The Changing World of Call Centers

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• Announcements

“One-And-Done” is the new expectation.

Re-thinking everything. In today’s multichannel, no omni-channel world, the call center is in the midst of a transformation.  The transformation is comprehensive and involves rethinking performance metrics, staffing issues, and work space. In the area of performance metrics, financial institutions (FIs) are recalibrating to better align in a omni-channel world.  No longer can institutions look at just average talk time, abandonment rates, and after-call processing.  The call center agent is now responding to customers through several channels – telephone, social media, instant messaging, and live Web chats…to name a few.

Agents are now the FI’s ambassador, information officer, and mediator.  A key performance metric that has evolved in call centers is “one and done” as described by Jennifer Fox, SVP Customer Care & Operation Manager for Associated Bank in Green Bay, Wisconsin.  This philosophy empowers the agent to resolve a customer’s issue in one call.  This philosophy lends itself well to the new instant-gratification generation of customers who are reaching out to the FI as part of their busy schedule.

Higher expectations. As this example illustrates, the traditional metrics for the call center must be revisited. Customer expectations in our omni-channel world have changed.  Further, the call center employee must be “smarter” than ever.  Their knowledge base and training must allow them to meet the customer’s expectations of a “one and done” experience.

The emergence of ITMs. Organizationally, call centers are being transformed by the introduction of Interactive Teller Machines (ITMs) as a service distribution channel.  ITMs bring the dynamics of retail transactions, once isolated to retail branches, into the call center.  The ITM requires both visual and audio communication with the customer, amplifying the emphasis on personal service.  This dynamic requires financial institutions to rethink the hiring, training, and staffing models for the call center.

They’re not just agents. They’re your new brand ambassadors. Today’s agent needs to be comfortable conducting video sessions, and maintaining eye contact with the customer.   For FIs with geographically diverse networks, agents must be able to relate to the various needs of their customers. This includes the diversity of products that may be associated with various regions and demographies.  In most cases, agents need to be empowered to resolve the customer’s issues in keeping with “one and done”. Beyond the staffing issues, the physical environment also needs to be addressed.  Agents for the ITMs need to be isolated within the call center space to eliminate background noise, including visual background activity.

Design should be people-first. Because ITMs often operate during non-traditional hours, the space needs to include access to the restrooms, break rooms, and points of ingress/egress without violating other security zones in the facility (like the branch).  The non-traditional hours also require safety considerations regarding ingress/egress into the facility.   These are important steps when designing a new facility to house a call center and doubly important when retrofitting a call center in an existing space.

An investment that can pay off. Great results can be achieved by providing ITM agents with the resources and space required to meet customer needs and serve their clients while keeping with the “one and done” attitude.  One Southeast FI embraced the omni-channel approach and weaved it’s online banking, ITMs, and call center into a cohesive strategy. Over a three-year period, its revised approach generated 1,400 new accounts and $140 million in new deposits.

The stool of success. So in pulling all this together, the three-legged stool of the Call Center in an omni-channel world includes:

1. Smarter Support: Agents must have at their fingertips a knowledge base that provides them the ability to deal with the majority of customer requests.  This knowledge base consists of product information, empowerment guidelines to resolve customer issues, and a decision tree for dispute resolution beyond their authority.  All of this geared to the “one and done” philosophy.
2. Personalized Service: This concept connects the knowledge base with the agent’s ability to customize services or products to fit the customer’s request. Agents must be able to interact with the customer to determine his/her true needs elevating the agent’s role beyond that of an order-taker.
3. Faster Connect and Up Time: This addresses the infrastructure of the call center.  The goal is to ensure the center is able to operate even if there are power outages or systems issues.   Continuous system monitoring insures the center can absorb a sudden spike in activity.  The worst thing for a customer is the inability to reach the contact center in a timely manner.

A call center’s ability to attain these three legs will enhance its effectiveness, and better equip agents to serve customers through its channels, leveraging the “one and done” concept, which has become the customer’s expectation!

The call center isn’t just another channel in your strategy. It can be a true differentiator. For good or bad!

This is the 2nd post in a multi-week series addressing the main office  and it’s transformation. We started our quest with How Loan Growth Ripples Through the Main Office.

Loan Growth | 7 Ripples Through Your Main Office

Categories:

• Announcements

Growth means we have to plan for today and position for tomorrow.

Riding the Loan Growth Wave. Earlier this week, the FDIC reported that banks had a blockbuster second quarter. The nation’s 6,058 FDIC banks earned $43.6 billion in the second quarter, up from $39 billion in the first – a 1.4% rise in net income. These earnings were fueled by over $182 billion new loans, compared to $100 billion in the first quarter.

Furthermore, Callahan & Associates is reporting loan growth for credit unions is also on a run. In fact, credit unions are riding an 8 quarter wave – resulting in double-digit annual loan growth the last two years.  For banks and credit unions, this is great news, allowing many to thrive.

Today and Tomorrow. However, with growth comes challenges. Challenges for today and tomorrow. For today, FIs are challenged with servicing and processing this business. For tomorrow, they have to position for future growth, as well as outpace and out-position the competition all while serving an ever-evolving customer base.

Main Office Transformation

This post is the first of a multi-week series on Main Office Transformation. This series will address how Banks and Credit Unions can deal with all the components of transforming their main office to thrive today…and tomorrow. To begin, let’s consider the ripple effect of loan growth on the institution.  These ripples touch on the areas where loan growth exerts pressure, creating the need for a strategy to deal with the pressure. For each component below, the FI must address:

• Scalability – How do we provision for the future?
• Flexibility – How do we build-in the ability to change?
• Proximity – How does the Bank or Credit Union engrain its culture across the departments?

Ripples, Pressure and Waves – Oh My!

1. Lending Department – This is the most obvious and intuitive area where loan growth exerts pressure. After all, it’s their fault we have all these loans!! On a serious note, increasing loan volume puts increasing pressure on the department.  The entire sequence of activity – originating, underwriting, processing, closing, packaging and selling – must scale with loan volume.  A variety of organizational structures and processes define how a new loan moves through the institution.  All along the way, the people and technologies that touch the loan must be accommodated.
2. Loan Servicing – Once the loan is closed, then servicing activity begins. While this is a “given,” it is also an activity distinct from the loan originating/underwriting function. Loan servicing can be greatly impacted by technology, promoting efficiency, it is also subject to the cyclical fluctuations in the lending market.  Hence, scalability and flexibility become important features in planning.  Depending on the company’s operating philosophy, locating it in close proximity to the Lending Department may also be desirable.  Proximity can help build and sustain a cohesive lending culture and can provide a form of feedback to originators and underwriters.
3. Collections – The “inconvenient truth” about lending is that sometimes loans don’t perform as planned. The Collections Department must step in and manage the process of getting the loan back on track, or recovering the collateral.  As with the upstream lending functions, requirements for collectors rise and fall with the economic cycle.  Further, their requirements for staff and space are influenced by the company’s underwriting philosophy.  Some FIs chose looser underwriting standards to accommodate higher rates for higher risk, and understand that higher delinquencies are a natural consequence of that decision.  More conservative FIs choose higher underwriting standards, and argue that lower loan yields are mitigated by the decreased costs of collections (staff and space).
4. Contact Center – The Contact Center may be tied to the Servicing function mentioned above, or may operate independently. In either case, increasing loan volume will boost the requirement for customer communication.  Intuitively, this is manifest in cases of customers calling/emailing/texting/chatting with the FI to address routine or unusual questions about their loans.  A second aspect to the Contact Center is outbound sales. (We’ll talk more about this next week.)  As part of the onboarding process, particularly with indirect loans, this may mean periodic calls/emails/texts to the customer to make them aware of additional products and services that would benefit their financial lives.  Scalability is an ingrained factor here, assuming that the Contact Center also fields customer inquiries on a broad range of topics, not just lending.  Privacy is often a concern in planning for this function as undue background noise can distract from the conversation, diminishing the FI’s professionalism and tarnishing the brand.
5. Compliance – Increasing loan volume increases the burden for Compliance. However, strong policies and procedures that are consistently followed can reduce the need for greatly expanded staffs to handle these chores.
6. Marketing – Success breeds success, new loans create the opportunity for add-on sales and subsequent customer development. Marketing is directly involved in this activity, although the impact of increased lending is usually not linear in terms of pressure on staff and space.
7. Accounting – Of course, someone has to keep track of all the dollars and cents flowing through the organization. And, hopefully, the new loans are generating plenty of dollars and cents. As with Marketing, Accounting is an area where the increased volume has a minimal impact on staff requirements.

Plan to ride the waves

The planning process to address the effects of growth is straightforward in concept, although there are some details that are critically important.  At a high-level the process goes something like this (as mentioned earlier we’ll dive deeper in these categories in the coming weeks.):

1. Forecasting – Using the FI’s best crystal ball, the organization needs to forecast and project where it will be over a 5 to 10-year horizon in terms of loan growth. This usually leads to a healthy discussion of portfolio mix, products that should be added, products that should be deleted, participations, commercial/consumer mix, etc.  Sober thinking is required.  The temptation to “aim for the moon” will result in overestimating requirements, if the results are not achieved.  Conversely, sandbagging makes achieving desired results easier, but tends to understate future space requirements.  As a result, the FI may find itself on a treadmill, constantly trying to add resources, and space – losing efficiency and profit as a result.
2. Calibrate – Most of the functions mentioned above can be calibrated. The exercise at this point is to establish benchmarks, and calibrate each function based on the loan growth projection.  Questions naturally arising during this activity include insourcing/outsourcing functions, changes in technology, and changes in organization or operational processes.  The end result of this effort should be a staffing model forecasted in conjunction with the loan projection.
3. Allocate – Once the staffing model is in place space can be allocated for each function, based on the calibrated personnel forecast. In this phase, the common functions also have to be considered – file rooms, conference rooms, break rooms, etc.  Combined with the staffing model, the space allocation yields the planning requirements for the functions impacted by growth.
4. Program and Plan – In concert with design-build professionals, the company’s representatives will develop the program i.e. the instructions to the design-build team that ultimately defines the facility that will support the staff.

Connecting the Ripples. Most FIs welcome the ripple effects of loan growth on their main office because it allows the company to continue providing its value proposition to the community, customers, and stakeholders. However, addressing the growth takes a steady hand, and a team to get it right. In the coming weeks we will address this process to help you along your way.

Addressing the pressure of loan growth on the main office positions a Bank or Credit Union for success today and tomorrow.

Much of this change is in the call center. What does today call center do that yesterday’s did not? Read more below.