What is the Financial Industry Omnichannel?

Omnichannel banking opens up the possibilities.

What is the Omnichannel?

Of all the buzzwords circling the financial industry, “omnichannel” is perhaps the most mysterious and intimidating; there’s a suggestion that very large scale changes may have to be made. Thoughts of heavy lifting spring to mind, of your institution’s entire brand being tossed into the trash and rebuilt from scratch. This could well be what is required, but before we worry about that, we need to answer the question: What is the Omnichannel?

Omnichannel banking occurs both on- and offline.

All roads lead to the branch.

The most common description of what the ominchannel is, is “a seamless experience across channels”. Seamless? Where exactly are these seams in the first place? Let’s find out.

The Seams Between Retail Banking Channels

The peculiarities of each channel are what differentiate them and caused them to be classified as one channel or another. This distribution channel taxonomy isn’t organized in a permanent hierarchy like the Six Kingdoms of Life, with some channels always “above” others in importance; its command structure can change at any time, and indeed does, depending on the situation and the customer demographic. Each channel functions as a two-way delivery system, carrying information to consumers, and bringing consumers (and their investments) into a financial institution’s books. Among the best-known channels are branches, mobile apps, call centers, ITM audiovisual channels, social media, email and Internet. It helps to think of these different channels not as individual racecars competing for pole position, but as a single entity composed of organs performing different functions.

Sometimes the brain is most important, sometimes the heart or lungs. Horses for courses and all that.

An omnivore eating a mobile device connected to the omnichannel.

Not all omnivores are pigs.

The omnichannel straddles the online and offline worlds, but it’s the connections between these that really define what it is. Stores like Target and Walgreens have already achieved omnichannel mastery over connections between online ordering and store pick-up (Walgreens’ Photo service enables customers to upload pictures, invitations, etc, online, and pick up the printed photographs later). Target has an app that shows customers (or “guests”, as they are termed) how much of a certain good a specific store has in stock, and they can order that good and pick it up at an in-store desk. It even shows where in the store this good can be found if it is not ordered via the app.

All the way back in 2006, large chainstores like Sears and JC Penney discovered customers that purchased in two or more channels outspent single channel consumers by up to 400%. These are significant findings.

Banks and credit unions are using the omnichannel approach.

There’s more than one way to access your assets.

Bringing It All Together

In the financial industry context, it helps to properly define the different channels, and then characterize the relationships between them. Determine where “horizontal” movement between channels takes place, and base an omnichannel strategy partly on this.

For instance, say a bank or credit union creates an ad campaign targeted to specific age segments in their community. Each segment receives a different message, via radio, TV, billboards, print or internet display ads: Millennials are targeted by ads describing how easy and convenient it is to open a new account and use apps to manage their affairs; middle-aged people receive targeted ads about investment portfolio management; over-65’s are messaged about variations on standard CD interest rates and terms. People responding to these campaigns may find their way to the physical branch or institution website by any number of ways.

Designing banking apps to be similar in appearance.

Just design everything the same. It’s not rocket science. Or is it?

A young person might see a display ad, click through directly to the F.I’s website, and in the process have their machine cookied for tracking purposes. This will ensure they’re served the ad (or variants of it) again and again as they surf the Web. Depending on the subject matter of each ad, they’ll land on the relevant page on the institution’s website. The young person in question might not convert right away, so these constant reminders will keep the F.I’s value proposition at the top of his or her mind. This doesn’t mean they’ll use the subsequent ads to revisit the website; they might Google it directly, or type the URL of the site into the address bar. If they are touched by an offline ad they may proceed directly to the branch. If they’re really savvy, they could see information in an ad about where to download an app and go right ahead and just do it. The possibilities are endless. People move from one on- or offline portal to another, and they expect all of them to work and to possess similar qualities.

Which is why none should be valued more highly than any others.

Many channels become one with banking apps and in-branch consultancy.

Relationship Status: It’s not that complicated.

People often think the omnichannel refers exclusively to online activity but, as is the case with Walgreens and Target, much of the power lies in the connection to offline touchpoints. And even within the online piece,  its finer points and potentials have yet to be fulfilled by many companies.

For instance, many people don’t know the difference between a mobile app and a mobile website. Banking apps are downloadable applications that don’t require Web browsers to display but are connected to the Internet. They’re designed to function across various operating systems, such as Android, Apple and Blackberry. Apps enable consumers to perform multiple tasks such as checking balances, paying bills, transferring funds, and checking interest and exchange rates. Apps are much more popular than mobile websites, because they’re designed to be lean. That is, they’re streamlined towards specific functions and interactive features rather than brand and presence. You could say the website represents the physical branch with its signage and messaging and architecture, and the app is the technology within the branch that consumers use to access and manipulate their investments.

Often, an app looks very different to the mobile site, and being logged into one doesn’t necessarily mean you’re automatically logged into the other. With omnichannel banking, these would be very similar in appearance, even when function is radically different, and ideally there’d be a single login for everything. If you’ve ever been slightly freaked out by the sight of your own Gravatar image waiting for you at the comments section of an article you’re reading, you’ll understand how all these channels will communicate with each other and how consumers will enjoy “sideways” access between channels via portal links.

Banks and credit unions are transforming into service and retail hubs.

It’s slick, it’s groovy, it’s the Omnichannel.

On Being Channel Agnostic

“Channel Agnosticism” means developing a branding and communications strategy that favors no particular channel. Instead, channel agnostic companies have a mission to put customer needs before all else. They recognize and honor the fact that commerce comes to them from many directions; potential and existing customers do research, purchase and show loyalty by visiting and re-visiting a brand by any means they choose. Just a few years ago, the question of a company having a website was up in the air. Having a blog even more so. Now, it’s common for banks and credit unions to message customers and others who follow them on social media about new offers and services, and for that financial institution to consider ROI on tweets and Facebook posts. A decade ago this would have been ludicrous.

This “seamless experience across channels” is something that has clearly been with us for some time, being gradually acclimated to by consumers. Financial institutions are only just beginning to grasp the possibilities that exist in the omnichannel approach. The most important aspect of it is understanding that “multi-channel” must now become “omnichannel”. From the many, the One.

Oh, and once you’re familiar with the omnichannel, you’ll probably need to jump onto the next big thing: Commerce Relevancy.

After the omnichannel comes Commerce Relevancy

Just when we thought it was safe to go back to the omnichannel…