Snippet: Traditional financial institutions have been hit hard by digital disruption, with alternative payment methods such as PayPal and Apple Pay presenting strong competition. According to a 2015 report by the Temenos Group titled Shifting Sands: Banking in the Digital Era, the threat that banks are most concerned about comes from non-traditional players, especially technology companies such as Google.

Traditional financial institutions have been hit hard by digital disruption, with alternative payment methods such as PayPal and Apple Pay presenting strong competition. According to a 2015 report by the Temenos Group titled Shifting Sands: Banking in the Digital Era, the threat that banks are most concerned about comes from non-traditional players, especially technology companies such as Google. In order to be top-of-wallet in this highly competitive environment, banks must offer more, extending their ecosystems to respond to payment and social media trends. In short, they need to go omnichannel.

Let’s consider today’s banking client. Mobile ubiquity and the Internet of Things mean they are “always on”. They want to be constantly surprised and delighted by service providers who exceed (note: not meet) their expectations. They want their experience of a mobile banking service to be frictionless and personalized, and they don’t want the effort of jumping between various apps to execute a single transaction. In fact, sticking to banking functionality per se won’t cut it either: Accenture’s 2014 North America consumer digital banking survey The Digital Disruption in Banking: Demons, Demands, and Dividends shows that clients want financial advice and spending analysis as part of their banking app. The Temenos report’s findings are in line with this, revealing that clients would also welcome real-time, location-based offers, access to complementary services (e.g. legal advice) at preferred rates, loyalty rewards, repositories for contextual information such as saving ambitions, and social media connections. That’s a tall order.

Now let’s look at what this banking client has to choose from. Most banks currently offer only limited mobile services, some of which are encumbered by legacy authentication processes such as one-time pins (OTPs). Alternative payment systems may be less cumbersome, but they are more exposed to fraud threats because of insufficient security – an effect of the lack of regulation of these systems. Neither of these represents what the client actually wants. And this is where omnichannel banking comes in.

An omnichannel bank offers the client access to a variety of traditional financial services across a wide range of channels, ensuring consistent brand interaction at numerous touch points. More than that, the bank then uses the data received from the various channels to, over time, create a detailed profile of the client, including their shopping decisions, saving and spending habits, entertainment preferences, level of social media involvement, even holiday plans. Aside from indicating which products would be appropriate to sell to a specific client, the data from these profiles can also help predict client churn and customize retention measures. Banks could even partner up with retailers and service providers (Uber, Airbnb, Netflix) to engage with clients even more closely.

An omnichannel bank is successful in not only attracting, but also retaining clients, possessing the elusive attribute of stickiness: clients are less likely to leave a bank if it acts as the key to securely accessing other services online and if they are used to interacting with it every day. But in order for a bank to capitalize on this opportunity, clients have to trust the bank completely, making available to it even more of their vulnerable personal data than before. The only means for the bank to foster this trust is by providing state-of-the-art security measures such as out-of-band, multi-factor authentication, and X.509 digital certificate technology. And the best way to retain clients is to offer them ease of use: no OTPs, no switching between apps, and no remembering passwords. One way to achieve both of these things is to use Entersekt’s Transakt Software Development Kit, which can be integrated seamlessly into any existing mobile app. Mobile banking secured by Entersekt is trustworthy, convenient and ready to go omnichannel.

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Jolette Roodt

WRITER/ANALYST

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Entersekt is an innovator of customer-centric fintech solutions. Financial services providers and other enterprises rely on our patented mobile identity system to provide both security and the best in convenient new digital experiences to their customers, irrespective of the service channel. With us, they can concentrate on their innovation roadmap, while delivering intuitive, low-friction digital experiences to their customers.