Home Banking Bricks and Clicks: Digital banking will breathe new life into branches

Bricks and Clicks: Digital banking will breathe new life into branches

by internationalbanker

Alex Bray - Misys 2)

This year has been proclaimed the year of ‘omni-channel’ by many banking pundits. Omni-channel fever is gripping the retail industry as brands seek to align bricks and clicks. The concept of omni-channel is becoming increasing prevalent in the banking world as well. Alex Bray, Retail Channels Director at leading banking software firm, Misys, explores what this really means for banking. Follow Alex and Misys on Twitter for more insights on retail banking: @StGilesResident and @MisysFS.

Most banks have conquered multi-channel. By this, I mean that most banks can offer key services through a range of channels – branch, online, mobile, ATM, post or phone. With the multi-channel approach, each channel is in effect an isolated island with little dependency or interaction with the other ‘channel islands’. By comparison, an omni-channel strategy is one which allows a customer to move between different channels in a manner which is efficient for both them and the banks – and which is informed by customer data.

While multi-channel represented a step forward in customer service, the model has a number of shortcomings. Certainly, it provides customers with a greater degree of convenience when undertaking transactions. However, if those interactions cannot be matured in one engagement – e.g. a visit to a branch – multi-channel strategies do not provide a frictionless user journey. This is because a customer cannot hop from one channel to another to continue an application or transaction.

In fact a multi-channel bank often erects artificial barriers for customers who wish to move between different channels. I know a case of a tier one bank which suffered serious problems as result of channels becoming protectionist of ‘their’ customers and sales in order to achieve their siloed targets. Branch staff feared the impact of call centre staff ‘poaching’ their customers and sales – and so they would habitually capture phone numbers incorrectly to protect their herd. This meant that customers could not be proactively contacted by the bank – leading to poorer customer service.

Similarly, in another bank, a multi-channel strategy was driving a bad customer experience when buying a new mortgage. Customers could initiate their mortgage applications online – but if they had a question and contacted the call centre, their online application was cancelled and a new application was opened by the call centre staff. The customer was then unable to access or review their application online again. This problem wasn’t driven by channels competing for sales targets, but inflexible, siloed systems.

This situation is frustrating for customers who would otherwise have chosen to self-service online. It is also inefficient for banks, which have transferred a self-service customer into a manual – higher cost – application.

These stories will resonate with a number of banks, and these are fairly common symptoms of a multi-channel strategy which is simply not working.  Omni-channel banking is the solution – but building an omni-channel business is not easy. A key factor in getting it right is to join up the technological islands. Omni-channel breaks down the silos and provides an environment where customers and staff can move between channels – so that the focus is the customer’s interaction and not the method for that interaction. It also leverages insights from integrated CRM systems.

So let’s look at some examples of how an omni-channel process would operate.

Personal Financial Management (PFM) has become a powerful tool to help customers understand their own finances. Beyond the heightened customer experience, PFM provides banks with insights on customer circumstances and is an invaluable opportunity for banks to gather data and information on customers. Data capture and data monetization are where our colleagues in the retail sector have a head start, with decades of experience managing highly successful loyalty and reward programmes. PFM is an area where banks can make up that data gap. Consumers use PFM tools to create goals. They also use it categorise payments which the bank cannot identify. This data enables banks to position adverts contextually – for example, if a customer sets a savings goal for an upcoming holiday, the bank can target that customer with holiday insurance or a credit card with no international transaction fees.

However, many banks do not make PFM services available for use in-branch by customer advisors. Imagine a customer comes into a branch for a personal financial review. The advisor could use PFM functionality – which largely renders onto tablets – for a more interactive user experience, to show the customer how their finances look. They could discuss the individual’s personal goals and the bank’s corresponding products and services.

In many countries, certain transactions can only be completed in person – necessitating a visit to the branch. To handle long queues efficiently, some banks have developed queuing systems, like Misys BankFusion Tap 2 Transact (T2T) – a tablet-based solution which enables customers to register their own transaction details. These kinds of applications reduce effort for the counter staff and by providing ticket numbers to customers, remove the need to wait in line.

In a multi-channel world, the customer has to go to the branch, type in their details and wait. However, in an omni-channel world, the customer goes to their mobile device where they register the transaction that they want to undertake. When approaching the branch, the application prompts the customer to start a countdown clock – so that when they walk into the branch the cashier is available for them with the minimum waiting time. In this way, banks can deliver counter efficiency and a better customer experience. Using similar technology, banks can proactively welcome a high value customer entering a branch. Both YES Bank in India and Standard Chartered have tried this with RFID (Radio Frequency Identification) chips. These are just two examples and there are many other ways in which these technologies could be used.

Omni-channel provides banks with an opportunity to knit their services together seamlessly. By focussing less on the channel and more on the customer interaction, banks can move beyond their silos. This is a win-win strategy for banks: to be able to provide the most convenient customer service; to reduce cost-to-serve ratio through self-service; and to generate new revenue streams through monetizing customer data. If banks can truly master omni-channel banking, their future in financial services is secure. If not, they will see new entrants from the retail and telco space nibbling away at their customer base, who are searching for a better customer experience that fits into their digital lives.


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