The first credit card was issued just after WW2, and Diner’s Club became popular a little while afterwards. The challenge was that you couldn’t interconnect all the banks and their cards, you could only use the allocated card at the specific bank, but the solution to that essentially was the birth of payment systems.
The Bank of America were the first to put this into practice, calling it the Bank of America System Experiments, which eventually became what we know as Visa today.
Visa started coming up with a standard on integrating payments systems, but ACI Worldwide in the USA was the first company that brought to market commercially available payment platforms. “Their first switch was made available in about 1982,” says Liam Mc Dermott, Pre-Sales Manager for Payment Platforms at Altron Managed Solutions.
“The most predominant protocol in the payments world for the last few decades is a protocol called ISO8583:1987, and that came out five years after the first switch became available up until that point. The concern here is that everyone was speaking different languages (message protocols).”
Mc Dermott references the disjointed experience of being a client of a bank. “Banks traditionally have a single channel for their ATMs. They have a channel for their credit card machines, internet banking, mobile banking, vehicle, and asset finance, and they’ve got a channel for home loans, respectively. It can sometimes feel like you’re the client of multiple banks because the different departments are not communicating with each other,” says Mc Dermott. “If you combine that with working on multiple platforms, the experience is even more disjointed, e.g. mobile, desktop and eventually in-branch.
“Why do we need a separate channel for ATMs and a separate channel for credit card machines and then a separate channel for internet banking? Why can’t they all go to the same place?” he asks. “We call this the ‘one switch for all’ policy/approach, and the idea is that all things work together. Your customer experience can be the same across all the channels because they see the same data – this is the spirit of Omnichannel”.
The latest generation of omnichannel is taking things to the cloud, adds Mc Dermott. Banks have perhaps been a bit slow on the uptake because banks prefer the control element of working on their servers and in their datacentres. “They know no one’s going to gain access, and their network is locked down. But one of the cloud’s core advantages is elastic scalability, which means more storage space, more memory, more processing speed and capacity, if and when you need it.
Retailers have successfully been running their omnichannel for years, and banks are lagging. The problem with all these disparate systems is that the systems are not talking to each other. The customer then doesn’t get the same experience across the board, which can be unpleasant. “The cost is much higher for the banks because they have to maintain four or five disparate things with four or five different sets of people with different skills,” says Mc Dermott.
Omnichannel should bridge that gap and deliver a seamless multi-platform experience for the customer. “We’re not going back and reworking an old wheel to make it a better old wheel. You can start a transaction on your mobile phone, and then, when you walk into the bank, you can continue the transaction at the ATM and complete a purchase of a service or something with your credit card. Everything’s easy. Everything from the ATM to the credit coverage, to the service in the bank, to mobile banking, to vehicle finance, you can do everything on the same platform. That’s the idea!”
Altron Managed Solutions
Altron Campus, 20 Woodlands, Woodlands Drive,
Woodlands Office Park, Woodmead
PO Box 3591, Johannesburg, 2000, South Africa
+27 (11) 373 4000