By : Colin Gordon
October 20, 2016 12:00 PM
We hear a lot about the term omnichannel in the financial industry these days. It is about starting a transaction on one channel and interacting with one or more other channels to complete the transaction. Given how today’s consumers are used to using so many different devices for their banking, there's no denying how significant this concept is going to be. For customers and financial institutions alike, as retail banking continues to evolve in the coming years it’s likely the term omnichannel will be around for some time.
Amidst all the talk and predictions, it's important for banks to retain a clear idea of what a genuinely omnichannel approach needs to be like. There needs to be a consistent customer experience across all channels, such as a tried-and-tested customer touchpoint like ATM being able to dispense cash after the transaction is pre-staged on a mobile application initially.
The importance of omnichannel
In competitive, fast-moving industries like retail banking, where numerous brands are vying for business and striving for customer loyalty, one of the things consumers will always appreciate is choice. Today's customers want to be able to manage their financial affairs in their own way, across various channels offering a consistent, personalized experience.
The 2016 China Retail Banking Satisfaction Study, from global market research firm J.D. Power, showed that the more channels customers use, the happier they are with their bank. The report revealed that the most satisfied customers use approximately four channels, with those that use two channels likely to have a much lower level of satisfaction.
Geoff Broderick, vice president and general manager at J.D. Power, said: "The omnichannel approach acknowledges the fact that today's retail banking customers require several different types of banking interactions on a very situation-dependent basis. The key for banks is striking the right balance between offering a number of flexible options that address evolving customer needs and prioritizing channels that deliver the right mix of profitability and an optimized customer experience."
Gallup came to similar conclusions, specifically about US millennials (born between 1980 and 1996), in a study published in June this year. The firm said the greatest challenge for businesses looking to engage this demographic is delivering the convenience of multiple channels "while maintaining a consistently positive experience across every channel". More than half (55 percent) of millennials who were fully satisfied with all the banking channels they used were fully engaged with their provider - meaning they felt emotionally and psychologically attached to the brand.
The role of the ATM
It's easy to overlook the importance of the ATM in our modern era of mobile banking and online accessibility, but those FIs that make this mistake run the risk of losing out on potential valuable engagement with their customers.
Mobile and online banking have expanded considerably in recent years and are still growing, but customers continue to value the convenience and familiarity of the ATM. Figures from LINK, the UK's cash machine network, showed that August 29th 2016 was the busiest ever August bank holiday Monday for ATM withdrawals in the country, with £280 million taken out of ATMs. According to the Federal Reserve, using an ATM is still the second most common way for US consumers to interact with their bank, behind going into a branch and is actually ahead of online and mobile banking.
Investing in the ATM network as part of a coherent omnichannel strategy can deliver many benefits, such as maximizing self-service capability for the financial institution. Self-service deposit ATMs, for example, let consumers’ complete tasks like paying bills, transferring funds and printing out mini-statements. Interactive machines offer the choice of self-service or connecting with a remote teller via a video screen, freeing up branch tellers to focus on sales and other revenue-generating activities.
Your ATM network can also be one of your most powerful tools when it comes to showcasing your brand and delivering a coherent, powerful marketing message across channels. So as the omnichannel banking revolution continues, FIs that invest in their ATM network as well as newer, more rapidly evolving channels will be in a strong position to earn customer loyalty, by delivering an experience that combines choice and flexibility with consistency.