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Why Financial Institutions are Switching to Omnichannel Banking

Trends in consumer behavior are shifting rapidly within the financial industry. As a result, consumer expectations for a seamless, omnichannel banking experience are rising. Credit unions, banks, and other financial institutions must prioritize and invest in omnichannel strategies and tools if they hope to stay ahead of the competition.

A major force behind these changing behaviors continues to be the rise in digital adoption. According to a new report from Microsoft Dynamics 365, 75% of financial organizations say that since the pandemic began at least half of their account holders have switched to using digital financial services for some of their banking transactions.

As part of the Expectation Economy, consumers continue to revolutionize how they get things done and, as a result, their preferences for brands, services, and tools are rapidly shifting. Banking is no exception, and a superior omnichannel experience has become a major competitive differentiator for financial institutions. This isn’t a replacement strategy, but one that offers a hybrid multichannel experience so consumers can choose how to bank. Because while branch and drive-up services continue to decline, the most recent BAI Banking Outlook report states that nearly 40% of financial services interactions will still require human assistance. This means that the need for sophisticated, robust omnichannel strategies similar to those in the retail industry will be a primary factor as consumers choose where they bank.

What is Omnichannel Banking?

Avtex defines omnichannel banking in much the same way as we define omnichannel retail: a frictionless consumer experience characterized by easy navigation and seamless movement between channels. Omnichannel banking also represents an emphasis on consumer interactions in addition to transaction execution. When done well, omnichannel banking efficiently blends human and digital touchpoints personalized for everyone’s unique needs and preferences.

Banking experts often define digital tools as the pulse of banking consumer interactions yet consumers still prefer a broad range of channels. While trends toward digital banking are increasing, most financial services experts agree that a large portion of account holders prefer an omnichannel banking experience that provides a seamless mix of physical and online services. This mix may include anything from traditional full-service branch locations and ATMs, to complete digital platforms powered by advanced technologies like mobile apps and AI-based help functions like bots and virtual assistants.

While some preferences can be predicted based on age, other consumer characteristics like geographic location, profession, education, and even levels of risk adversity, will continue to drive preferences for an omnichannel experience. Although the adoption of digital financial services accelerated significantly as a direct result of the pandemic, this consumer behavior is not going away. It’s clear from the heightened levels of digital adoption, even as the pandemic slows, that the desire and expectation for frictionless, robust omnichannel banking experiences are here to stay.

As we’ve learned from the retail industry, a strong omnichannel strategy must differentiate from a merely multichannel consumer experience (CX). While multichannel experiences focus on interactions within each channel, omnichannel banking focuses on interactions between those channels as well. This requires a deep understanding of consumer and employee needs and preferences and should incorporate an organization’s North Star, the business’ overall philosophy, and its approach to CX.

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4 Primary Benefits of Omnichannel Banking

To meet these new consumer expectations, credit unions and banks must make the transition from multichannel to omnichannel banking experiences. The good news is that this transformation is well worth the effort. Beyond providing a powerful competitive advantage, the ROI for implementing a strong omnichannel strategy includes several long-lasting benefits for your organization.

Deeper Data Insights

A strong omnichannel strategy delivers a comprehensive, deepened understanding of how your account holders move between channels as they use banking products, conduct transactions, and interact with your financial institution both digitally and in person. These data insights can help spot potential opportunities for suggesting additional products, solving issues before they become a problem, and spotting new preferences as they emerge.

Improved Digital Security

A strong omnichannel banking strategy incorporates the power of multi-factor authentication, deploying sophisticated digital tools for cloud platform protection, mobile app verification, data loss prevention, and increasingly, machine learning, and other AI-based security tools.

Accelerated Cost Efficiency

Strong omnichannel strategies consider the holistic channel experience – both digital and in-person – to identify opportunities for streamlining operations and eliminating redundancies (using AI tools for process automation and service interactions, for example). These strategies will help to drive cost efficiency while also preserving the full multichannel capabilities your employees and account holders expect.

Stronger Online Experiences

For most banking consumers, preferences for 24/7 digital engagement will continue to grow. Delivering the best service in these moments means building a differentiated experience that enables seamless movement between channels, to boost loyalty and improve overall satisfaction within every interaction.

Avtex Builds Transformative Omnichannel Strategies

To remain competitive, credit unions and banks must make the shift from a transaction-based focus to a strategy that improves every interaction as part of a more robust omnichannel experience strategy. Consumers have multiple ways to engage with your organization, but they need to feel that these options are consistent, personalized, and informed across any and every channel they choose.

At Avtex, we have helped hundreds of financial institutions across the U.S. develop and implement omnichannel strategies that deliver tailored experiences while driving efficiency, transparency, and results. With decades of experience building strong consumer experiences, our experts know how to create omnichannel banking strategies that help your consumers feel like they are having one conversation from start to finish, no matter how many times they switch channels.

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