The mobile movement driving multi-channel banking

Derek Garriock is head of business solutions at Experian

Despite the significant challenges faced by the UK’s banking sector over the last decade, there has been a dramatic evolution in the customer experience following the introduction of online, telephone and mobile banking. While the branch remains an important channel, especially for older customers, mobile technology is rapidly redefining how customers interact with their banks, writes Derek Garriock.

An omni-channel experience is not only now possible, but it’s what customers expect. With continuous technological advancements and an increasingly financially-savvy customer base, these expectations will continue to evolve.  In this multi-channel era, people want information at the touch of a button, advice tailored to their specific needs, and the ability to seamlessly switch between channels during an interaction without having to start the process again.

The way we bank now

Digital technology has changed the way we will bank forever. Recent research conducted by Experian has found that almost two thirds (65%) of UK adults now own and use a Smartphone, and almost half of UK adults (47%) own and use a tablet. Of those that own a Smartphone or tablet, almost half (45%) use either device to check their online bank balance, while over a quarter (27%) have used their device to transfer money to another person via an online banking app.

The British Banking Association released a report in March that shows customers of the five biggest retail banks have:

• Downloaded more than 12.4 million banking apps.
• Used their mobile phones for 18.6 million transactions a week in 2013 (up from 9 million in 2012).
• Made nearly 40 million mobile and online internet transactions a week in 2013.
• Had 28.4 million contactless debit and credit cards issued
• Signed up more than 457.7 million SMS balance alerts and other text messages during 2013.

Continually improving technology provides an opportunity for banks to engage with their customers across multiple channels and provide a great customer service in the digital age.

Branching out

It is evident that most customers still value face-to-face interaction in banking, with the ‘branch location’ being one of the main factors considered when customers choose a bank. Plus, a great branch experience provides the best chance to turn a customer into a promoter.

However, it is also clear that today’s customer likes to conduct their financial activities quickly, easily, and at a time that suits them. This is where being able to offer a multi-channel approach becomes of paramount importance and potentially a big detractor for any prospective customers of banks that do not offer such services. For instance, Google Research has shown that 46% of people switch channels whilst managing their finances online. Customers are increasingly using multiple channels to gather insight before making informed purchases.

Instead of offering customers the ability to transact through various separate channels, banks need to provide a seamless customer experience that allows a single transaction to occur across multiple channels at a time suited to the customer which will enhance the user experience.  Regardless of where a banking interaction starts – whether it is in branch, mobile or online, a customer should be able to switch channels throughout to receive a consistent and compelling experience.

Playing to strengths

The winners in this new omni-channel world will be those that can create immersive experiences by successfully integrating channels to draw upon their individual strengths as a bank.

As part of the omni-channel experience, banks must create a consistent, compelling and informative dialogue across all channels. This approach requires a strong brand identity, parallel messaging, more personalised customer service and better business intelligence in the form of a centralised database.  There is a significant opportunity for the banks that can adapt to this by investing and utilising new technologies to provide a premier customer experience that unifies all channels.

Successful banks in the omni-channel era will excel at selective targeting, guiding customers through a relevant channel for a specific activity, while retaining the flexibility for serving each individual customer according to their individual preferences.

Leading change

The pressure is on for banks to react to on-going technological changes and provide customers access to their financial information, when and where they want, and through the channel of their choice. This pressure also comes with its own set of problems, particularly amongst the bigger banks that have their roots still firmly dug in to legacy systems which restrict new developments.

Banking and technology are inextricably linked, with the very essence of a bank – from balances, transactions and customer information – existing in a bank’s data centre. More than ever before, technology is shaping the next evolution in banking, whilst also constraining its progress. Redefining how banks approach technology development over the coming years will be key to their success. This is a decision beyond just the CTO, but one for the Board, investors and customers.

While it can seem a challenge for established banks to manage the roll out of an omni-channel approach, the rewards of keeping up with customers’ online and mobile behaviour could prevent banks from being left behind in our digital world.  Customers and the industry are no longer asking if banks will integrate their channels, but how and when.

The good news for banks is that work is already underway to streamline systems, offer access to multiple sources of internal and external data, and provide a single customer view to improve risk and regulatory assessment. This presents a solid foundation for moving into the world of customer centric omni-channel banking.

Those that get this right will be well placed to succeed over the next decade and beyond. It remains to be soon who the winners will be.