Today’s retail banks and financial institutions are laser-focused bridging the gap between legacy technology and the tech stack required for the organizations’ future and long-term success. They’re relentlessly pursuing the ideal balance of strategy, technology, and talent to deliver 5-star customer experiences. And underscoring it all is a non-negotiable, digital-first approach to customer acquisition, management, upsell, retention, and the holy grail: evangelism and referral.

Finserv is investing big in customer engagement, with initiatives that double-down on providing better customer experiences with AI-fueled real-time data and insights and automation that removes every possible element of friction. From lead generation and sales, to optimized customer onboarding and personalization at every turn, CIOs and technology leaders in banking, insurance, and financial services have assumed the role of digital pioneers charged with leading the organization’s digitalization and digital transformation journey.

The digital-first pivot has become undeniably necessary for retail banks. Often, they’re competing with modern fintech and straddling what used to work and what’s going to work in five years is no longer an option. Offering no-brainer simplicity, ease of use & innovation that modern fintech companies are known for is a vital component of future success. Now, they must keep up with digital-native alternatives such as CashApp, Venmo/PayPal, and buy now, pay later platforms such as Afterpay, Affirm & Klarna.

Digital-first fintech brands have omnichannel strategies and proactive customer engagement down to a T. They’ve perfected the art of appealing to their customers for the right things, at the right time, in the right places, and now, it’s time for traditional and innovation-lagging retail banks to do the same. And that’s precisely where omnichannel banking comes in.

What is Omnichannel Banking?

Omnichannel banking involves offering identical products, services, and customer experiences across voice and digital channels. Additionally, it means exceeding customer expectations by using artificial intelligence (AI), machine learning (ML), and propensity models to predict behavior and make it easy for customers to productively communicate with the institution regardless of which interaction channel is used.

True omnichannel banking leverages customer data platform (CDP) and customer relationship management (CRM) tools to capture customer data in real-time and push it through each channel for intelligence-powered customer engagement. In practice, this could look like a new customer creating an account or beginning the onboarding process over the phone but finishing it on a digital channel such as text or email—all without needing to re-submit data that was previously captured on a different channel during onboarding.

Back-office operations are also impacted by omnichannel banking strategies. Omnichannel platforms improve marketing performance, increase retention rates, streamline onboarding processes, enable self-service & automation and so much more. Omnichannel banking enables financial institutions to meet the customers’ needs while simultaneously anticipating their wants and preferences.

But many banks and financial institutions that communicate about their products and services on multiple channels still don’t have a unified platform to capture customer data from each channel. When an issue or interruption occurs during a customer’s journey, frustration, annoyance, and sometimes anger arise to the detriment of a 5-star, referral-worthy customer experience. Often, it’s this exact type of friction that propels a customer to move their assets or investments to a new bank.

Multichannel Banking vs. Omnichannel Banking

Similar to omnichannel banking, multichannel banking involves a bank or financial services institution providing different products and services to customers over a variety of channels, with transactions being the main focus. These include in-branch appointments, on-site ATMs, call center communications, and mobile banking apps—but the key difference is that these channels aren’t integrated in a way that provides a seamless customer experience.

Omnichannel banking, on the other hand, focuses on the individual interactions that make up the larger customer experience. The heart of omnichannel banking is the customer. Personalized communications are a top priority, along with seamless, unified experiences that enable customers to access the same information on any channel.

Omnichannel banking means customers have the same experience on any channel, regardless of whether they’re using a self-service option, speaking with a customer-support agent, or interacting via text message. Their preferences and information are captured from one channel to the next and are always displayed accurately and in real time.

Why is Omnichannel Now Critical in Retail Banking?

While studies show that nearly 60% of financial customers use digital channels, almost half of those customers also want to have access to branch services. For more complex products and services, like mortgages and investments vehicles, most people want to speak to a trusted advisor and have a dedicated, easy to reach point of contact for questions and concerns.

Digital channels have transformed retail banking, injecting unprecedented efficiencies into nearly every operational and transactional workflow, but they simply can’t replicate the human connection or relationship-building opportunities human interactions offer—especially when it comes to expensive or major life decisions. Let’s face it, most people still wouldn’t be comfortable buying their first home exclusively through a bank’s mobile app but judging from the pace of change in banking and financial services, it’s only a matter of time.

Successful retail banks can’t avoid omnichannel or implementing a digital-first strategy, one that that enables a coveted combination of high-efficiency personal and digital interactions. Many banks have already begun ramping up their investments in technology and digitalization. But for those that haven’t, the clock is ticking.

Benefits of Omnichannel Banking

Rapid Issue Resolution

The ability to communicate via online channels means faster, more efficient issue resolution than possible during a face-to-face appointment.

Decreased Support Costs

Digital communication tools like chatbots help customers easily solve customer service inquiries like requesting refunds for overdraft fees. Using chatbots to solve straightforward customer service questions or issues frees up financial advisors and call center agents so they can focus on more critical responsibilities while reducing the level of support staff needed and decreasing total costs overall.

Personalized Experiences

One-size-fits-all approaches no longer serve consumers. Modern customer journeys are often a hybrid and alternate between in-person interactions and digital transactions to provide flexibility and better meet their specific needs.

Improved Customer Satisfaction and Net Promoter (NPS) Scores

When consumer-facing businesses like retail banks provide faster, more tailored customer experiences, satisfaction grows, and customer loyalty and retention increase. By increasing customer loyalty and retention and providing regular surveys, banks and financial institutions can improve their customer satisfaction and NPS scores, leading to better brand recognition and improved reputation management.

Challenges of Omnichannel Banking

Taking advantage of modern technology and automation to improve the efficiency of your business is an important step if you want to scale for long-term growth and success. But, when it comes at the cost of building trust through real-life, in-person relationships and connections, it can be a challenge. Banks need to prioritize meaningful interactions and bridge physical, digital, and voice channels in a way that makes customers feel supported and valued—no matter what channel they’re using.

Prepare for the Future of Retail Banking

Overhauling your existing software architecture in favor of an omnichannel solution isn’t typically an easy process. But when the new, digital-first solution integrates with technology you already use, such as your Contact Center platform, making the switch is a lot less scary.

The wrong strategy, however, is waiting too long to make a change. With technology dominating your customer’s lives, holding out on bringing your bank into the future can be even more costly than making the switch to an omnichannel solution in the first place.

So don’t wait—see how you can improve customer experiences and retention today by exploring Acqueon’s Revenue Execution Platform.