Putting Technology in its Place

By Thomas P. Johnson Jr.

Although technology can help facilitate transactions, it's no substitute for person-to-person interaction.

It wasn't long ago that prominent theorists heralded a new world of virtual banking in which technology would become an outright replacement for some of the functions previously performed by people. It was thought that a system linking automated teller machines, data warehouses and the Internet would enable banks to interface with customers primarily through machines, thereby driving down overhead.

While online activities still hold tremendous promise, it's becoming increasingly clear that technology's proper role is as a supplement to human interaction — not a substitute. A recent survey by TowerGroup found 92% of U.S. households still using branches to conduct their financial service transactions. Even though 76% of those households use the PC for personal activities, only 18% have tried home banking. Conclusion: person-to-person contact still is the foundation of customer relationships.

This has widespread ramifications. As senior editor Kenneth Cline writes in this issue's cover story, the banks that have been most successful in selling basic checking and savings accounts do so by leveraging human contact at the branch level. Customers are usually attracted by the convenient, high-touch service they receive at these offices, and they amply reward the institutions for their lavish care.

Even in areas where you'd think technology would matter most, human contact is still critical. Consider online financial planning tools, for example. According to writer Julie Monahan, financial service providers have discovered that these automated advice engines work best when offered in conjunction with human planners who can help customers populate the data fields and interpret the results. As a result, the sophisticated online planning companies are scrambling to hook up with brick-and-mortar partners.

The need for human contact applies to management issues as well. Lawrence Baxter, head of the eBusiness division at Wachovia Corp., says the use of electronic messaging technology such as e-mail is helpful for basic communications but can actually impede the resolution of complex issues. "I sometimes think that if we occasionally declared a moratorium on e-mail and voicemail for a week and spent more time talking directly to each other, we'd be better off," Baxter says in a wide-ranging interview.

The point is well taken. Effective human interaction is the starting point in dealing with both customers and staff, and that casts technology in the continuing role of a supplement. Only by keeping the human element in mind at all times can managers advance their strategic goals. "It's somewhat of a paradox," Baxter says, "that in an age of technology, people matter more than ever before."

Copyright © 2003 by Banking Strategies, published by BAI.

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