be the right choice for banks.

Personalization needs

Personalization is one of the essential needs of omnichannel banking. According to a 2021 study by Capco, it was found that nearly 72% of customers consider personalization as an important factor for banking and financial services. As consumers' expectations for personalization continue to increase, banks are under pressure to provide an omnichannel experience that allows customers to interact with the bank in real-time synchronization across all channels.

For example, the users can begin the onboarding process on one channel and can finish it on another without providing the same data all over again.

Read More: Future of customer onboarding in banks

Major benefits of omnichannel banking

Personalized experience

The traditional "one-size-fits-all" approach is no longer effective for banking customers. A hybrid approach, which combines both digital and in-person interactions, allows for greater flexibility and customization to meet individual customer needs

Quicker problem-solving

Omnichannel banking allows customers to access their banking services through multiple channels such as online, mobile, in-branch, or through a call center. This approach allows customers to switch between channels seamlessly and helps them to resolve problems quickly.

For example, if a customer is having trouble using the online banking platform, they can switch to the mobile app or call the call center for assistance. The ability to switch channels helps to ensure that customers can always find a way to access the help they need and resolve issues in a timely manner.

Minimized costs

Omnichannel banking can reduce costs for banks by minimizing the need for physical branches through digital channels, increasing efficiency by allowing customers to switch channels seamlessly and handle more interactions with the same resources. Moreover, by integrating chatbots into their system, the banks can cut down on support and servicing costs.

Increased customer experience and retention

With a unified view of customer information across all channels, banks can provide more personalized service and respond more quickly to customer needs. This increases customer convenience and experience, which leads to more and more satisfied customers.

And, by providing a seamless and convenient banking experience, they can increase customer loyalty and trust which will ultimately make the customer keep using their services, thereby leading to increased customer retention.

How can banks take that big leap to become a true omnichannel platform?

If banks want to jump to become a true omnichannel banking platform, then they must develop the below three capabilities:

  • Advanced analytics
  • Marketing personalization across various channels
  • Motivated sales force
  • Now let’s have a look at them one by one.

Advanced analytics for more useful targeting

Banks can leverage advanced analytics by applying them to the data generated by using digital banking solutions and customer transactions.

This can drastically increase the effectiveness of omnichannel sales. With the help of analytics, banks can get crucial insights into customer behaviors that can help them to tailor and target their offerings more precisely. Analytics can increase sales productivity by as high as 40 percent.

Banks can also identify high-potential and high-value customers that cause a disproportionate share of revenue by using data-mining techniques on customers’ online behavior and spending patterns.

Customer behavior analysis not only helps banks to optimize their lead generation but also enables them to focus on the right customers at the right time.

Recent advancements in analytics, such as nonlinear machine learning algorithms can rapidly improve customer targeting and models’ prediction power after combining with the granular data.

Many banks were able to triple their commercial campaign conversion rates after they upgraded their models and integrated high-frequency variables and triggers derived from real-time behaviors into the traditional static customer profiles.

Banks must also understand that advanced analytics deliver their best only if their data management capabilities are at a high level. They must be able to access the possible highest number of resources.

After that, they must analyze the data effectively. Many European banks have also started leveraging internet data as a rich source of insights.

Marketing personalization across various channels

Banks can leverage digital marketing techniques for a significant uplift. They can measure time spent on particular subjects, track customer clicks across web pages, and use this data in their analytics engines. They can do personalized messaging based on the data obtained.

The customers’ behavior online clearly indicates their interest in a particular service or product. Banks that possess top-notch digital capabilities can cash on these signals to make the quick and right offer.

To support and execute these strategies properly, banks must coordinate across the channels. Lack of coordination might result in losing customers.

Direct channels in sales such as text messages, mobile banking notifications, emails, etc. don’t often evoke an immediate response from the customers. They always require human intervention that can finalize the deal.

Banks can maximize channel efficiency by achieving balanced collaboration between humans and machines. Banks can achieve this balance by analyzing the transaction data which includes where and when the purchases were made.

The motivated and equipped sales team

Banks must pay equal attention to the human side of the omnichannel model as it is as prominent as the digital side. Banks must use sales tools to respond to their customer's needs. However, banks must also personalize their digital touchpoints.

They must ensure that the customer needs and digital behaviors triggered by analytics are quickly conveyed to the relationship manager. This enables banks to apply personalized insights.

Banks can also make human interventions successful by providing the appropriate sales network capabilities. Many banks are investing in digital training platforms which consist of highly specific learning objects in thousands. They aim to offer support that is continuous, engaging and focused.

Another important aspect of motivating sales teams is the complete alignment of incentives with the customer’s needs. This reduces the risks involved with mis-selling. Additionally, performance management should also be continuous and ongoing.

Banks must come up with KPIs that are aligned with the customer's needs. Moreover, they must be simple, measurable, actionable, and should be appropriately rewarded.

Want to provide an omnichannel banking experience to your customers?

DigiPay.Guru can help you provide your customer with an exceptional omnichannel banking experience with its secure and advanced digital payment system. Our tailor-made solutions allow your customers to easily conduct banking activities across various channels such as online banking, mobile banking, and ATM services.

If you are looking to enhance your banking experience by adopting an omnichannel banking approach, DigiPay.Guru can help! Connect with our experts and let us understand your needs and provide you with the best omnichannel solutions.

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Nikunj Gundaniya

Product manager of DigiPay.Guru, one of the leading digital wallet solution. He is a visionary leader whose flamboyant management style has given profitable results for the company. He believes in the mantra of giving 100% to his work.

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