January 14, 2004

IM, e-mail and cross-selling are among the ways banks are striving to improve service and profitability in their contact centers.

For as long as disgruntled, confused or curious customers have existed, banks have needed contact centers. The challenges of staffing, equipping and managing those centers so that they operate efficiently and cost-effectively have existed just as long. And, as contact centers become increasingly technology-enabled, bankers have had to balance the sometimes competing demands of "high-tech and high touch" with other imperatives, ranging from new privacy requirements to changing expectations of customer service to the need to demonstrate technology ROI. For example, financial institutions are using messaging and data technology to integrate channels to not only personalize customer service but also to improve the profitability of these facilities.

But the reality remains that, for the most part, the activity at bank contact centers generally is viewed as a cost-almost the proverbial necessary evil-rather than a revenue generator.

Cut Costs, Build Revenues

Maintaining a contact center has been a cost drain for banks until recently, when improvement in cross-selling tactics have started to have an effect, reports Book Booker, senior vice president and director of business and workforce solutions, SunTrust Online, part of Atlanta-based SunTrust Bank Inc. ($120 billion in assets). As a result, the monetary loss is now reaching a break-even point, according to Booker.

"Traditionally, contact centers have been cost centers and only recently have we seen contact centers move from cost centers to profit centers," says Booker. "Here at SunTrust Online we break even, in all honesty." Because of increased sales activity taking place in the contact center-conducted by both customer service and sales representatives-the bank has neither gained nor lost money on its contact center. In fact, SunTrust opened a 350-seat contact center the past June that features live representatives, as well as e-mail and live chat.

"We do quite a bit of selling here," says Booker. "Both our customer care reps and our sales reps are all required to be what we call 'financial physicians.' If you call and you have overdrawn your account, they are supposed to help you understand that you could have eliminated some of these fees by having overdraft protection and talking about multiple ways of having overdraft protection."

The addition of cross selling capabilities to in-inbound and customer service contact centers has become increasingly popular in financial services, according to Chris Bogan, CEO of Best Practices, (Chapel Hill, N.C.), a research and consulting firm. "There is a trend of trying to move call centers from service to sales centers," says Bogan. "The essence of this is a variety of other regulatory and economic changes that [is driving] many industries to work on growing relationships through their customers. This is driving them to change and transform the centers from just pure service orientation to a service orientation that seeks to expand the relationships by adding new services or products to the customer relationship."

Although the increased selling has helped build business, the revenue does not automatically bring profit to the bank, which has to cover the cost of running the contact center to begin with.

"Half of our sales come from referrals from customer care, but we are breaking even because there is a hefty cost for call centers," says SunTrust's Online Booker. "If you did the math on this you would find very quickly that it is a big cost. There are many contributing factors. You can argue that we are cost effective because if you didn't have the centers, you would have to go somewhere else to get the answers at an even higher rate. To say you want to be a profit center says that, not only are you providing a significant service to your customers, but you are you selling enough to pay for the services that you are providing to the customers. So it becomes an added benefit."

Another tactic to increase contact center profits via cross-selling involves offering products that make the institution stand out-products for which customers would not normally turn to their retail bank, according to Casey Roberts, director of retail investment services, Sovereign Bank (Wyomissing, Pa., $40 billion in assets). The institution recently opened a new online answer center that can be accessed on the bank's Web site, under the investments section.

"Banks tend not to be viewed as a place to go for investments and insurance products," says Roberts, regarding customers using the bank's investment services. "This is a big cross-sell barrier to overcome."

On the cost-reduction side, another growing trend in the banking industry is outsourcing contact centers, including going offshore to do so, according to Virginia Johnston, executive vice president of customer care, NetBank (Roswell, Ga., $4 billion in assets).

"Our call centers are outsourced to Canada (with TeleTech, headquartered in Englewood Colo.) where the labor pool was to our advantage, because that is a more cost-effective way of handling our voice interaction," says Johnston. "We constantly look and monitor channels to reduce costs. Another way contact centers can be profitable is by offering to customers additional products and services when it makes sense."