Banking these days is awash in buzzwords. Daily, we are greeted by gloom and doom assertions about the peril that could befall poor banks that fail to heed the latest dire warning. This is not one of those articles. Instead, think of this as practical advice to get moving.
Ask most financial institutions about their “to-do” lists, and omnichannel delivery will be among their top priorities. Rightly so, in Celent’s opinion. Consumers these days are pretty much digitally driven — a fact that has been spawning increasing demands that retailers of all stripes are struggling to accommodate. Get used to it. It won’t be slowing down any time soon!
Omnichannel delivery was the topic of a recent Celent survey among its Digital Banking Research Panel, a group of 70+ banks and credit unions that collaborate with Celent on a series of surveys on digital topics. Here are a few of our results and why we find them troubling.
Many institutions think of omnichannel as primarily having to do with sales and marketing and less to do with servicing customers. Most banks do need to get better at digital customer acquisition and onboarding, so sales and marketing is a justifiably high priority. But designing a great onboarding user experience only to be followed by the same old multichannel servicing model is a recipe for customer attrition. Institutions need to create a wide range of omnichannel use-cases. Most aren’t.
Omnichannel is undervalued. Even as its delivery to customers ranks among their most important strategic priorities, many institutions embrace a narrow value proposition for omnichannel. Most see omnichannel as a ticket to improved customer acquisition and retention alongside improved customer insights. Far fewer anticipate improved employee productivity, faster time to market for new products, or reduced IT development and maintenance costs. These are all outcomes of the technology and business process changes needed for omnichannel delivery. In Celent’s opinion, many institutions don’t appreciate those benefits or understand their connection to omnichannel.
Early-stage institutions have an overly optimistic view of the work required. Larger banks may have a more difficult challenge ahead of them, but they also have a pretty big head start. This head start has awarded them competitive advantage based on comparatively advanced omnichannel capabilities. It also has opened their eyes to the immensity of the task at hand. Based on Celent’s survey, there are dramatic differences between larger and smaller institutions in the perceived extent of requisite IT modernization that will be required, suggesting that many smaller institutions do not yet know what they are getting themselves into.
The end is not near. Most surveyed institutions indicate omnichannel delivery in high priority lines of business is two to three years away. Lower priority lines of business, such as commercial and insurance, may be five years away in many banks. Since many of those surveyed institutions don’t yet know what they are getting themselves into, we think it will take even longer. Time to get moving!