Do you omnichannel? Some customers insist on it

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Going omnichannel had immediate results for First Tech Federal Credit Union in San Jose, Calif.

The Silicon Valley institution in May began offering a more cohesive customer experience across all technology platforms. Simply put, that meant if, say, a customer started an application on an iPhone, continued on a desktop and then finished on an iPad, the process would keep picking up where it left off. The goal is no lost information or repeated steps.

Within the first week, First Tech notched a 65% application completion rate, easily besting the industry norm of around 20%.

“We want to make it very easy — either to join as a new member or sign up for a new product,” said Mike Upton, the credit union's chief digital officer. "We want that experience as seamless and as simple as possible."

First Tech’s experience is a case study for the larger banking world, which has deployed omnichannel techniques in fits and starts. An omnichannel experience in the application process can increase the number of new customers and boost business from existing clients for credit unions and banks.

“We believe banking happens where the user is,” said Tyler McIntyre, founder of Bank Novo, a startup bank targeting other startups and small businesses. “That’s where it should happen. It doesn’t matter if he accesses it in Alexa, desktop or a laptop. Omnichannel is extremely important because the customer expects for it to happen in whatever platform they are using.”

Retailers such as Neiman Marcus and Sephora have successfully implemented that kind of customer outreach strategy. But the consultancy McKinsey & Company notes omnichannel has been inconsistently applied in the financial services world.

“Most banks in the U.S. and Canada are still firmly entrenched in a ‘multichannel’ approach, that is, they offer a choice of channels but a customer’s interaction history does not follow them as they switch between channels — which dramatically reduces the value for the customer,” according to a 2017 McKinsey report.

As banks develop more virtual-outreach capabilities, they want to give customers as much choice as possible, said Ken Dodelin, vice president of conversational artificial intelligence products at Capital One. But an evaluation must be done for each channel he said: How mature is it? Does it have a scaled audience? And how is customer data from the channel managed?

“There is a desire to leverage AI and machine learning to have customer context in every communication we have with the customer, whether you interact with us in the website or app or chatbots,” Dodelin said. “We want to be able to bring that context into subsequent experiences.”

First Tech, which has over $12 billion in assets and more than 520,000 members — some of whom work at Hewlett Packard, Microsoft, Intel, Amazon, Google and Salesforce — applied omnichannel to products such as savings and checking accounts, house and car loans, credit cards and insurance offerings. The credit union retained the services of Avoka, a financial services software company, and its Transact platform for the new feature.

As an example of the new application process, Upton said First Tech was able to cut down its auto loan application from 25 questions to six. It used to take an auto loan application about 20 minutes to answer all the questions. Simplifying the application process lowered the average completion time to five to six minutes. And there has been a 50% reduction in time applying for all account openings. The first week saw 2,379 completed applications, First Tech said.

The partnership between First Tech and Avoka helps put aside “a feeling out there that credit unions and fintechs were at odds with each other," said Samantha Amburgey, Michigan State University Federal Credit Union’s chief information officer. "They are really not.”

As many financial executives now acknowledge, the customer experience is informed by omnichannel tech giants such as Amazon and Apple, Amburgey said.

Bank Novo’s McIntyre said financial institutions have to please a wide range of customers, including those who want to be all-digital and those who still insist on checkbooks. It can be done, he said.

“If you want to excel in the financial world, you need to be everywhere the customer is,” McIntyre said.

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Customer experience Customer-centricity Digital banking Online banking Credit unions Fintech