Evolution of Channel Banking

Banking jargon like multi-channel banking, cross-channel banking and now, omni-channel banking, has led to confusion among bankers and customers alike. Bankers are unsure as to what banks actually want to offer to their customers, while customers do not know what they can expect from banks' channel banking solutions.

Banks tend to use the omni-channel pitch to rise above competition but clients may not discern this as a significant value-add to the existing services. The onus is therefore on banks to communicate clearly and educate their customers about the difference between omni-channel banking and its predecessor terms, cross- and multi-channel banking.

Although these terms are used interchangeably, there are some inherent differences between them. Traditionally, when a bank claims to provide cross-channel experience, it simply means that "banking is available for customers across different channels" but the user experience differs in each of them. Generally, all channels have their own database with an independent functional and technical logic and, in a sense, they all act independently.

Multi-channel banking refers to a bank's presence across different channels but with a consistent look and feel that fosters a strong brand presence. However, despite this consistency, the functional logic for different channels may be different.

Omni-channel banking caters to the needs of today's customer who wants "everything at any time." The other approaches fail on this count as they are found lacking in one or the other aspect. Omni-channel banking actually allows customers to have a seamless, consistent and real-time experience across all channels. In a bank that is omni-channel enabled, customers can hop from one channel to another and enjoy the same experience in each. Also, different channels work with the same database and share the same functional logic for similar banking activities, so as to ensure consistency.

In a nutshell, omni-channel banking refers to a channel banking solution which allows customers to start a transaction/banking activity on one channel, view it on another and complete it on a third channel, where all three channels afford an identical experience with the same functional logic. With increasing acceptability of social media for banking and a spurt in customers on newer channels, banks need to develop a true omni-channel environment for both their existing and prospective clientele.