Introduction: The Promise and Reality of Omni-Channel
The enticing vision of omni-channel suggests that bank customers should have anytime, anywhere access to all services through any channel – be it a personal computer (PC) or a laptop, a mobile phone or a fixed line phone, or an ATM kiosk. Whether at home or on the road, whether speaking to a bank employee or using a kiosk – the omni-channel bank delivers unified messages, seamless services, and contextual responses, all in real-time; seamlessly across channels.
The reality: Building an omni-channel bank can be a messy and expensive proposition. With legacy technology deployed across a complex organizational chart, it's extremely challenging for a multiline financial institution to serve the mythical customer who expects to initiate a complex mortgage loan online, check on its status at the ATM, follow-up with a customer service agent over the phone, and finish on the mobile phone in rapid succession, without any of the separate channels skipping a beat.
Investments in an omni-channel strategy are hard to justify given the way people actually interact with their banks. From the customer's perspective, their preferred channels should be available and should work as expected; they're only going to switch if there's a problem.
Solution: Organizational Structures that Support Omni-Channel Development
Fixing an inefficient relationship between capabilities and channels involves a major technology development effort. However, the main hurdle is not technological, but rather organizational. At most banks, channels are owned and managed by the product teams, which in turn roll up into commercial banking and consumer banking divisions. For example, a bank's mortgage business unit, part of the retail bank, may have responsibility for channel functions including the section on the website corresponding to mortgages, a mortgage rate app, the call center for mortgage related questions, and for staffing the branch with mortgage experts.
One can usually discern a bank's organizational structure by looking at its website. Often, different functions are made available from different parts of the site – sometimes with separate login credentials – for investments, mortgage, and retail banking. Within a rigid hierarchical structure organized by customer segment and product, there's no obvious place for someone with budgetary authority to take the ownership of omni-channel investments across the entire enterprise.
At a recent American Banker's Digital Banking Summit, several attendees from the banking industry relayed their difficulties in finding the right organizational approach for managing customer experience across channels.
Generally, organizations tend to follow one of three models for addressing the omni-channel challenge:
- Oversight: An executive is named the ‘channel czar’, head of customer experience. In managing customer experience programs, this role is responsible for securing alignment, commitment, and budget across multiple lines of business (LoBs).
- Enablement: The organization institutes a shared services model with a centralized approach to channel governance. Activities such as customer experience reviews establish baseline criteria that limits the extent to which lines of business can deviate with regard to channel deployments.
- Authority: Budgets and decision making power are granted to the executive in charge of channels and customer experience. Financial services have a high number of customer channels as well as a large volume of highly complex products and services, making this approach rare in banking.
Over time, banks will reap the benefits of a uniform channel architecture and centralized IT infrastructure by being able to transform their operations as the marketplace changes. As the channel mix evolves to include new devices and form factors, existing patterns of customer behavior are sure to change as well.
In creating a uniform channel architecture (and experience), the technology is the easy part. For this type of technology to take hold, banks will need to have centralized organizational structures that unify product managers and line of business executives around the need to deliver consistently positive customer experiences. As new technology begins to blur the lines between commerce and communications, customers will begin to compare banks not just to other banks, but also to other prominent retail service providers in the digital world. For banks, the question isn't whether you're as capable as a competing bank in digital commerce, but whether your customer experiences are on par with the channel flexibility and ubiquity of companies such as Amazon, Facebook, and Twitter.
It's not impossible for a bank to make that leap in customer experience. However, such a leap requires every line of business to coordinate their efforts such that the organization can traverse the gap as one.