Social, mobile and visual communication channels are coming together to transform the way consumers interact with their banks and each other. How banks can harness this new reality and some of the challenges they face was the topic during a panel discussion at BAI Retail Delivery titled "Omnichannel Banking -- The Next Evolution in Multichannel Strategy."
Philip Farah, senior director for the retail banking practice at Cisco Systems, said 2012 would be "the year where multichannel ends and omnichannel will start." He described the idea of omnichannel as the fusion of channels to create a unified experience.
"It's the convergence of physical and virtual channels," he added. "The experience initiated in one channel will be seamlessly transferred to another."
Farah said the average consumer "has a readiness and an appetite to adopt new channels," and banks must adapt their channel strategies as well. He said in 2010, U.S. retail sales were up 3.5 percent, even though store traffic fell by .5 percent. Banks face this same paradigm that retailers do, as in-branch traffic continues to decline. He said there will be a change in the function of the branch, to a more service-oriented model, and that video will be the medium to do this cost-effectively, as customers can have access to specialists without a bank having to staff them at each physical branch.
Farah further opined that as the world is more connected and mobile, banks run the risk of further disintermediation from non-traditional financial institutions. He said surveys indicate that a significant portion of consumers are willing to engage in several different kinds of financial services, especially payments, on the mobile channel, and will migrate towards institutions that provide those services. "The risk is not to be taken lightly," he said.
Mircea Mihaescu, director of the technology research center at Russian bank Sberbank, said the bank is expanding the functionality of all its channels to offer "a full spectrum of bank services via all the different means of communication with a customer."
He said Sberbank, which is the largest bank in Russia, is investing heavily in new mobile services for its customers, such as interbank transfers. The bank is also increasingly using web and videoconferencing to service its clients.
Ultimately, said Mihaescu, Sberbank is working toward a "unified front end" that will offer customers a seamless transaction between channels.