Opti-channel banking – way forward for better customer engagements

With an upsurge in technological innovation and the rise of digitally equipped millennials, banking and lending has seen a paradigm shift in its operational and strategic process. Per a...

Scott Smith 6th January 2017

With an upsurge in technological innovation and the rise of digitally equipped millennials, banking and lending has seen a paradigm shift in its operational and strategic process. Per a KPMG research, personalization alone accounts for 23% of the overall experience. Banks now have an unique opportunity to implement big data techniques to provide ‘anticipatory service’ as a transformational tool.

Interestingly, in UK,among the Big 4 banks, a top 100 ranking for customer experience excellence would equate to an additional £3.7bn in revenue over the next three years, based on data from analyst forecasts.

The report also pointed out that despite a strong performance compared to other sectors, the pace of improvement in banking is limited. Between 2013 and 2014, regulatory pressures, a new trust agenda, and rapid progress on digital services drove up customer experience improvement by scant 1%. Between 2014 and 2015, however, this improvement was flat.

This is a serious issue that needs introspection on where things are going wrong. At the same time, with the influx of millennial and digital intercepts, we should not assume that every customer is digitally inclined.

Dave Adams, CEO of MCUL & Affiliates classifies present customers as:
  • Traditional: They rely on traditional channels and interactions.
  • Experimental: They selectively engage in digital for utility value, discovering how experience improves.
  • Transitional: They strive to leverage digital more broadly but may not always be able to do so.
  • Digitally Savvy: They make digital technology, a part of all dimensions in their life. Mobile access is key.

A lot of banks and fintechs have adopted what is popularly known as ‘omni-channel banking.’ The omni-channel banking offers multiple touch points to its customers with consistent customer experience across all channels: physical kiosks, mobile, web, email, chat, customer service, in-branch, and more. This customer experience design was inducted on the assumption that, greater options equate to greater customer satisfaction. Right? Yes, to an extent, but there is a gap in the design logic. . An omni-channel customer service model does offer diverse touch points but does so at the cost of spending money across the entire customer service spectrum rather than putting a heightened focus on the optimal channel that is delivering the most revenue – hence the transition to Opti-Channel Banking.

An opti-channel banking can play a vital role in addressing this issue. An opti-channel engagement strategy strives to apply the most optimal and appropriate customer engagement channel based on the situation or requirement. Through the use of data analytics and machine learning to analyze and interpret behavior, patterns and preference of the customer can be predicted with a higher relevance, which in turn helps in personalization of the customer engagement.

Banks and other financial institutions are already in the process of enabling the personalization of their customer engagement. A Financial Brand survey stated, 53 percent of all banking providers believe they will achieve a unified strategy within two years, and 89 percent predict it will happen in five years. Most telling is a statistic that indicates the necessity of the opti-channel approach: only 64 percent of banks believe a digital-only communications strategy makes sense, instead opting for a hybrid model of physical and virtual meeting points.

In the lending arena, an opti-channel approach can play a major role in cost minimization and more significantly in enhanced borrower experience. This is where an end-to-end lending solution implemented in the Salesforce App Cloud starts to shine. By using Salesforce sales and marketing data, coupled with customer account profile and financial data from other 3rd party data, optimized product recommendations by channel can be created. This in turn reduces cost and time and makes the borrower-lender engagement much more intuitive and experiential.

It is important for lenders to map their borrowers journeys and requirements with the preferred engagement channels. This in turn will enable lenders to leverage customer data and the built -in analytical tools to integrate with predictive models and identify the channel that’s optimum for each point in the customer journey.

An opti-channel approach is the way forward for the banking lending industries . The balance is in finding the right fit, and that is what opti-channel enables a bank or fintech to do.

Cloud Lending Solutions is committed to deliver innovation to the global lending community. For more information about our products, please click here.

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