In Part 1 of this blog, we mentioned that the key to making retail banking relevant again is a seamless omnichannel experience. We also used Umpqua Bank as a successful example. In this second part of the blog, we will discuss the challenges and the steps that should be taken for organizations to achieve the omnichannel experience.
Most banks have an operating model where products and channels function in silos, and business processes that require layers of signoffs from legal, marketing, finance, and operations. That’s a handful of people who can say no against one who can say yes. In order to keep up with the competition, banks will need to redesign their operating models – something that the retailers have already started. For example, Macy’s spent $400M to turn their stores into a fulfillment center for their online shopping site (see article here). Additionally, a recent appointment of Angela Ahrendts to the position of Senior VP in Retail and Online Stores at Apple comes with the responsibility of leading both channels and with the goal of creating a seamless customer experience across all of Apple’s channels. And, evidently, Umpqua Bank also has recognized that enhancing the omnichannel experience would increase customer loyalty (see previous blog).
As a start to change, one should examine the existing operating model to understand customers’ behaviors when performing different activities – checking balances, shopping for a mortgage or credit card, paying bills, etc. Each activity requires different interactions with the customer. A journey mapping exercise can be performed to identify pain points in the current state as well as the ideal future state customer experience.
The next step would be to build the enhancements in bit sized functionalities. The traditional “way” of product development requires long cycle times which no longer meet customer demands, and such approach is usually costly. Multiple, regular updates like what you would receive from your iPhone apps would provide faster, more timely and relevant enhancements.
Finally, test the change with a small targeted group. A recent transformation project where we helped a bank client migrate its customers from an older platform to a recently acquired technology provided us with valuable insights by talking to and interacting with their customers. This bank has recently gone through multiple changes with their customers due to prior mergers and acquisitions. The Account Managers pointed out when they explain to customers that the bank is migrating to a different platform, customers reacted with negativity and frustration due to their prior experience. However, when customers were told this is an “upgrade” to their existing platform, the reaction is usually positive and welcoming of the new change. This information should be shared and distributed within the ecosystem to ensure the success of the change.
Tammy Wu is a manager in West Monroe Partners’ West Coast Banking and Credit Unions Practice. For more information on customer experience and target operating model strategies in the financial services industry, please contact her directly at firstname.lastname@example.org.