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Dean Nicolacakis, PwC
Dean Nicolacakis, PwC
Commentary
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A True Multichannel Experience? Still in the Making for Many Banks

While many banks have a multichannel strategy, few have the resources and systems to fully execute against it.

The banking industry is at an inflection point. Growing compliance costs, capital requirements, a public trust deficit, the proliferation of social media and other technologies combined with a new generation of empowered consumers with unprecedented expectations for transparency and convenience are just some of the factors pressuring profitability. As banks scramble to adapt, nimble disruptive new competitors are further threatening brand equity and market share.

One area of opportunity for building differentiation and revenue is multichannel integration. While not a novel concept, it is one whose potential is underleveraged. While many customers are currently utilizing numerous channels, only a handful of banks are delivering a cohesive multichannel experience. According to PwC’s recent Global Banking CIO survey, only 19% of respondents have integrated online, mobile, and social platforms. In fact, the current state could be described as multiple-channel at best, with mobile, online, branch, ATM and call center patched together rather than intertwined to deliver seamless continuity through every customer touch point.

Given the obvious relationship and profitability upside, why is multichannel integration yet to reach critical mass? Our client experience and research have identified two key hurdles - mindsets and systems.

Mindsets

Traditionally, product and channel strategy is filtered through the lens of corporate rather than customer objectives and the two are not always congruent. Customers tend to focus on outcomes. Are they investing wisely for their children’s education? Are they getting the most interest on their savings? They view banks as a conduit to get them from point A to point B quickly and cost-effectively. However, many current organizational models are hindered from delivering on this premise by internal silos, legacy systems, metrics considerations, etc. Consequently, the end result is often a complex web of fragmented channels and products that could be hard to navigate and not necessarily responsive to how customers buy and use, when consumers are hungry for streamlined simplicity.

However, the pace of change is likely to accelerate for a number of reasons. For one, the Consumer Financial Protection Bureau (CFPB) is placing a heightened onus on banks to curb high pressure or unfair sales tactics. Perhaps even more importantly, customer experience has emerged as a definitive differentiator and benchmark for long-term growth and survival.

[Related Content: Why Contact Centers Are Key To Banks' Multi-Channel Strategies]

This means that financial institutions may need to rethink how the customer experience bar is set and measured. Minimizing errors and offering channel options is a baseline. With today’s premium on personalization, “one size fits most” no longer moves the needle. Customers want to feel that their bank understands their unique nuances and tailors the relationship accordingly. The true competitive advantage and ROI reside in getting beneath the skin of the customer with holistic segmentation that considers a range of behavioral and attitudinal drivers outside just financial habits. Banks need to foster an empathetic culture that empowers the front line to do what is necessary to address a client’s needs within the boundaries and spirit of the law. This type of customer-centricity is the cornerstone for the ideal state where transactions are replaced by interactions and products/channels evolve into solutions. Simply put, this means awareness of a customer in every stage of the financial and transaction lifecycle across multiple interfaces. For example, if a deposit appears online, it should trigger other channels – bill pay reminders, investments, etc. or a branch should be able to seamlessly pick up where the call center left off on an issue.

Systems

The underpinning for an effective multi-channel strategy is a real-time, 360 degree, single view of the customer. Unfortunately, this type of connectivity is challenging to achieve when most banks systems run on batch architecture. Transforming to a real-time transaction environment requires empowering the IT function to transition from systems developer/deployer/maintainer for disparate product groups to a systems integrator with a focus on enterprise-wide initiatives. This is a significant undertaking that involves assessing a number of factors like whether core banking applications are extensible enough to quickly share real-time information with partners or new systems, if the bank’s infrastructure can be available 24/7 – even if the core banking platform is down for maintenance and how the layers of security risks would be handled.

Moving the Ball Forward on Multichannel

While many banks have a multichannel strategy, few have the resources and systems to fully execute against it. As banks continue to invest in technology and other capabilities that will enable them to move toward a true multichannel environment, the following are a few suggested considerations for enhancing customer experience:

-- Dedicate a team member to oversee customer experience

-- Build enterprise assets to support a single customer management approach, including voice of the customer, customer journey mapping and interaction management

-- Simplify the customer interface, reduce your number of products and consolidate operations

-- Build more holistic profiles of customer needs and interactions

-- Deepen cross channel analytics capabilities to include current channels and emerging capabilities like speech analytics

Dean Nicolacakis is Principal in the Banking and Capital Markets Practice at PwC

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DeanN051
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DeanN051,
User Rank: Apprentice
12/12/2013 | 3:58:16 PM
re: A True Multichannel Experience? Still in the Making for Many Banks
While I agree that there is some cross system connections needed, I think the larger issue is to recognize that interactions need to be separated from transactions in the customer and the product systems....it basically thinking about interactions as a separate system.
DeanN051
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DeanN051,
User Rank: Apprentice
12/12/2013 | 3:55:16 PM
re: A True Multichannel Experience? Still in the Making for Many Banks
There is definitely a movement to focus more on the customer in retail banking. The tie that isn't happening enough yet is the tie between operational risk work that banks are doing and customer experience work they are doing. The bank that figures out this tie will be more efficient and effective at addressing the shift to customer.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/25/2013 | 9:32:54 PM
re: A True Multichannel Experience? Still in the Making for Many Banks
I agree, the challenges around interconnectedness of systems and the silos within organizations are things that are going to take time and have to dealt on a very practical level before any multichannel seamless experience is made possible.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/25/2013 | 9:30:01 PM
re: A True Multichannel Experience? Still in the Making for Many Banks
The topic of segmentation of products and services for specific consumer sets was a big one at BAI earlier this month. But those customized experiences need to be available across different channels, and need to be part of a multichannel experience that is already in place.

Another observation I had reading this is how often I'm starting to see executives with positions directly related to customer experience now. I think banks are taking on Dean's first suggestion here, but I don't know how much of a difference it is making. Probably differs bank to bank.
KBurger
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KBurger,
User Rank: Author
11/21/2013 | 6:56:05 PM
re: A True Multichannel Experience? Still in the Making for Many Banks
Read in conjunction with Jon Camhi's article today about research that shows bankers feel legacy systems are impeding their digital strategies http://www.banktech.com/manage..., this article to me is more discouraging than encouraging. I'm not disagreeing ewith Dean's analysis, it is right on. But I feel like we are going around and around having the same discussions, agreeing on what the problems are & what needs to be done, yet nothing changes. This is not good. There are too many disruptive forces out there for banks to avoid making significant structural changes. These are risks that have to be taken.
Byurcan
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Byurcan,
User Rank: Author
11/21/2013 | 1:25:47 PM
re: A True Multichannel Experience? Still in the Making for Many Banks
It's true that many banks talk about multichannel, or "omnichannel" but few get there. As the article notes, the key is to take practical steps rather than approaching it as a pie-in-the-sky grand vision.
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