Digital transformation is driving and reinforcing the trend of customer-centricity, making customer experience management a mandatory requirement. Previously, financial services and transactions were tied to the physical presence of banks and their branches. Today, the entire banking sector, and the financial industry as a whole, is shifting toward the paradigm where services must be available wherever the customer is. This demands tools and technologies that can reach customers and deliver services seamlessly.
What is an Omnichannel Experience in Banking?
In the past, branches were the face of banks and the only place where banks could interact and communicate with customers. However, with the growing familiarity and popularity of digital communication channels, customers now have less need to visit physical branches.
A survey by Capgemini reveals that over 76% of customers expect seamless experiences across all digital and traditional channels. As a result, banks have introduced a range of tools such as call centers, digital apps, social media, and chat platforms to expand their communication channels with customers. However, this has created a challenge: managing the simultaneous flow of information between banks and customers.
The question arises: how can banks manage these communication flows while delivering the best possible customer experience? This is where the need for omnichannel becomes essential and mandatory in the journey of digital transformation for the banking and financial sectors to enhance customer experience.
In short, omnichannel refers to a method that enables banks to create a unified customer experience across multiple communication channels, built on a comprehensive data-driven management platform.
As noted, having multiple communication channels is essential for banks to reach and meet the diverse needs of their customers. However, if these channels operate in isolation and fail to provide a comprehensive view of customers and their journeys, banks are merely operating in a multi-channel model, not an omnichannel one.
| Figure 1: Distinguishing between Multi-channel and Multi-channel in the Banking industry. Source: FPT Digital
Omnichannel is truly established when banks design their communication channels (transactions, ATMs, mobile banking, internet banking, social media, etc.) as an integrated system to provide a consistent experience for customers. Behind all these communication channels lies a unified customer experience management system built on a vast amount of collected data.
For example, an omnichannel bank could function as follows: A customer wants to open a credit card and begins researching through the bank’s website or mobile banking app. Due to some unclear information, the customer decides to call the contact center. Immediately, the call center agent receiving the call has access to the information about the credit card product the customer is interested in and can proactively discuss and advise without the customer having to repeat their inquiry.
After receiving advice, the customer can proceed with an automated transaction process to complete the remaining procedures (document verification, information submission, etc.) and receive the credit card promptly. All interactions between the bank and the customer are recorded as part of a seamless and uninterrupted journey.
The value of omnichannel experiences and how to get started
A recent study by Forrester revealed that the Covid-19 pandemic has accelerated the global digital transformation. Disruptions in face-to-face interactions pushed digital channels to become the primary communication bridge between banks and customers. In the U.S., 76% of people frequently interact with banks via digital channels, and 61% conduct transactions through smartphones. Clearly, operating digital channels effectively has become a critical requirement for pioneering banks.
Some of the immediate benefits for banks adopting an effective omnichannel model include:
- Customer satisfaction and increased customer value: By focusing on providing the best value and experience for customers, banks can nurture relationships and generate new revenue streams. According to Aberdeen Group, banks with effective omnichannel models can increase customer lifetime value by more than 11% compared to banks without such models. Additionally, omnichannel banks retain customers 91% better than traditional multi-channel banks.
- Cost savings: Instead of fragmenting resources across multiple isolated channels, omnichannel banks can automate many simple processes. The integration of systems allows customers to independently access basic information while still being able to contact support teams (customer service, call center agents) when necessary.
- Enhanced security and risk mitigation: Implementing an omnichannel model means banks establish multiple touchpoints with customers (phone numbers, emails, mobile apps, social media, etc.). This provides banks with more ways to authenticate customers and issue alerts for suspicious transactions or logins from unknown sources. Ensuring customer safety and security simultaneously protects the banking system and minimizes transaction-related risks.
To implement an effective omnichannel model, banks can consider the following three approaches:
- Building tools and collecting data: To establish an omnichannel model, the first step banks need to take is to create multiple communication channels that align with customer preferences. This includes not only digital applications like internet banking and mobile banking but also improving and integrating technology into traditional models, such as branches. For example, facial recognition technology can be used to instantly identify customer information when they visit a branch, or voice tone analysis can determine a customer’s mood during interactions.
- Managing and converging platforms: From various structured and unstructured data sources, banks must design and integrate these information streams to form a comprehensive view of their customers. Based on this, the customer journey can be tailored with specific touchpoints across different communication channels to optimize the customer experience.
- Analyzing and acting: With the support of Big Data technology, banks can quickly and accurately derive customer insights. These insights allow banks to deliver products and services that are highly relevant and convenient for customers. As a result, the relationship between banks and customers evolves beyond mere transactions, becoming a precise and effective partnership that addresses customers’ needs and desires comprehensively.
On their digital transformation journey, implementing an omnichannel model is just one of the tasks banks need to undertake. However, it is also a model that can deliver quick and easily verifiable results. Moreover, the data obtained through the omnichannel model allows banks to analyze and develop more extensive and transformative steps in their digital transformation. For this reason, omnichannel remains one of the key trends that Vietnamese banks are focusing on in 2022 and the years to come.
References
(1) IBM. Omnichannel banking: From transaction processing to optimized customer experience
(2) Capgemini. 2021 World Retail Banking Report
(3) Forrester. 2021 The State Of Digital Banking
(4) Aberdeen. Distinct Value in the Subtle Differences
