CAMBRIDGE, Mass. – Financial institutions are working hard, and spending big, to get consumers to opt for online service over costly phone calls, but the progress has been slow, a new report says. In a year of tight budgets, 30% of the respondents in a survey of credit unions and banks told Forrester Research that they would spend more in online service this year than last. Going forward, they expect for their efforts to move 10% to 24% of telephone service calls to online service channels by 2004, the respondents told Forrester. But, will that happen? "They won't succeed until they integrate online and offline service delivery and incent customers to change their channel behavior," analyst Catherine Graeber says. "Delivering consistent cross-channel service is a barrier to success for 97% of these firms," she says. Integrating the channels is one key. For instance, most banks and credit unions that are online offer self-service for checking and credit card accounts, but not for investment or other products. And while internal persuasion is used – to get service reps to encourage online service use – there's not much external persuasion going on. "Financial institutions expect online services to reduce costs. But they're not willing to do much to change their customers' ingrained channel behavior," Graeber observes. "Of the banks and credit unions we surveyed, 67% don't lower account fees and 61% don't offer financial incentives to encourage consumers to use online services – and two-thirds of them don't plan to," she says. The problem, the Forrester analyst says, is that "consumers simply see no reason to change their behavior otherwise." Some options that have shown promise include rewarding consumers for going online by offering them bundled online services with reduced fees, as well as deposit rate bonuses and fee discounts on credit products. In addition to the financial incentives, credit unions can make the online service environment more attractive by simply making it more effective, Graeber says. To accomplish this, she recommends: *Automating e-mail responses . Done right, this works well. Done poorly, it can really backfire. To ensure the former, Graeber advises using software tools that automate e-mail routing to the proper work queue, recommend automated responses to service reps, escalate unresolved e-mails from self-service to assisted service, and provide feedback to monitor e-mail resolutions and address common inquiries. (Graeber cites eGain Communications and KANA as examples of vendors in this niche.) * Monitor the quality of e-mail and chats . Monitoring member service phone calls is routine. Why not the same for the online world? "Financial institutions should institute the e-mail and chat equivalent of call monitoring," Graeber says. "Supervisors can then review the quality of e-mails and chats by agent, and even observe and analyze the interaction as it actually occurred." (Witness Systems is a vendor Graeber mentions here.) * Use a knowledge base for agents and customers . FAQ lists are valuable, but too often outdated. And stacks of binders on service reps' desks are not very efficient, the Forrester analyst notes. Instead, she says, "Knowledge management tools from firms like RightNow Technologies and ServiceWare can increase first-call resolution, decrease time and expenses for agent training and reduce call times." Graeber adds this caveat: Deploy such tools first inside and then offer them to your members. * Identify predictable live interactions for automation . Consider using "virtual reps." They're generations ahead of the annoying paperclip assistant in Microsoft Office applications, Graeber says, adding: "Virtual reps from firms like Finali and NativeMinds can mimic live agents by conducting an interaction with customers and providing potential solutions." She says banks and credit unions should use such tools for "newbie online customers" in their first few sessions, of course, but that "just as important, through performance analysis, the technology allows firms to progressively identify predictable live interactions and automate them to drive down costs." Driving down costs at the bottom line is the bottom line in all this. And what will make that happen? When the right people care, perhaps. "Many execs are irate when call center reps are unresponsive or ignorant about products," Graeber observes, "but they don't show the same concern about unresponsive or ignorant online interactions." And, she concludes: "Right-channeling firms will first, re-bundle services to migrate account and self-service transactions to electronic channels, then provide collaborative support, and rebuild cross-channel experiences." -

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