Editor’s Note: This is the second in a two-part series offering insights (and correcting some perceptions) around an omnichannel strategy.
SAN DIEGO–Financial services providers are making significant investments in an “omnichannel” strategy even if, as one expert observed, many are finding themselves back where they were five years ago.
As CUToday.info reported here in the first part of this series, a show of hands by attendees from banks and credit union in attendance at D+H’s Connections Conference here made clear they are committed to omnichannel delivery even while acknowledging that at the same time none feels they are close to being where they want to be.
One big hurdle: internal issues, especially in how clean data is and then in how it’s cataloged once its clean.
Ed O’Brien, director of the Banking Channels Advisory Service of Mercator Advisory Group, who emphasized understanding that “omnichannel” cannot be confused with “multi-channel,” also told the meeting that expansion into new channels should not come at the expense of the branch, despite what some may think.
When it comes to capturing data, O’Brien said much more than just the data a financial institution may have on a consumer is going to be needed. He said credit unions and banks must capture account and personal data, online and social media data, public records, government and legal and compliance data, and core, channels, CRM and legacy data.
“Some of this is structured, some of it is not, and all of that needs to be protected. It’s not easy,” he acknowledged.
But it’s also necessary, he added, noting that “consumers increasingly want the financial institution to present offers based on their account history. Privacy is very important, but consumers say ‘yes’ to having specific offerings for them.”
Hygiene Issues
Before any FI can get to that point, he noted “data hygiene” remains an issue, and that a lot of data needs to be cleansed. “Many financial institutions are still back where they were five years ago here. They haven’t solved internally numerous issues, including how they catalog data. We are suggesting more time be given here. It may seem easy, but it has to be fixed so it won’t happen again.”
O’Brien told the D+H meeting that analytics will be a “path to both insight and enlightenment. The idea is to move more toward projections; the goal now is to get as close to real time as possible. Then over the next few years or 10 years, we think there will be a lot of capabilities to use customer analytics in projections and understanding what is the next most likely product to offer, without the customer feeling they are being spammed.”
About Those Other Channels
Meanwhile, when it comes to other channels:
- O’Brien said it’s “amazing” what has happened in the “boring” ATM channel, which he said can be an “enabler for customer satisfaction. The idea of pre-staging through your mobile phone, then perhaps getting a QR code, can create sub-10-second transactions at the ATM. We’re hearing customers like getting in and out quickly. There is also the feeling of security. We’re told that the capabilities to be able to use the QR codes for someone who does not have an account at your FI is also in the works. It won’t be double-digit growth in next few years, but we’re hearing in our research that the interest is there. Many still aren’t aware of this.”
- Half of consumers would try in-branch videoconferencing with a specialist or remote teller, O’Brien said of Mercator research. Forty-five percent said they would try either a teller-assisted videoconference or self-controlled.; 26% said they would try either approach; 26% said they didn’t know, and 30% said they would not try either.
- Downloadable mobile apps will continue to have even more and more adoption, according to O’Brien. “Consumers are increasingly using the FI website and mobile apps when accessing mobile banking. Some of this is the idea of moving toward larger screens and tablets and phablets. Contrary to some articles I’ve read, not everything is going to apps. Particularly with tablets, the opportunity to do exploratory research and what-ifs is still important. The fastest growth in the U.S mobile ownership is for larger smartphones and smaller tablets. So these phablets is where the growth is.”
- O’Brien called personal financial management “an interesting animal. We’ve seen interest in the concept, but adoption has been less than great in the past. We’re seeing quite a bit of interest in auto-discovery and looking at what someone is spending. We think mobile PFM with auto-discovery is going to become something of interest. But there is still a discussion to be had there on how to make it profitable.”
- O’Brien said the accelerated path toward digital banking has things headed in a “very exciting direction, but it’s also a little scary—who should I be partnering with? Right now the most common thing we’re hearing is to be like Switzerland, to able to work with anyone. There are questions over over how to keep customers/members in the fold.”
When it comes to all of the above, O’Brien observed, “None of the channels is ever going away, but the expectations are still high across all of them.”