Customer Service

EXPERT ADVICE

Meltdown to Breakout: Financial Services Overhaul Customer Service

Who would have thought the meltdown in financial services could fuel the overhaul of the industry’s customer service departments? Actually, it’s just one of several factors driving companies to put customer service initiatives on the fast track in pursuit of compelling business advantage.

The subprime mortgage crisis is changing the face of many financial services organizations, where stock prices are dropping and competitive pressures are surging. For these companies — and the rest of the industry — customer service improvements hold the promise of competitive differentiation and customer retention.

Now, the challenge is how to finance those improvements when the state of the market dictates cutting costs, not increasing them. The challenge is amplified by the state of IT in most financial services companies. For many, Y2K projects were the last technology update. These IT departments are trying to wring more value out of technology that’s eight to 10 years old.

Moving customer service offshore is no longer an option. Companies have either done it or read the horror stories of competitors that have. Bottom line, most companies lose customers when they outsource customer service and retention. The money saved is outweighed by the costs of customer defections.

To deliver superior customer service that builds customer loyalty and provides a competitive edge, most financial services companies will turn to call center and contact center technologies. Of course, technology can be implemented several ways, some more efficient and cost-effective than others.

Customer Service Overhaul

One technology option is to stick with the current hardware vendor and upgrade an existing premises-based, contact center system. Incumbent technology providers may be able to improve the customer service experience, but they typically do so with a whole new set of costly hardware and software. Additionally, customer services processes often need to be re-engineered, the implementation can take 12 to 18 months, and upgrade costs can climb to US$10,000 per agent. Companies that have grown through merger and acquisition will incur these costs at each of their contact centers.

The second option is to select a new hardware technology vendor. Besides the cost and time issues above, selecting a new vendor means implementing new contact center technology. Most financial services companies have eliminated the highly skilled technical staff needed to implement the new solution. Hiring people can top $200,000 per person per year, adding 20 to 30 percent to the overall systems’ cost. And some of those people will need to stay on to support the system.

A number of financial services firms have had customer service initiatives on their priority lists for the last five years. However, management shoots down the projects when they learn that it can take 12 to 18 months to see any benefit and that it requires human resources they don’t have. Capacity planning is another concern. When companies buy a premises system, they buy all their capacity at once. A company that anticipates growing to 400 agents has to buy capacity for 400 agents, even if it currently has only 200 agents.

The Perfect Host

The third technology option for overhauling a customer service department is the hosted contact center, which provides on-demand contact center services — with technology and often personnel off site. Although some companies still bristle at the thought of moving customer data outside their firewalls, the growing adoption of other Software as a Service (SaaS) solutions is mitigating those concerns and fueling the growth of hosted services alternatives. Meanwhile, the hosted solution offers a number of advantages:

  • Flexibility. Companies buy only the capacity they need, when they need it. Customer service staff can scale up to handle business or seasonal spikes and scale back during lulls. Moreover, the system can unite agents across the globe to present a unified customer service force.
  • Rapid deployment. A hosted solution can be up and running in 90 days or less — fully integrated with the company’s existing customer contact applications and voice or data technologies.
  • Advanced features. Companies have immediate access to state of the art features as soon as those features are implemented by the service provider — no need to ever update software on company or client servers.

By eliminating the need to buy, manage and maintain hardware, software, and the associated staffing requirements, hosted contact centers can resolve seemingly intractable customer service challenges. For example, customers at Provident Bank of New Jersey waited on hold four to eight minutes only to spend up to four more minutes talking to a customer service agent. Worse, customers could be transferred to several agents before reaching an agent that had the background or tools to help them.

To address the situation, Provident planned to add 15 agents to the 50 agents already in its contact center. The hitch? The technology running the bank’s contact center could not support 15 more agents.

Provident had to improve customer service by making its existing 50 agents more efficient and effective. Using a hosted contact center, Provident now routes each incoming customer call — based on the customer’s phone number — to the appropriate agent. Key customer information is also routed to the agent and displayed on screen as soon as the agent takes the call.

As a result, Provident is answering 80 percent of its calls within 20 seconds. Better, the bank routes each customer call to the most appropriate agent, so more customer inquiries are being resolved on the first call. And most importantly, customers are getting better service even though they’re spending less time — one minute, on average — talking to agents.

Prepare for Breakout

Of course, there are other advantages to using a hosted contact center service. The SaaS advantage of turning a capital expense into an operating expense eliminates a significant upfront investment. The technology advantage of Voice over IP supports a virtual workforce that’s geographically distributed but organizationally united. The security advantage of SAS70 certification ensures adequate controls and safeguards are in place for hosting and processing customer data.

Ultimately, the core advantage of hosted contact center services is providing better customer service that can be quickly implemented without adding more staff. Now more than ever, customers want better service. They want fast access to real, knowledgeable people. Financial services companies that can get their customers to the right agent right away, are gaining an edge on the competition and expanding their base of loyal customers.


Vincent Deschamps is chief executive officer and chairman of the board for Echopass, which offers on-demand, hosted contact center solutions. He can be reached at [email protected].


1 Comment

  • The inherent value of hosted CRM applications is finally becoming obvious to financial services providers! The "hard" value of an inbound customer contact attempt is incalculable. Who is more valuable than someone looking to communicate with you about your product or service? More importantly, perhaps, what source of contacts is more "seeded" with revenue?

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