Talking in a Digital World


Customer contact centers are reshaping retail service for the technology age

By Phil Britt

Sure, call me if you want. But how about using text, instant message, Twitter or email?
Increasingly, more digitally connected consumers are saying yes to that question with their community bank. Some even assume their bank will interact with them however and whenever they want. And they’re not even thinking of calling you anymore.

For many community banks, telephone calls still generate the highest volumes of customer service interactions. But in today’s world of proliferating digital devices and communication options, customer contact centers, once operating primarily as telephone switchboards, are turning into full-service and multichannel communication hubs.

Certainly for the largest banks, contact centers are evolving into digital retail centers, managing new digital channels to handle more customer support activities previously conducted in-person at branches. But does that same retail service trend, driven by the near ubiquity of online and mobile technology, really apply to the relationship-driven model of community banks?

Several retail service experts say it will apply to your community bank, if it doesn’t already. The same customer service trend might not affect your bank on the same scale as a larger bank, and it certainly shouldn’t force your bank to change its fundamental business model. But multichannel customer contact centers are becoming—for the good or ill—a new and increasingly expected customer service standard for nearly every retail business, including community banks.

New expectations

More consumers, particularly mobile-minded younger ones, are expecting the same level of online and mobile service and support options from their bank that they receive from many of the largest retail companies they interact with. Contact centers are where more customers are going online to get a question answered, have a technical issue fixed, obtain help with a loan application or just learn more about a financial product or service. Previously dubbed “call centers” for their initial role as telephone switchboards, today’s contact centers are challenging community banks and their staff to not just manage digital inbound and outbound interactions with customers but also engage them as personably and effectively as they would inside a branch.

“It depends on if you look at where the puck is or where the puck is going to be.”
—Bob Meara, retail banking expert

Of course, community banks have built entire retail branch networks to handle those inbound and outbound customer service needs, and branches are and will continue to be a major if not central element of bank’s customer service operations, retail experts generally agree. But consumer visits to branches have been declining at a pace of 5 to 10 percent a year for all financial institutions alike, says Bob Meara, financial retail service analyst for the Celent, a Boston research and consulting firm.

A recent ICBA poll found that 16 percent of member community banks operate contact centers. However, Cornerstone Advisors Inc.—a financial services consulting firm in Scottsdale, Ariz.—recently surveyed 61 large community banks with $2 billion to $4 billion in assets and found that nearly all of them operated centralized contact centers. Even today, only 30 percent of contact center communications are for routine service, says D. Scott Andrick, director of retail banking for Pegasystems Inc., a Cambridge, Mass., company that develops software to automate customer interactions.

The decline in customer branch activity is only expected to continue, if not accelerate, as more consumers turn to their desktop computers and smartphones to handle nearly all of their personal activities, retail service consultants say. More than ever before, smartphones, mobile banking and simple Internet research enable customers to quickly find answers for their basic questions. That boon of information access will likely increase the complexity and volume of calls and inquiries directed at a bank’s customer service representatives operating in remote contact centers, retail banking experts say.

Most of the nationwide bank chains have teams of specialists manning 24-hour contact centers. Bank of America has more than a dozen employees charged with handling social media monitoring and responses. Wells Fargo has student loan specialists. Many of those contact centers handle a mix of customer service duties and functions, including servicing customer calls, handling customer emails and chat, Web banking support, call routing within the bank, sales and cross-sales, loan origination support, assistance for certain internal employee issues and customer satisfaction surveys.

Does your community bank operate a call center?

82% No

16% Yes

1% Don’t know

Source: ICBA NewsWatch Today, December 2014

Although the options for mobile banking activities are growing, right now contact center activity remains relatively flat, Meara acknowledges. However, the nature of contact center communications, he adds, is also becoming more complex as customers seek service over multiple platforms and devices. Today, consumers’ mobile banking activity goes beyond checking balances or even transferring money to include remote check deposits, bill payment, and money management. Although perhaps an extreme example, a few early-adopting banks are starting to allow customers to open accounts over smartphones, with a digital photo of a driver’s license used for identification.

What about branches?

The transactions and other business activity have left the branch, but they have not gone away, points out Kevin Blair, CEO for NewGround, a company in Chesterfield, Mo., that designs and builds facilities for community banks, including headquarters, branches and contact centers. Meanwhile, Cornerstone Advisors reports that the median number of transactions tellers processed per month declined 24 percent between 2010 and 2013. The number of transactions processed per branch dropped 14 percent over the same time period.

If this trend continues, as nearly all industry analysts expect, community banks will need to continue to review their long-term retail branching strategies as well as the roles and skills of their customer service staff. Contact centers are likely to manage remotely more customer service tasks over multiple communication channels that were traditionally handled at the branch. That will mean developing customer service employees with diverse knowledge and communication skills to handle customer support as well as customer sales over telephone, video and a variety of digital communication platforms.

Considering their current customer foot traffic and activity in their branches, community banks could continue to operate without multichannel contact centers without losing business, Meara says. “It depends on if you look at where the puck is or where the puck is going to be.”
But the trends of consumers moving toward more digital interactions will likely require more community banks, at some point, to respond to meet their needs by carefully planning and deploying multichannel contact centers, several retail banking experts suggest. Echoing what retail analysts have forecast for years, Cornerstone Advisors predicts that by 2020 most branches will be smaller, have fewer staff and be much more highly automated. Increasingly community banks have been downsizing their new and existing branches this way, with some experimenting with virtual tellers, bank concierges and sharply slimmed-down branch footprints and facilities.

Blair suggests that community banks should begin taking steps now—in thinking, planning and implementing—to serve and interact with customers over multiple digital channels through high-tech, smartly staffed contact centers. “Banks that haven’t shored up their virtual staffing are missing out on a tremendous opportunity” to better serve and engage more customers, he offers.

Considering a transition

But how might community banks begin to consider deploying contact centers that operate as fully functional electronic customer service and engagement hubs?

As a start, community banks can consider possibly expanding their contact center operations by reviewing underutilized branch personnel to handle inbound and outbound customer communications when they aren’t otherwise occupied, recommends Jim Burson, senior director for Cornerstone Advisors. As customer use of the contact center grows, community banks can plan a gradual shift of their storefront branch resources to the customer contact center as needed.

Customer contact centers are a consequential component of a broader multichannel puzzle that community banks will need to consider and respond to.

One initial, concerted step could be to move to offer more customers quick access to live staff during business hours rather than routing customers through a telephone routing system. Another would be to direct more staff to monitoring and responding to incoming digital messages, such as emails and social media posts. Hiring a third-party contact center to manage “after hour” customer inquiries could be another early step.

Such changes in staffing roles and dynamics will likely require special training to help those employees to interact effectively with customers over a variety of communications, adds Jimmy Sawyers, co-founder of Sawyers & Jacobs, a technology and management consulting firm in Collierville, Tenn. Developing a contemporary contact center will also include deploying specialized software systems, he says. Such software is necessary to help contact center staff manage both customer data and customer communications to quickly and efficiently serve, connect with and cross-sell customers.

Budgetary resources are certainly another question that comes into play for all community banks considering expanding the capabilities of their customer contact centers. And here again, consultants say community banks may find the resources to build out and staff their contact centers by diverting money spent on their brick-and-mortar channels. One standard shift in thinking for community banks to consider regarding contact centers—one adopted by the largest banks and retail outlets—is to think of and engineer the hubs as revenue drivers rather than as merely service expenses, they say. That shift in roles for contact centers mostly translates into more active cross-selling by contact center staff, including the possibility of making outbound telemarketing calls. Such a major shift in sales and marketing would require careful thinking for community banks about whether taking such a step could undermine their primary market position as trusted, relationship-driven—rather than transaction-driven—financial service providers. And, of course, how such outbound sales and marketing calls are carried out could be as pivotal as to whether or not to conduct them.

No doubt, the digital age will continue to influence how community banks serve their customers and communities. As almost everyone in the industry agrees, including most bank consultants, no financial institution can provide everything that every customer may want—let alone every institution provide instant and anytime interactions of every kind in any channel or mode of communication. High-powered, 24-hour, multichannel customer contact centers won’t be necessary for every community bank. However, customer contact centers, in one form or another, are certainly one consequential component of a broader multichannel puzzle that community banks will need to consider and respond to.

Phil Britt is a financial writer in Illinois.