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The Financial Market Omnichannel Imperative

by Leena Iyar on October 25, 2016

 By: Daniel W. Rasmus

Principal Analyst, Serious Insights

Industry Analysis:

Wide access to smart mobile devices created a significant shift in the ability for financial services organizations to reinvent their customer interactions. Telephone, and face-to-face, while reduced by the adoption of web-based processes, potentially become an even smaller portion of future interactions among those who use smart devices. The adoption of smart devices enables omnichannel communications between institutions and customers, driven not by transactional constraints, but by customer choice.

Along with the growth of access to smart mobile devices, the following three factors drive the need for financial institutions to rapidly adopt omnichannel communications.

  1. Social media sets an expectation for immediate response. Social media does not queue people up to call centers, nor place people on hold. Social media responds immediately and the quality of the response becomes instantly subject to feedback. Financial institutions will be expected provide rapid responses and immediate feedback in the form of likes, dislikes, thumbs up, frowns and other forms of quick feedback.
  2. Channel choice can come in two forms: a choice of best channel for a process, and a choice for best channel based on customer preference. The wide variety of collaboration apps has turned the former into a non-starter. People have clearly developed preferences for how they want to communicate and those choices are bound to the way they work and communicate, not to a vendor architecture or process. The companies that succeed at omnichannel won’t do so by force-fitting channels, but by allowing customers to self-select the channel that best serves them. Financial institutions will benefit from adaptability by creating engagement that rein- forces openness rather than annoys through rigidity.
  3. Unbanking reflects the ultimate expression of disconnection with financial institutions, and disruption of financial services models. The Packaged Facts’ Unbanked and Underbanked Consumers in the U.S., 4th Edition report suggests that many Millennials see no need for traditional banking products at traditional institutions. The report, however, suggests that Millennials continue to use banks for services beyond checking or savings accounts. Positive experiences outside of banking put those additional services at risk. Financial institutions who don’t meet expectations run could see Millennials rapidly abandoning other services as non-traditional alter- natives emerge. Adopting an omnichannel model based on customer knowledge and efficiency could stave off emerging technologies if switching friction outweighs perceived benefits for the current approach. Reducing friction and increasing efficiency should be a top priority for existing institutions.

Financial institutions should also look at the shift to omnichannel as an opportunity to reinvent costly processes and practices. Ominchannel implementations should also result in:

  • Enhanced customer insight through mining of transcripts.
  • More engaging customer experiences that should drive quality perceptions and increases in loyalty.
  • Reduced end-to-end service costs.
  • Improved transparency and regulatory compliance.

Financial institutions that want to remain competitive across all markets have no choice but to adopt omnichannel collaborative models that empower both their employees, and their customers.