Omnichannel Banking and User Experience – What is the Fuss About?

Nearly every one of us is a frequent flyer member with an airline of choice.  In addition, a majority of us may also have the branded credit card of the airline to maximize our benefits.  Those of us falling in that category should not be receiving offers to open said credit card, but in the past have, leading us to wonder why the airline did not know that we already have the card.  That happened in the past because the systems managing the memberships were not sharing information amongst themselves, leading to a bad customer experience. 

With the ubiquity of mobile devices and social platforms, it is very easy these days for individuals to share their experiences, good and bad, with a large number of people.  Today most people look at these “reviews”/experiences when making a decision to buy a brand or product.  Recently, United Airlines and Wells Fargo, two well-known and respected brands, took a hit to their reputation because of the bad experience their customers had with them.  United Airlines because of the video of a passenger being dragged from one its planes went viral, and Wells Fargo for pressuring personal bankers and tellers into selling more accounts to customers than they needed, which ended up in unauthorized accounts being opened in their names.  On the other hand, you have companies like Amazon, Uber, and Netflix, to name a few, that retain their customers and continue to grow their base without direct sales people and purely based on the experience that people have interacting with the brand which does not differ regardless of the device or point of interaction.

According to Tiffani Bova, the global customer growth and innovation evangelist at Salesforce, customers remember the experience they have with a brand longer than they remember the price they paid.  She further goes on to mention (in her book, Growth IQ) that customer experience matters because: 

• Three-fourths of 3,000 business-to-business (B2B) companies surveyed ranked customer experience as a major factor in supplier choice
• 68% of C-suite executives expect organizations to emphasize customer experience over products in the future
• 86% of customers are willing to spend more for a better customer experience
• 70% of buying experiences are based on how customers feel they are being treated
• Analysis shows that companies that excel in the customer experience grow revenues 4-8% above their market
• Seven in ten Americans are willing to spend an average of 13% more with companies they believe provide excellent customer service
• The promise of better customer service is a draw for shoppers: three in five Americans would try a new brand or company for a better service experience

So what is customer experience?  Taking another quote from Growth IQ, in principle, customer experience is based on the feelings that arise once customers engage with your products, employees, and various sales, service, and marketing channels.

Market leaders in various market segments have either embraced or are in the process of adopting the approach of presenting a uniform experience to the customer, regardless of touchpoint.  On the other hand, financial institutions have traditionally expanded their branch network to help acquire new customers and grow their deposit base; branch locations reached their peak in 2009 at 82,553.  With a branch available literally on every corner, customers visited branches to deposit checks and enquire about their account balances and that interaction enabled the bank personnel to offer and sell newer products to their existing customer base.  However, with the adoption of remote deposit capture and digital banking, customers are no longer visiting branches for their traditional banking needs, which has contributed to a sharp increase in branch closures.

The Wall Street Journal researched bank branch closures and in February 2018 published their findings that found banks had shuttered more than 1,700 branches in the 12 months ended in June 2017, the biggest decline on record.  Branch numbers fell again in the second half of 2017, which added to the thousands of locations closed following the financial crisis is the longest of closures since the Great Depression and there were 78,774 active branch locations reported. 

Even with a wider acceptance of digital banking, there are still those who value the personal touch.  According to McKinsey and Company who recently published ‘The balancing act: Omnichannel excellence in retail banking’, there are even those who favor banking through an app, and prefer face-to-face interactions for complex financial products.  Several startup banks that opened in the digital era, have taken advantage of the fact that they didn’t have a legacy nor an existing branch network to protect and built their systems and processes based on the customer experience that they wanted to provide.  Banks with a legacy branch network and systems in place need to work towards providing an omnichannel banking experience to their customers in order to compete with the upstart digital banks and payment providers.

Retail banks have been trying to automate customer transactions for decades, usually for reasons of cost.  According to Reimaging the Digital Branch of the Future: Let’s Get Practical, a report published by Bain and Company, each mobile interaction incurs a variable cost of about 10 cents, vs. $4 for a teller or call-agent transaction.  Many financial institutions still have systems that capture different data points based on the channel leading to a fragmented customer experience.  In recent years, however, the opportunity has expanded beyond cost recognition to enhancement of customers’ overall banking experience.  It is even more important now than ever with the number of people working in a gig economy whose expectations are based on the experience they have with the leading brands.  There needs to be a uniformity in their experience with their financial institution regardless of channel of interaction. 

In a truly omnichannel banking experience, customers should be able to switch from one channel to another without fear of the bank losing track of their journey.