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The Difference Between Omnichannel and Multichannel Banking
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The Difference Between Omnichannel and Multichannel Banking

Digital technology and innovative solutions have completely disrupted the banking and finance industry over the last few years. With individuals opting to bank online. Insider Intelligence predicts that approximately 77% of the American population will shift to digital banking. It is expected to increase to over 80% by 2025.

Despite this digital disruption in the BFSI segment, many banks are yet to travel the road where they migrate from multichannel to omnichannel banking.

Let’s understand the two domains and why  banks must make this transition as soon as possible.

What Is Omnichannel Banking?

2021 was essentially the year of omnichannel banking as consumers interacted with various financial service providers via multiple digital touchpoints in order to carry out tasks like opening a bank account or applying for a loan.

Simply put, omnichannel banking is ensuring that consumers are able to access a variety of integrated support and service channels and transition between them smoothly in order to execute their banking related needs. Banks can offer this omnichannel experience to their consumers via voice and phone, chat, SMS, social media, email, and video.

Through an interconnected service, conventional banks can prevent generic pitfalls in their customer service and support goals and deliver a more effective and efficient experience to the end user. Most importantly, it enables banks to synchronize data in real-time and allows consumers the convenience and flexibility to bank using multiple avenues.

From a consumer perspective, this means that they can start the banking process from one channel and seamlessly finish it on another. From the perspective of the banking institution, they gain flexibility and scalability to accommodate their consumers through multiple integrated touchpoints and channels.

What is Multichannel Banking?

Multichannel banking is not new. In fact, it has been around for years.

As the name implies, multichannel banking provides customers access to banking services through several independent channels like the branch, ATMs, call centers, internet banking and even mobile. The services may not function cohesively or consistently across these channels as they were not developed to offer a unified and seamless experience.

Simply put, all of these channels provide a range of services, of which some may overlap across channels. However, each channel operates in silos from the other. Therefore, the customer experience is also not as smooth as it should be. 

What Is the Difference Between Omnichannel and Multichannel?

The majority of banking institutions today are still heavily reliant on multichannel banking as opposed to offering a more seamless omnichannel banking experience to their customers.

The main difference between the two offerings is that multichannel banking uses several independent customer touchpoints to serve the needs of its consumers whereas omnichannel provides a cohesive experience across multiple channels in a more unified and seamless manner.

This essentially means that multichannel focuses on transactions whereas omnichannel emphasizes interactions and engagements across integrated channels, and takes into account real-time data to enhance customer experience.

What’s Next for Banks?

It has a massive undertaking to replace the existing legacy systems in banking institutions with the more unified omnichannel banking processes.

But it can be done with the help of SAP ConsultingIf you are a financial institution in the Middle East considering transitioning to omnichannel banking, then it’s time to speak to MDSap, one of the trusted SAP Companies in Dubai to have a better understanding of how to best achieve this goal for your organization.