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Financial Darwinism why financial call centers have failed to deliver

The Promise

Many years ago, the banking industry introduced the call center channel with the goal of lowering service costs and improving the overall customer experience. The plan was essentially to eliminate basic, low value transactions from the traditional banking branches banking, which would allow branch workers to focus on higher revenue-generating activities, while also providing customer service access around the clock.

However, even as large numbers of transactions were switched to call centers, the banks did not experience the anticipated reduction in transaction costs. In fact, as a result of customers having easy access to the call centers, the number of transactions surged, which in effect just created yet another channel with high ongoing cost management and poor customer experience. Let’s take a look:

Lack of Call Center Efficiency

The starting point for call center efficiency and lowering operating costs is to reduce the overall volume of calls. In fact, just a 5 to 10% reduction in call volume can save up to $10 million annually. However, instead many banks created a self-perpetuating cycle where 50 to 60% of the inbound calls were driven by their own errors stemming from customer-focused processes that were poorly structured and insufficient channel integration that limited the sharing of data. This resulted in many preventable service inquiries and repeat calls, which occur when the customer can’t easily find the information they need or is not attended to sufficiently the first time around, all of which negatively affected the customer experience as well.

In fact, a survey by American Express reported that in order to provide consumers with an excellent customer service experience, representatives must be able to provide a satisfactory answer to their question’ (86%) or be able to connect them with someone who is knowledgeable (78%). In other words, customers believe the most important attribute of a successful customer service professional is efficiency, i.e. the ability to answer questions or handle transactions quickly. Over the years, however, many bank customer service agents were not able to do this, due to a lack of proper training, together with being forced to rely on those same poorly functioning processes and channel integration, so agents were often forced to rely on the “go-to” product experts in their department. In fact, according to SilverCloud, 63% of subject matter experts and managers at banks spend more than 1/3 of their day answering front line questions with many spending more than 40%!

This has also led to a situation where unnecessary transfers and escalated calls have spiraled out of control. At the same time, the customer has also suffered from the lack of customer service competence. In fact, it was found that consumers themselves want to sense that customer service professionals feel empowered to effectively and autonomously do their jobs, to handle requests on their own without transfer or escalations. When employees feel confident in their ability to answer customer questions on their own, without the aid of an internal support person, their overall effectiveness and disposition with customers improves, and as a result, so does the customer’s confidence.

Lack of Self-Service Functionality

Another catalyst for the failure of the banking call centers has been the lack of self-service on-line functionality to handle all the basic customer service requests. First of all, calls handled by agents typically cost about $4 per contact, while the cost per contact online is only around: $0.10 to $0.15. Therefore, just shifting between 5 and 20% of call volume from agents to the Web would save up to $25 million per year! It’s been a badly missed opportunity for most. When an effective knowledge database is deployed on a bank’s website, repetitive customer questions, especially those that are technology related, such as “how do I reset my online banking password” are greatly reduced, which in turn frees up the customer service agents to respond to more profitable account and product inquiries.

Today, customers have evolved and are more than ever looking for ease in doing business, especially when it comes to their financial services. Now, it’s up to the banks to evolve as well or be relegated to a thing of the past.

[About the author]Dylon headshot Dylon Mills is the Director of Marketing Content Strategy & Development at Jacada. As such, Dylon’s main responsibilities are to strategize, create and deliver content for Jacada’s product portfolio that align with the global Go-To-Market strategy, corporate positioning, and marketing campaigns. Dylon’s prior work experience includes Product Management at one of the top Fortune 500 Technology companies, Symantec Corporation. Outside of work, Dylon enjoys problem-solving and any project that includes building/tinkering with tools. Dylon holds a BS Consumer Economics from the University of Georgia.