Omnichannel: a natural choice for the financial sector
“The online transaction system won’t accept the transaction and refers to a branch.” “The lady in the branch office throws up her hands helplessly and says that only the Call Center can unlock the account - the call center number is always busy, let me add”. Such voices from customers make it clear and obvious that it’s time to go omnichannel!
author: Karol Jerzy Mórawski
This article was originally published in Polish in BANK Financial Monthly, Issue: May 2015, pages 68-71.
What is omnichannel? This concept is often confused with a different direction regarding contact with customers, i.e. the multichannel approach. In reality, the multiplicity of communication and sales channels is only the first step to the real omnichannel approach - The aim and the end-user of each technology is a human being- reminds Wawrzyniec Hyska, Director for the Financial Sector at e-point S.A. It is the needs and expectations of people - customers - that omnichannel solutions strive to satisfy. - This concept allows a bank to achieve the goals the customers are waiting for: effortless contact with the bank, the bank’s commitment to following the path of the customer, shortening and facilitating the process of purchasing banking services, having no need to explain, again and again, your needs, consistent messages received from the bank’s website, from the call center and branch office employees - emphasizes Marcin Żuchowicz, President of the Board of e-point SA.
Flexible solutions
Over the past several years, financial institutions competed with one another to create communication channels that are as simple as possible and best suited to the user’s expectations. – Paradoxically, however, the pursuit of modernity and the “one-click” solutions sometimes mean turning away from the real expectations of the customer and not those assumed a priori by the bank analysts. It is a fallacy that all bank account holders will be satisfied with mobile banking as the “the perfect solution”. Very often it is not possible to assign customers to specific service channels because their preferences vary depending on the nature of the activities carried out. Customers choose certain channels for the current transactional support and choose completely different ones when they need advice or clarification of the parameters of more complex financial instruments. What's more, more and more often they expect to be able to seamlessly switch between different channels when executing individual purchasing or servicing activities - says Piotr Sadza, director of the Financial Institutions Sector at Deloitte. Proof of such considerable differentiation can be found in the results of a study conducted in 2012 in the United States which defines the relation between the action performed and the selection of a channel to contact the bank. In the case of checking an account balance or making a transfer, as much as 70 percent of customers pointed to the bank’s online transaction service; when taking out a loan, 53 percent of respondents preferred to go to the bank’s branch office. Capturing those individual “likes” and “dislikes” for each of the customers, making sure that the customer service proceeds in accordance with those preferences - this is the task for both the bank and the solution provider.
In our projects we combine technology with design, so that the final user experience is optimal - says Wawrzyniec Hyska from e-point SA - Whereas, by the design we understand both the UI (User Interface), UX (User Experience), but also service design, and even techniques taken from the world of start-ups (design thinking). Designing omnichannel solutions for banks is similar to creating start-ups. You have to put hypotheses, verify them, and continuously optimize the solutions. That’s why the flexible technology is so important, one that allows you to make changes on the fly.
Difficult problems, simple solutions
The omnichannel revolution requires banks to not only change their approach to the sales process: the transformation must cover the entire customer service process, and partly also the processes occurring in other areas of the enterprise’s operations. It is no secret that in many companies - also in the financial sector - the implementation of new sales channels involved the creation of separate departments dealing exclusively with the support of those channels. As a result, individual sales channels - and often, also product categories, such as loans, deposits and investment products - can live their own lives, and even compete with each other within the same institution. Who is the loser here? The customers, of course, who are inevitably pushed into a silo structure which is completely incomprehensible to them. Instead of a choice in line with the customer’s expectations and preferences, we have a “default” choice, e.g. of the mobile or electronic channel. Instead of unified support for the variety of products belonging to one customer the customer is referred to a “colleague” in the branch office or switched over to another consultant in a call center. In addition, there is a lack of coherence between channels - how many times did the customer have to explain, again and again, the whole thing from the beginning to yet another consultant? - Difficult problems require simple solutions. At e-point, we believe that the effective integration of channels and bypassing the silos problem can be performed by the implementation of shared applications, with which both the customer and the branch office employee or the call center employee will work. This approach will make all the “actors” involved in the process on the part of the bank work in the customer’s context. This approach will work especially well in more complex sales and service processes, where the customer uses multiple channels, sometimes even at the same time - underlines the president of e-point S.A., Marcin Żuchowicz.
The growing satisfaction of current customers is not the only benefit that financial institutions can derive by transitioning to the omnichannel model. In the era of Big Data, the optimum use of the data flowing through the banking systems, and skillfully combining it with individualized customer profiles, can result in incomparably higher sales results than with traditional methods - i.e.: massive banner or e-mail campaigns with individual product offers. - Mobile banking can serve as an example: through the use of predictive algorithms and geolocation it is possible to present a contextual offer at the time when the probability of taking advantage of it is the highest. Imagine, for example, a car loan offer with the calculation of the maximum premium amount and the repayment schedule, which we receive at the time of entering a car dealership - says Piotr Sadza.
Banks need to take a broader look at the customers’ information. The customer profile can be built not only on the basis of transactional data but also on the user data originating from other online systems, including social networks. This data merging provides for better offer targeting and better risk assessment - reminds Wawrzyniec Hyska of e-point S.A.
How does your bank understand the concept of omnichanneling? What are the potential benefits from the implementation of omnichanneling both for your institution and your customers? Do you plan to go omnichannel in the near future? These are the questions we asked representatives from Polish banks.
Ricardo Campos, Director of the Electronic Banking Department, Bank Millennium S.A.:
Bank Millennium switched from operating as a multichannel platform to omnichannel operations as early as in August 2014. As for the differences, in the multichannel model,customers may effect their transaction in any but a single channel, whereas in the case of the omnichannel model, they start and complete the process using more than one channel. Thus, customers can, for example, start the process of applying for a loan online, finish filling in the application on the phone in TeleMillennium, and sign the final contract at the bank’s branch office. Thanks to the omnichannel model, Customers perceive the bank as a single institution, and not as several channels. This way, they don’t feel as though they are “branch office” or “online” customers; they don’t have to choose a specific access channel to the bank, but can use any channel that is of convenience to them at the time.
Jarosław Mastalerz, electronic banking manager at Bank BGŻ BNP Paribas:
Omnichanneling is a customer service philosophy, especially for those people who appreciate modern solutions. The customers’ awareness regarding the use of contact channels is growing, and their expectations are changing with it. It is one of the most interesting challenges of modern electronic banking, which allows the transfer of information in a simple and accessible way. At BNP Paribas the omnichanneling primarily means creating a dialogue with customers in every aspect of their contact with the bank, beginning with acquainting them with the bank’s offer and ending with the completion of the activities regarding the selected product or service. One of its most important advantages is convenience for the customers. This means that every action that is interrupted in one channel can be completed using other channels, without losing any time to re-enter the data. Another important advantage of the real omnichannel model is consistency in presenting information provided by the bank. It is essential in the customer experience, because most customers expect that access to the bank’s products and services will be at the same level whether accessed online, offline, on mobile devices and in social media. We want to improve the quality of our services by maintaining contact with the customer and omnichanneling creates many opportunities for doing so. The transfer of information about a personalized offer between distribution channels makes it easier to make an informed financial decision at any time. Currently, our ambition is to rebuild analytical tools and customer service systems to make them compatible with the omnichannel model, in order to build long-term customer relations while ensuring the highest standards of communication. We see here room for improvement regarding the effectiveness of sales of the bank’s products both to new and existing customers.
Robert Hibner, deputy director, department of retail banking marketing at mBank:
mBank is the bank, which is based on the idea of multichanneling. Developing alternative access channels to the bank is in our DNA and we have been doing it since 2000, when - under this very brand name, - we created the first online bank in the country. In our understanding, omnichanneling provides the customers with access to the bank in every possible way - at the branch office, via Internet, smartphone and a mobile app, as well as by phone. In 2013 we gave our customers the new online banking service that combines all these features, providing an additional opportunity to benefit from the “Online expert” functionality - that is: text chat, voice chat or video chat with a consultant, during which it is even possible to share the screen and documents, so that the customer experience is similar to that at the bank office. When designing the new online banking service we have also made sure that it allows customers to perform all banking operations in a simple way, without having to interact with the bank’s employees. Analyzing the changing world, we have also introduced a new version of the mobile app, which was very well received by international experts (e.g. in reports by Forrester, a global advisory company) and - more importantly - by customers. It should be stressed that in our understanding mobile banking should not be merely a copy of the online banking - but an alternative channel of contact, consistent with likely scenarios in which a customer might need it. So, there’s no point in considering transferring literally every feature we provide in the online service to the mobile service. The most important things are ergonomics and speed, so that the customer can use the bank’s services when standing in a queue for a morning coffee. On the other hand, we also understand that some customers need to be able to contact a bank employee at the bank’s physical facility, which is why last year we introduced a new format of mBank branch offices and we intend to change our network. Lean branch offices will be located in shopping malls, providing fast and efficient service in the basic range. On the other hand, we will open advisory centers in office buildings, which will provide customers with the space necessary to have a longer conversation on financial matters.
Krzysztof Pierzchała, Director of CRM and Sales Support in Bank Zachodni WBK:
Today, banks should not only think about switching over to the multichannel/omnichannel model but should be ready to do so. It’s not just the bank’s need, resulting from the desire to extend the number of access channels or to lower costs. This is what the customers expect. Today, the majority of the population is already shopping online using mobile devices. And this market is growing steadily. Watching the market, we see that every month, or even every week, brings in information about innovations or development of new functionalities. Why would it be any different for banking services? Why should we have to go to a branch office, if we can do something at home or even on the go? More and more often customers expect to get the same or similar offer in different channels and the customers are the ones who will decide where it is more convenient for them to take advantage of this offer. For the bank, it is also an excellent opportunity to showcase their products and services. While the number of customers visiting the branch offices is steadily decreasing, the number of transactions performed online or via a mobile app is increasing. It is only natural in a situation where we browse the internet each and every day, and the mobile phone (or more often a smartphone) is by our side for the majority of the day.
Slawomir Gąsiorowski, acting director of Marketing at Idea Bank:
Omnichanneling involves providing the customer with a range of possibilities to contact the bank. This contact depends on the type of channel, can be either direct, by telephone, or online - each one has its different advantages. We are an institution for entrepreneurs, and this group of customers is in contact with the bank more than retail customers, because - among other reasons - they perform more, and more complex, financial operations. Ensuring a high standard of service required us to implement many of the so-called points of contact, through which customers can arrange their affairs with us. We don’t have a specific team responsible for omnichanneling, and we do not call it a project. It just happens, gradually - we listen to our customers' needs. When opening our new facility, Idea Hub, we broke with the standards; we wanted to create the added value for our customers - a place where they can work without any fees or charges. It is not about the sales functions - Idea Hub isn’t intended to duplicate the functionality of online banking to build customer relationships in the real world. Similarly, a mobile cash deposit machine is intended to build customer loyalty. Customers can order it like a taxi, using a special application. The service is currently offered only in Warsaw, but we plan to expand it to other cities, as well. Our research has shown that Polish entrepreneurs are settling their dues mainly in cash; up to 80% of them personally deliver money to the bank, often doing it in the evenings. Customers lose their precious time which they could spend taking care of their businesses. Using our mobile cash deposit machine, we can relieve them of this burden. We can do this also by offering mobile advisers - a specialized group of consultants who come to the customer’s company on appointment. In the telephone channel, we resigned from automatic hotline (IVR), replacing it with real people. Studies have shown that users are annoyed by automatic messages and, menus. The problems of entrepreneurs are so complex that it is often hard to classify them. We expanded our online channel with the so-called virtual branch office that operates on the online banking level. Advisers, available to our customers via text or video chat, provide their services there. Another channel through which entrepreneurs can also reach us is social media - we are happy to respond to users’ questions on Facebook and Twitter.
Adam Marciniak, Director of the Application Development and Maintenance Division at PKO Bank Polski:
Omnichanneling is not only about the banks offering their services through several different distribution channels, but - most importantly - about all these channels functioning in a mutual information and technical boundary. It is important, therefore, that the distribution channels in the bank’s multichannel distribution model are designed in such a way, as to raise their capabilities and complement other, already functioning channels. The execution of such strategy requires the banks to take a series of measures, among which we should mention, first of all, intelligent analysis of customer data, and not just financial data, and the omnichannel definition of business processes. In principle, omnichanneling is to improve customer service and thereby increase customer satisfaction, and therefore loyalty and ultimately sales (customer productization) both by adjusting the manner and forms of communication to the time and place, and by offering products corresponding to individual needs, by reading them or even creating them. The bank which to the largest degree implements the idea of a wide variety of interpenetrating processes in the communication channels, and modern products that meet the customers’ needs, will build a real competitive advantage on the omnichannel model. At the turn of the year we plan to implement a consistent Consultant panel as a uniform platform to handle the bank’s processes and customers in conjunction with the development of tools to support multichannel offering and execution of marketing campaigns. The Bank has launched the CRM 3.0 initiative - this project will support the strategic objectives of the retail banking (customer-centricity and distribution excellence) by creating a solution that enables interactive dialogue at every stage of the customer’s life cycle. The new model will provide the customer with coherent communication with the Bank in all channels of contact and will allow for faster service. The key benefit of the CRM 3.0 initiatives will be the increased profitability generated by customer relationships, whereas a better understanding of the needs and expectations will improve the process of retention and acquisition. A modern and integrated system, designed for advisors, will enable the achievement of strategic goals associated with an increase in the distribution network’s efficiency.