Help Those Who Help Themselves

Customer expectations are raising the bar for bank self-service. The percentage of U.S. retail banking customers who conduct at least 75 percent of their transactions via a self-service channel has grown from 34 percent in 2001 to 40 percent today, according to Jerry Silva, research director, retail banking, TowerGroup (Needham, Mass.), who predicts that figure will reach 45 percent by 2010. This is creating an opportunity for banks that can provide effective self-service capabilities.

Self-service options are most popular among customers in the 42- to 48-year-old age bracket in the emerging affluent market (defined as consumers with annual incomes of $100,000 or more), an attractive segment for banks, Silva notes. The banks that will have the most success with customer self-service, he relates, will be those that remember self-service is a choice, not something to be forced on patrons. "Self-service is all about customer adoption," Silva says.

The desire to provide customers with better self-service is one of the factors some banks are weighing when evaluating online platforms. San Diego-based North Island Credit Union ($1.5 billion in assets), for example, is installing Corillian's (Portland, Ore.) Voyager online banking platform in part because it has more-robust self-service capabilities than the bank's legacy system, according to Scott Williford, first vice president of e-commerce, North Island CU.

"About one-third of our members regularly use online services," Williford says. "They tend to have twice the number of [products] that we offer, have higher balances and are five times more loyal than members as a whole." So meeting this group's desires for more self-service bill payment options and expanded account fund transfer capabilities, for example, was an important requirement for the credit union's new online platform, Williford adds.

Can You Be More Like Them?

Customer demands for bank self-service are being fueled by their experiences with other industries, TowerGroup's Silva reports. "Growing self-service initiatives outside of the banking industry will drive and challenge banking institutions," he says. "The good news here is that customers are getting used to self-service. ... But the bad news is a lot of the self-service experiences that we see outside of banking tend to be better experiences than [financial services] offer."

The increasing adoption of speech-enabled, interactive voice response (IVR) systems outside of financial services is one factor driving consumer expectations. "Speech technologies offer a way out of the limitations of the IVR," Silva says.

Adding speech capability alone, however, won't drive adoption, Silva cautions, stressing that speech solutions must simplify self-service rather than frustrate customers. "Design is 90 percent of the success," he says. Further, it's important to remember that self-service shouldn't be seen as an either/or solution, Silva adds. "The potential for the most powerful synergy is between assisted service and self-service."

For example, Chicago-based Harris Bank ($34.5 billion in assets), a subsidiary of the Bank of Montreal, enables customers to request a call from an agent while they're researching information online. Customers with telecom capabilities on their computers also can opt to use the Push to Talk button to call the bank's contact center while they're surfing.

"By using technologies like automated speech recognition ... and by adopting best practices from other industries, banks can expand their opportunities to meet heightened expectations and delight the customer," Silva says.