We live in a world where immediate gratification is the norm. Consumers evaluate their service providers based not only on value and service quality but also on speed. The realm of financial services is no exception to this trend. Banking customers increasingly seek a level of convenience and accessibility that only omnichannel banking can provide.
The strategic integration of digital technologies has played a crucial role in enabling competitive advantages across various industries. However, certain sectors have been more prompt in embracing a customer-centric approach compared to others. Retailers and social media giants are renowned for delivering user-friendly experiences, whereas some more traditional industries need to adapt faster.
In the banking sector, digital innovations have primarily focused on streamlining transactions and improving internal operations. Nevertheless, from a customer’s perspective, there is a pressing need to revamp the entire banking experience. Research consistently reveals a decline in trust towards banks, and consumers perceive little differentiation among major financial institutions. Moreover, individuals are increasingly inclined to make decisions based on their values when selecting financial products.
Prioritising Technology: Why Digital Natives Drive the Need for Omnichannel Banking
Understanding the need for a comprehensive transformation of the customer experience in the banking industry requires an examination of the values and preferences held by younger generations, such as millennials and Generation Z. These digital natives prioritise accessibility over traditional business hours, seeking the flexibility to engage in banking activities across multiple mobile channels, at any time of the day or night. They prioritise the convenience of banking from anywhere and at their convenience rather than relying on physical branch locations. Furthermore, they are inclined to support brands whose values align with their own.
The Importance of a Customer-Centric Approach inOmnichannel Banking
It is evident that banks and financial institutions must update their customer experience to resonate with younger generations. However, it is premature to discard the traditional customer service principles completely. In reality, the omnichannel customer experience should be perceived as a spectrum, offering suitable journey options for diverse customer segments. This approach ensures the satisfaction of all four generations of customers.
The key to winning over customers lies in the delivery of seamlessly designed customer experiences. This explains why the latest wave of innovators in the financial services sector have drawn inspiration and adopted design principles from customer-centric industries like retail. They have moved away from a purely transactional mindset and now recognise that meeting customer expectations is only half the battle; the other half involves anticipating future needs.
Omnichannel vs Multichannel: Redefining Customer Journeys in the Banking Industry
Both multichannel and omnichannel approaches provide customers with various avenues to interact with banks. However, the distinction lies in the omnichannel approach’s emphasis on the digital customer journey. The omnichannel experience facilitates a contextual understanding of the customer at every digital touchpoint.
The Benefits of Omnichannel Banking
From an experiential standpoint, this approach creates a sense that the financial provider is meeting the customer at their current stage of the journey rather than attempting to catch up by employing numerous communication channels. Technically speaking, this method is also more advanced. Omnichannel integration relies on a single source of accurate data, even when users transition between different channels. This stands in contrast to traditional systems that necessitate duplicating data across various channels.
An additional significant benefit of the omnichannel communication approach is its ability to facilitate personalised interactions like never before. It enables businesses to deliver customer experiences across a spectrum that caters to diverse generations and preferences.
Adapting Customer Journeys: Meeting Evolving Preferences in the Digital Era
Strategies that were effective for your customers before the pandemic may no longer suffice. Financial institutions are now responsible for designing engagement paths that align with their customers’ new preferences.
The decline of cash, coupled with the rise in contactless payment methods, is an evident consequence of the pandemic. Incorporating the growing usage of digital wallets and biometrics for payments is crucial for enhancing the customer experience. A recent report by Visa indicates that 85% of consumers in the US expect digital options for in-person payments, while 65% prefer contactless payment methods.
While digital touchpoints are set to play a more prominent role than face-to-face interactions in the banking sector, maintaining a human touch remains equally important.
How to Meet Evolving Customers’ Preferences in the Digital Era
Banks encounter a significant customer experience challenge due to the limitations imposed by existing digital systems. There is a threshold to the extent of retrofitting and redesigning that can be undertaken before addressing the capabilities of these systems becomes imperative.
Nevertheless, many banks are confronting the reality that a fundamental reconstruction is not only necessary to realise their vision of customer centricity but is also becoming increasingly urgent. In contrast, their fintech competitors, who are digitally native right from the start, possess the advantage of leveraging robust data analysis on flexible, cloud-based architectures. This empowers them to swiftly adapt their business strategies in response to evolving market dynamics.
Understanding Your Customer Base: Personalisation and Data Utilisation in the Banking Industry
Organisations that have fully embraced digitalisation also excel in data collection and utilisation. Personalisation is a notable manifestation of this capability. Incorporating personalised interactions throughout the customer journey yields numerous benefits for businesses.
It captivates customers’ attention, fosters brand loyalty, and drives higher sales. Social media platforms have effectively harnessed this approach by anticipating users’ preferences and displaying content accordingly.
However, this predictive element has been largely absent from customer engagement in the banking industry. For instance, during the pandemic, which caused financial upheaval for many individuals, only a limited number of banks were capable of effectively responding to their customers’ changing circumstances.
Embrace Digital Disruption to Build Trust: Accelerating Omnichannel Transformation in Banking
Implementing hyper-personalised products cannot be achieved through a single solution; it necessitates the real-time integration of digital capabilities like Conversational AI, big data analytics, and cloud-based architectures. Banks must expedite and expand their digital transformation efforts to effectively understand and cater to customer needs.
Consumers now have higher expectations from their banks, considering that social media platforms and retailers can proactively anticipate their requirements and deliver services when and where they are needed. Customer experience has become a crucial factor that influences how financial providers engage with consumers and compete with one another.
By using an omnichannel communications platform, which focuses on seamless and contextualised customer journeys, banks can address the complete range of their customers’ needs. It is imperative for financial providers to leverage the available tools and platforms to create intuitive and genuine omnichannel experiences that align with the way their customers lead their lives.
Are you ready to create your own omnichannel banking strategy? Talk to one of Soprano’s experts!