How the financial sector is moving towards the latest communication channels and how it benefits them

Out of context?

Anxious to improve customer engagement, the financial sector is now keenly embracing the latest communications channels. But mobile text, voice messaging and web chat will achieve little if they are not joined up or linked to existing business processes, warns Mark Oppermann, business director at  VoiceSageMark-Opperman

As innovative as banks and other financial services organisations consider themselves to be in their use of technology and efforts to elevate the customer experience, the reality often falls short of their intentions. Online banking may now be firmly established for example, but the majority of financial institutions have yet to work out how to integrate their web activities effectively with SMS messaging, voice and email channels.

Although the industry is anxious to retain and derive more business from existing customers, and to do this as cost-efficiently as possible, it has a tendency to invest in technology for the sake of it – rather than with a view to streamlining real business processes. Its use of text-messaging provides the best example yet. As common as it is for banks to offer some form of SMS service to customers, more often than not the channel has been added in a bid to seem more ‘relevant’ to today’s customers – rather than to solve a real problem. This is a missed opportunity given that the financial services sector is facing so many painful challenges currently.

One of these challenges is to boost customer engagement by being more responsive, and where possible proactive, in routine interactions. Online retailers have become very good at this, flitting seamlessly between the different contact channels to complete transactions, confirm and arrange next steps, and generally keep customers informed. By harnessing the optimum combination of web forms, web chat, email, SMS and voice messages for the given scenario and customer group they are able to communicate in real or near-real time with customers to complete tasks more rapidly – whether that’s to organise a product delivery or complete an account payment.

In banking and finance, many of the same business challenges exist. These include the need to nurture and keep selling back to existing customers; to convert initial enquiries or applications for new products more successfully; and to recover missed payments or address accounts that are in the red – all without pushing up operational overheads or having to send services off shore. Yet, in terms of their application of appropriate solutions, the industry seems to lag retail and other markets.

Achieving more with less: carefully-timed prompts boost collections at Clarity
In the collections industry, one organisation that has bucked the trend and harnessed technology to transformative effect is Clarity Credit Management. Since reinvigorating its customer contact strategy, the business has seen turnover grow by 200% with only a 25% increase in agent resource.

Clarity has achieved this by intervening earlier with delinquent accounts, using the right blend of automated outbound contact methods, including voice and text messaging, to prompt customers to get in touch and settle their accounts.

The company, which provides credit management services to lenders, operates in a high-pressured industry where success depends on being able to deliver maximum yield with minimum outlay. Previously it had relied on a combination of outbound letters and a dialler-driven call centre operation to contact debtors but, as the volume of work increased, Clarity found it had hit a ceiling to productivity. It was achieving only a 40% Right Person Contact (RPC) rate and, from that, a 50% success rate in settling payments.

To reverse the trend the company opted for a more proactive, multi-channel route to its customer contact activities. It now employs a mix of interactive voice messaging, text (SMS) messaging, email, web portal contact and a Pay Zone facility. Daily, proactive outbound voice and text messages are managed through a cloud-based service, on a pay-as-you-go basis, prompting customers about overdue or missed payments and encouraging them to get in touch and settle.

The new contact model has led to a visible shift in call behaviour: 65% of calls are now inbound, significantly improving collection revenue because the conversion rate to payment is much higher for inbound calls. The cost to reach the right person and the cost per pound collected per agent have dramatically reduced as a result, making the company more competitive. Outbound call costs are much lower and Clarity has achieved a four-fold increase in collections with only 25% more agent resource.
Crucially, business users can now create new automated outbound campaigns in a matter of minutes, allowing Clarity to experiment with new approaches. The company also has access to powerful analysis and reporting capabilities enabling it to further hone its activities to elicit the best possible results based on what has or hasn’t worked previously for given groups of customers. Having performance data readily available helps establish whether campaigns are meeting expectations; there is also a facility to drill down into more detail about which calls to which customers through which channels and at which times are hitting the target or not. Competitively the capability is a strong differentiator, Clarity notes.

Honing winning formulae
Having clear metrics is undoubtedly a significant aid to refining customer contact performance. Humans are awkward at the best of times and people are becoming increasingly precious about their time and how and when they are contacted. Now more than ever it is customers who are dictating which channels they use when interacting with companies, something that can change too for an individual depending on the type of contact, the time of day and other variables.

Unfortunately many organisations, especially in the financial services sector, have yet to merge their customer contact activities so that interactions can flow from one channel to another with complete continuity. It is common, still, to have 4-5 different departments looking after some form of customer contact. Indeed, a recent CCA survey found that 77% of UK organisations still manage their customer contact channels in silos.

Getting closer to customers and being able to deal with them on their terms means being able to manage every customer from a single central point, across any channel. Only then can organisations hope to enhance the customer experience and create the right conditions for a favourable response to whatever they want them to do – and to get them to this point via the shortest and most efficient route each time.

The smaller the agent resource that needs to be allocated to chasing routine transactions, the more creative organisations can become, allocating staff to more complex and ambitious activities that drive additional revenue.

Flexibility matters here too, of course. If contact solutions are agile and scalable enough, they can be used to support further experimentation – but at minimal cost to the business. In these desperate times it will be the banks and financial service providers that can innovate at low risk that will succeed at differentiating their services and commanding new success – provided that any experimentation is driven by a genuine business strategy and backed by real performance metrics.

It is not enough simply to buy the latest technology and tick a box. Application is everything.