| WEB NOTES |
Nearly all banks operate call centers to support their retail customers, but most aren't getting the bottomline results they expected. That disappointment will likely grow as branchless banking picks up speed. The reason: most bank executives aren't clear about their strategic goals for call centers--which should be to make them profit centers, not cost-containment fortresses. Moreover, the success of Internet banking depends absolutely on getting it right with call centers.
These disquieting conclusions emerge from a recent study for ABA by Financial Training Resources, Inc. (FTR), a technology-oriented consulting and training firm based outside Chicago.
"Call centers are a relatively new way of delivering bank services to customers," says Anne Livingston, ABA's associate director for retail delivery systems. "This partially explains why full benefits have not been realized. But the findings also indicate that banks should rethink how they view call centers and set them up within their corporate structures."
The ABA/FT Research study analyzed the call-center experiences of 120 banks that ranged in asset size from less than $250 million to more than $50 billion. Respondents that classified themselves as "leading-edge" institutions set higher goals for call centers and got significantly better results from them than did other banks. "Leading-edge" banks were three times as likely to run their call centers as profit centers. They targeted and acheived increased sales and cross-sales, reduced live customer-service calls for routine transactions, and retained a high percentage of customers.
Banks that went for cost savings assigned their call centers to operations managers, while "leading-edge" banks tended to assign theirs to marketing managers. Cheryl O'Donoghue, vice-president and director of marketing at FTR, notes cost-oriented call centers try to keep calls as short as possible. In contrast, profit-oriented centers keep customers on the line as long as necessary to capitalize on valuable marketing opportunities. They invest in database-marketing systems and integrate calls into their workflow infrastructure. They carefully design customer-profits' screens that pop up to guide customer service representatives. Knowing that most callers decide within 20 seconds whether to listen to the rest of a sales pitch, profit-oriented centers pre-script CSR responses to key questions.
It also emerged that bank executives support profit-oriented call centers more than the cost-containing type.
Critical to Internet banking
All forms of branchless banking (via telephones and PCs) depend increasingly on call center support. That dependence is critical in Internet banking, which assumes most of the coveted, upscale, young customers, don't care if they never set foot inside a branch again. In the ABA/FTR study, nearly two of every three leading-edge banks said they plan to add Internet support for retail marketing in 1997.
When banks start getting serious about Internet banking, they will quickly discover that the Web can't close every sale and can't deliver customer satisfaction all by itself. Customers will have questions (especially about all the unfamiliar procedures), and most will need a little stroking before making major financial decisions.
Today's typical Internet banking system lets a customer send email messages to a call center from the bank's Web page. The next step, probably this year, will be setting up chat rooms, where a customer can hold a keyboard conversation with the bank's CSR or loan officer. Later it will be a videoconference, from the PC or through a modified TV set. The direction of the call center's evolution is clear.
And when banking gets there, a pleasant surprise may be waiting--cost savings. Michael McChesney, CEO of Security First Technologies, says there's potential to cut banks' call-center costs by 60%-80%. The challenge, he says, is to use Web technologies to reduce CSR intervention to a minimum while maximizing customer satisfaction.
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