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Retail financial services providers have always had to
balance customer service on one hand with cost control on the other. Solutions
to maintain or even improve customer service, while reducing costs, are manna
from heaven for the sector’s senior executives. A prime example can be found
with ATM machines. Treated with suspicion upon their introduction as a tool to
cut costs at the expense of customer service, few of us today would be without
the convenience of these time-saving machines spread throughout the urban
landscape. For the institutions that run them, the savings compared with human
tellers are counted in the millions.
Call Centres
Auto-resolution applies in situations where institutions
need to reach customers to provide them with important and time-sensitive
information to which, most importantly, a response is required in order that a
particular issue can be resolved or an appropriate action taken. Normally, such
situations require someone at the institution to get in touch with each customer
to collect the response, usually through a call centre. Shifting these
interactions away from the branch and into centralised operations has led to a
huge expansion in call centres over recent years. A report from the UK’s
Department of Trade and Industry (DTI) showed sector growth of 250% since 1995.
Today’s larger banks have call centres with hundreds, even thousands of seats
and, vital though these are to the business, there is unremitting pressure to
minimise their cost.
Technology has been introduced to make call centres as
efficient as possible. Auto-diallers ensure that the maximum possible time is
spent actually talking to customers, dialogues are carefully scripted and
presented on display screens to keep calls quick and effective. What such
things cannot address however is the greatest cost of all – staff. With as much
as 80% of the expense of a typical call centre operation attributable to its
human element, finding ways to trim this has led to a call centre industry that
is often maligned for its treatment of workers. Low pay and high turnover are
routine problems.
Offshoring
The situation has given rise to the rapidly expanding
offshoring sector. The same DTI report found that moving work to India saved up
to 40% in operating costs, mainly because pay is just 10-15% of UK wages. The
supposition (and assurance from outsourcing providers) is that staff abroad will
be able to do precisely the same job as those back home. This entirely
overlooks local differences in knowledge, culture and customs. Things that are
taken for granted in the UK can require thousands of man hours in training.
Stories abound of Indian call centre staff being given names like ‘Julie’ and
‘Fred’, told of the delights of baked beans and forced to watch EastEnders! It
sounds like nonsense, but speaking to someone that understands how much of a
crisis it is when your phone has been off for three hours or when the mortgage
payment hasn’t gone through is vital, yet these are not problems most Indians
would comprehend.
Lack of flexibility in overseas operations presents more
difficulties. Indeed, many of the staffing issues which make call centre
management tricky in the UK – peaks and troughs in demand, trouble with rapid
script changes, high staff turnover – all translate frustratingly well.
Developing nations often have limited data protection legislation, political
instability, telecommunications that are relatively unreliable and inadequate
transport services. Moreover, the DTI’s report found that UK consumers had a
negative attitude towards offshoring, with a significant minority deliberately
withdrawing their custom from firms which had switched work overseas. In the
United States the reaction has been even stronger, with outsourcing of jobs
becoming a major political issue.
To create greater efficiency within their home-based call
centres, some banks have attempted greater automation by using voice alerting
systems to deliver pre-recorded information via a phone call. This type of
alert has significant speed advantages over printed media and reaches customers
without requiring them to initiate any action themselves, such as checking
email. Unfortunately, the approach struggles to save money due to the cost of
running the system combined with increased call rates when customers respond and
telephone back to the call centre with a reply or query. Auto-resolution
technology presents institutions with a two-way alerting solution that is
sophisticated enough to present a genuine alternative to outsourcing. Rather
than simply automating message delivery to customers, the system completes the
entire process from identification of the customer right through to capturing
their response and updating appropriate computerised records.
Auto-resolution
Typical auto-resolution applications consist of the
following:
Trigger Event
Based on parameters set by the financial institution,
such as days past due, outstanding balance due, high potential for fraud score,
or days from receipt of new card. The capability for triggering usually resides
within a bank’s existing application infrastructure.
Voice Alert Generation
Based upon customer preferences maintained in the bank’s
existing application infrastructure. Institutions can also gather email and
text messaging details to take advantage of the full range of possible contact
options.
Delivery
A call or contact strategy based on the institution’s
policies or business practices. It can provide for different devices and deliver
escalating sequences, for example home phone and then mobile, email and then
text message, etc.
Presentation of response
options
Scripting options provide users with menu choices such as
the ability to automatically confirm identity, make a payment, verify
information or connect to a live agent. The pre-recorded nature of the call
means 100% consistency of tone and style, which helps ensure compliance within
the highly regulated financial environment, something that can be difficult to
ensure with human callers.
Back-end system iIntegration
Contact results are sent back to the institution’s
system, either as a separate results file or seamlessly integrated with existing
databases and reporting systems such that auto-resolved cases need no further
action.
On-line reporting
The result of each attempt, including both contacts and
non-contacts, is captured in a secure online reporting system. Standard
reporting includes daily and monthly summary views of contact programmes as well
as individual level detail.
Business intelligence
Results of various contact strategies, data quality
issues, customer reactions and interaction data captured are analysed by
Adeptra’s account management team and presented to each client on a monthly
basis.
Controlling fraud
One of the most popular applications for auto-resolution
technology is transaction verification to help prevent and limit fraud. In the
year to July 2004, the Association of Payment Clearing Services (APACS) reported
that payment card fraud had risen by nearly a fifth on the previous year to a
high of £478.8 million. The growth in card fraud has meant it has long been
standard practice for banks to monitor card transactions using specialist
software that highlights suspicious behaviour. Once a transaction has been
singled out, the bank needs to ascertain whether it is in fact fraudulent by
getting in touch with the cardholder and asking them if they recognise the
transaction. Speed is crucial, because the sooner fraudulent use of a card can
be stopped, the less money is likely to be lost. The problem comes with the
physical limit to the number of calls that can be placed using a staffed call
centre. This means only those transactions given the highest probability of
being fraudulent can routinely be dealt with. The rest have to be passed over,
the onus then being with the cardholder to examine their statement. The
effectively unlimited capacity of auto-resolution makes it ideal for transaction
verification, as can be seen in the following scenario.
Anti-fraud alerts reach many more cardholders and much
more quickly than call centre operations. This results in cost savings due to
the smaller number of staff required and, more importantly, from catching a
greater level of fraud sooner in its cycle. Banks employing the technology have
consistently reported return on investment (ROI), including payback of the
initial start-up expense, within two months of commencing production.
Other applications
In addition to anti-fraud transaction verification, other
instances of bank-customer communication that make effective auto-resolution
applications include card activation, opt-in marketing and collection of overdue
payments. There will always be the need for human agents to handle more complex
queries, but by filtering off the more straightforward interactions,
institutions can develop a leaner, more focused call centre service that is more
effective in providing a high quality service. Indeed, as any call centre
manager will attest, in a typical operation one third of the staff will be good,
another acceptable and the last gives problems. The cost per call with
auto-resolution is a fraction of what it would be with a conventional call
centre, and unlike human agents the system needs no holidays, is never sick or
late for work, can be reprogrammed without training, and can adjust its output
in an instant according to demand. Even when retaining the best staff to handle
those interactions which cannot be automated, auto-resolution can still reduce
total costs by 50%.
Auto-resolution is ideal for the frequent, repeated
interactions that occupy most of call centre time and for many institutions the
savings that result would make it entirely possible to avoid offshoring as a
cost saving measure. Although still in its early stages of adoption, the number
introducing the technology is growing rapidly. Seven of the top ten retail banks
in the US and five of the top ten in the UK have deployed auto-resolution
applications from Adeptra, and more are using similar technologies from
competitors. My prediction is that, as with the ubiquity of ATM machines today,
tomorrow will see automated voice communications become an everyday way for
consumers to interact with and gain services from their banks, credit card
providers, insurers and other financial services providers.
Phil Wilson is CEO of
communications solutions specialists Adeptra
Source:
Getting Paid
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