Banks are quickly moving their focus away from traditional methods of sales and servicing. Money is no longer being spent building branches, but rather on closing their doors. With the typical customer no longer needing to visit their local bank to cash their payroll check, this makes plenty of sense.
Consumers are visiting brick and mortar branches 85% less than they did just 20 years ago. Financial institutions are following suit and closing branches at a higher rate than ever before. In 2013, US banks closed nearly 1500 branches (from a total of 96,000, according to SNL Financial). With brick and mortar consolidation a trend that will continue for some time to come, investment should be carefully planned for alternative channels.
We’ve built the house, now let’s decorate…
For the most part, banks now have all major delivery channels available to customers: branch, online, mobile, and telephone banking centers. This is a good start; however, few banks (if any) have executed a seamless experience across these channels. Bank executives should be forward looking to what can and should be done in the next three to six years. The foundation has been laid; cross channel integration is the next big step and where considerable investment should be allocated.
We need to be realistic here. Cross channel integration can’t and won’t be achieved overnight. Costly integration of legacy systems and adding sales and servicing capabilities across channels is a time consuming and costly process. An onmichannel strategy with target completion by 2020 should be an achievable and realistic goal. This timeframe is also critical as 2020 is likely to be a tipping point for consumer expectations. These expectations will continue to rise as branches continue to close. In the absence of branches, customers will need the ability to perform the same in-branch transactions in other ways. Let’s also not discount the fact that ecommerce leaders in other industries will continue to set (and raise) the bar for consumer interaction and experience – Amazon and Apple being prime examples of this.
Who will win and who will lose?
Make no mistake; omnichannel will soon be the norm in banking. Consumer and business customers will need to have the ability to perform nearly any transactional, sales, or servicing activity across any bank channel. The losers will be the banks that fail to invest in ensuring a consistent experience across all interactions: branch, mobile, tablet, online, call centers. The biggest winners will be banks that not only invest in an omnichannel strategy but those that are able to capture data across these interactions and use it to both the bank’s and customer’s benefit.
The industry is, at a minimum, years away from full integration across all channels. A consistent experience across bank channels will become table stakes but banks that successfully monetize omnichannel banking will be frontrunners.