February 1999

Call Centers Lead The Wave Of Banking's Future

BY DINA VANCE, FTR, INC.

Bank call centers are poised on the brink of adulthood. Having stumbled through some awkward adolescent growth spurts, they are coming face-to-face with the quintessential question: What am I going to be when I grow up?

Financial service industry professionals constantly ask me whether a bank call center can be a profit center. I can confidently report that best practices instituted by industry leaders are pointing to a resounding "yes." The long-term strategy and value-added procedures each bank chooses to put into place will determine the success of its bank call center operation.

What began as a way to have someone take service calls so personal bankers could sell without being interrupted has evolved into a microcosm where sales opportunities are recognized as a by-product of each service call. Customer relations can be strengthened with every phone contact and call center pros are well-schooled in the knowledge that Charm + Value = Opportunities.

A survey FTR, Inc. conducted jointly with the American Banking Association of its members with assets of over $250 million showed that more than 90 percent of the responding banks had, or soon planned to have, a call center. As call centers stake a claim to an ever larger share of the banking industry's profile, three trends are emerging:

• Call center as a science,
• Call center as a profit center,
• Call center as an electronic hub.

The Call Center As A Science
From a purely scientific point of view, the bank call center is a perfect laboratory. It is a delivery channel that can be quantified to the nth degree. The call center can drive its outcome, measuring anything it might like to measure in its controlled environment, although two components are considered key: productivity and quality. Industry leaders are zeroing in on customer satisfaction with an increasing emphasis on quality over quantity phone contacts.

Productivity quotas drove the early call centers with a goal of 80 percent of calls being answered in 20 seconds. Today's focus on customer service has seen a shift to a 60-40 split on quality versus productivity. Call center monitoring standards for both quality and productivity are established and published and employees are clear on what points are being evaluated.

In the FTR/ABA study, Bill Durr, senior manager of field marketing for Rockwell International Corporation, noted, "The point of quality monitoring is to develop a numerical score for quality that can be used along with any of the available productivity metrics. The combination of productivity and quality scores permits us to identify agents in greatest need of scarce coaching and retraining resources.

"More and more agents are aware of what is being measured and what is not," Durr added. "The call center represents a very invisible world. As managers, we perceive what is happening through indirect means * electronic data. That is why real-time and historical data rich in depth, content and abundance are so important."

The Call Center As A Profit Center
Call centers will evolve into profit centers as the sophistication level of their customer interaction increases along with the customer comfort level in dealing with the technology that drives the call center. There will always be a return on the initial investment of setting up the call center because it is a win-win situation for a bank: A call center is easy to set up and beats bricks and mortar on recovery costs. The larger goal of evolving into a profit center is realized when employees know which customers to target, which services to sell and how to match the two.

As a case in point, "customer-focused direct banking," as it is known at Canada Trust, won swift acceptance from its customers, Brian Hornung, vice president of Direct Banking, observed in the FTR/ABA report.

"They're comfortable with the 'technology' of the telephone. The megatrend will be connection through the network world via the Internet and Intranets," he said. "Companies will build their capabilities in these areas so that they can open up their product suites to their customers. It's like pulling back the curtains of their internal systems so customers can self-select the conversations they want to have with you and the products and services they want most."

The Call Center As An Electronic Hub
Concurrently, today's lifestyles are driving the call center to become an electronic hub. The formula for success is to offer quicker, easier consumer access that reflects our global economy and the pace at which people conduct business. Our sophisticated consumers routinely conduct business over the phone, PC and Internet. Their comfort level is reinforced by the volume of other business being conducted in a similar manner.

All delivery channels flow through the call center, and future alternative delivery channels are waiting in the wings to be tapped by the imaginations and demands of bank consumers. The challenge for a call center will be to manage the skills you need to satisfy customers at different levels of technological sophistication.

"Customers will choose how they want to communicate with us -- via telephone, Internet, video -- and we will have to offer customers these choices if we want to keep and expand their business," Mark Coble, call center director, First Citizens Bank and Trust Company, noted in the FTR/ABA study.

"I believe the biggest challenge we'll face as we move toward becoming customer contact centers will be effectively integrating people and technology together. Call center employees will not be able to help the bank leverage its technology investment unless they know how to use it. Clearly, training will play a pivotal role. Even with all the advances in technology, when it comes right down to it, it's the caliber of your employees that will determine your center's success. Some things will never change," he said.

The Critical Link: People
Which brings us to the critical link between the customer and the technological tools that channel them into the call center: people. Hiring, training, managing, motivating, retaining and promoting employees, along with creating a talented pool of experienced managers, cannot be achieved by flipping a switch. Banks need to realize they set the stage for success or failure with the people they hire, retain and promote.

With a 39 percent turnover rate in the industry, 95 percent of bank call center managers say their number-one concern is holding onto their best employees. Careful selection of workers who understand the expectations of their jobs, proper training with opportunities for growth and skillful management are keys to keeping people satisfied on the job.

Roger DuBois, senior vice president of National Financial Services Center, PNC Bank, reported the key to his call center success: "Communication, communication, communication. You can't communicate to people enough," he said.

In the FTR/ABA study, DuBois reported meeting weekly with first-line supervisors, every two months with all call center employees and sending an internal newsletter in the months that formal meetings were not scheduled. In addition, he relies on e-mail to communicate with employees every day.

Communication extends to training issues as well. "Let's say we're rolling out a new version of our technology. We communicate the necessary training to our 80 first-line supervisors, who in turn educate the consultants. It's the "train the trainer" approach and it is very effective for us," DuBois said.

Product information must be taught and updated on a regular basis, and customer database knowledge is essential. Keeping in mind that the call center is a great science laboratory, it is easy to pinpoint call behavior problem areas because they can be identified through monitoring and managed with constructive feedback. If necessary, additional training can be recommended.

Continuing Education Helps Hold The Edge
Continuing education is critical to staff development and for holding the edge when it comes to delivering customer services. It also increases the likelihood of retaining employees because they have advancement goals for which to aim. Banks now hire more staff with prior work experience and college degrees. There is also a trend toward providing some staff with commissions.

One efficacy tool coming into greater use is skills-based routing, which creates banks of people who are product/question-specific versus generalists. Questions are routed to the specialists via initial choices made by customers when they call in and first encounter the VRU (voice response unit) system.

For those employees who elect a call center career path, certification levels are being established by many industry leaders. The use of multimedia tutorials to foster continuing education has risen in popularity. These tutorials are self-directed and can be mastered in "down times," which saves the costs of replacing personnel during longer training sessions. Individuals using these tools must "test out" of levels to move on. Banks have found these particularly useful when introducing new products.

The nurturing of management candidates is one area that continues to present a challenge. When it comes to being a successful call center manager, the ability to communicate feedback -- basic, regular and frequent -- to employees is one of the most critical skills. Unfortunately, this is the one area in which the managers are least schooled. They often have no idea how to sit down with people and go over the results of monitored calls with corrections and suggestions for improvements. There is a "discomfort" level among managers when providing feedback because so many of them have been drawn right from the pool themselves and find it difficult to review their peers.

Managers face additional challenges in the form of short-term distractions that can blind them to the big picture. They are often forced to focus on issues such as employee stress, being short-handed and unfamiliarity with new equipment or insufficient product knowledge. And of course this is all played out before a backdrop of telephones that never stop ringing.

Last, but not least, experts believe the call center must have support from senior management to fully realize its possibilities. "Make sure you and the call center are sponsored by a very high-ranking executive in the bank," PNC's DuBois advises.

"I wouldn't want to run a call center that wasn't supported by the chairman of the board. You need top management support or the initiative will fail. Without top management support, the call center may not be viewed as a strategic distribution channel integral to the bank's success."

Senior management would best serve itself by taking a cue from customers when it comes to the untapped potential of call centers. Brian Hornung summed up the growth to come when he observed, "In five to ten years, it is quite conceivable that fully half of the profits of a company like Canada Trust could come from relationships developed through direct banking or another alternative distribution channel that is anything but traditional bricks and mortar. What will drive the change more than anything else will be our customers."

Dina Vance is one of the financial service industry's leading experts in call center operations and implementation at all levels of banking, from on-site call center training and marketing to in-house calling and outsourcing. She is a frequent speaker on the topic and has authored numerous articles published in periodicals such as Consumer Lending Review, Cross-Sales Report and Microbanker.

Observations and statistics referred to in this article are drawn from a joint study published by FTR and the American Banking Association entitled, A Focus On Management Strategies And Best Practices, The Evolution of Bank Call Centers. Questions about the research report should be referred to Cheryl O'Donoghue, FTR's vice president of business development and strategic marketing.

Founded in 1962, FTR provides the financial community with innovative sales and sales leadership training, consulting and resources to integrate technology into sales and customer service processes. With a global client base, its expertise covers the areas of retail banking, business banking, call centers, investments, trust and private banking, sales automation and sales technology support. For more information, call 630-620-6090 or visit www.ftrinc.com.

BY DREW KNOWLAND, HAMMER TECHNOLOGIES

First Union Corporation, headquartered in Charlotte, North Carolina, is the sixth largest banking company in the nation. A technology-oriented bank, First Union relies on a network of 12 major call centers and over 120 IVR systems to provide services to more than 16 million customers. The bank's IVR systems allow customers to directly access account information over the telephone or to transfer out and speak with one of the bank's personal service representatives (PSRs).

Because a significant percentage of customer transactions are handled by the bank's IVR systems, First Union places an extremely high premium on IVR system uptime. To ensure that these systems are functioning properly, the bank's IVR support group began a testing program.

Initially, the bank's testing program was manual. Cheryl Perry, support manager for First Union's IVR support group said, "My staff spent hours and hours a day just making test calls to the VRUs. All we could do was try to stay ahead of any system failures by randomly calling units and see if we encountered any problems."

More often than not, when problems did occur, Perry's group heard about them from the besieged call centers, whose volume of calls would spike if the IVRs failed to do their jobs. The call centers were Perry's first-line customers, and it was a serious matter when the PSRs had to jump in and assist customers with simple transactions - like account balances, transfers and bill paying - that the IVRs were designed to handle.

Perry knew she needed an automated testing solution to monitor and troubleshoot the VRUs if they were going to succeed in maintaining the bank's standards for customer service. "We have a very high standard for uptime for our VRUs. In our business, minutes cost money. Downtime translates to delayed transactions, higher operational costs, and sometimes lost business. Uptime is a competitive advantage - recently one of our competitors was down for three days. We won't tolerate even two minutes of downtime."

To automate testing of the bank's IVRs, Perry implemented CTI test systems. The automated test systems provide daily monitoring of the bank's IVR systems by generating a test call to each IVR every 15 minutes. These test calls duplicate the actions of real customers and measure system availability and response time, including network connections and host database connections. If problems are found, the test systems immediately notify the support group so that corrective actions can be taken to fix the problem.

"With our automated test systems polling every IVR unit every 15 minutes, we invariably find the problems before the situation escalates. Just as important, we can fix problems more quickly now. It used to take between 30 to 45 minutes to figure out which IVR was the problem in a given location," Perry said. "Now, with automated testing, it takes less than five minutes to pinpoint the defective unit and we can switch in a redundant IVR."

The IVR support group is also using automated testing to load test the bank's call center CTI installations before they go online. The test systems generate a high volume of calls that simulate a customer's entry of account information into an IVR and then zero out to a PSR. The test systems play a recorded message prompting the PSR to verify that a screen pop from the CTI system occurred by pressing one if a screen pop occurred and two if it didn't. If problems are found, automated testing helps the bank's technical team pinpoint the source of the problems more quickly.

Perry's group is also using automated testing to stress test new IVR hardware, new applications, network connections and script changes before they go into production. "We spend about 10 days a month doing nothing but testing new sites, new hardware and new or revised scripts," Perry said. "Because of what we've found, we've been able to redesign applications that didn't perform correctly under load; we've redesigned wide area network facilities for more bandwidth so that customers would not end up getting busy signals. Needless to say, we've also found defective VRUs before they went live, and fixed that hardware as well."

Automated testing has improved uptime on the bank's IVRs, which has not only saved the bank money, but generated revenue as well. Automated testing has also freed up the IVR support group's time so they can provide more services to the call centers.

Drew Knowland is the director of Call Center Marketing at Hammer Technologies, which provides automated CTI test solutions, including the system implemented for First Union, for the telecommunications industry. Hammer test systems are used by call centers for in-service monitoring, load and stress testing of new installations and regression testing of system and network changes.