Rapid Response?

By Lauri Giesen

Cascading from a trickle to a deluge, customer e-mails have become a major service challenge for financial institutions. Will automation solve the problem?

Electronic mail has become a common way for people to communicate with friends and family, retailers and business associates. So it should come as no surprise that nearly one of every three Americans has interacted with a bank via e-mail at least once.

But in a sophisticated online world where some major retailers can answer e-mails within seconds, bank response times generally do not meet expectations. Many banks typically take more than 24 hours to reply to electronic customer messages, experts say, and few are responding in less than 12 hours.

This is a weakness that must be repaired if banks are to retain their credibility as online providers. "It is difficult for those who use e-mail routinely in their business and personal lives to accept the notion that their financial service provider cannot accept an e-mail," write Meridien Research analysts Richard J. Bell and Tom Richards in a recent report. Customers who can't get their problems solved in a timely manner and to their satisfaction may look elsewhere.

The urgency of this challenge grows ever more pressing. U.S. banks will be besieged with 33 million e-mail messages annually by 2005, Meridien estimates, more than double the current level of 14.3 million. Wells Fargo & Co. alone handles more than 2,000 electronic messages a day and expects that volume to reach 10,000 messages within five years, according to Meridien, which is based in Newton, Mass. "Banks have started to get religion on the importance of managing e-mail," says Ted Josephson, vice president of e-business at Bridgeport, Conn.-based People's Bank, the operating subsidiary of People's Mutual Holdings.

No wonder financial institutions are casting about for ways to improve responsiveness. U.S. banks spent $39 million on e-mail management systems in 2001, Meridien reckons, and that figure will soar to $158 million annually by 2006. Much of the outlays will go for systems that electronically sort, prioritize and interpret e-mail messages. Some systems can actually answer messages automatically, although executives say such technology is best used in conjunction with human operators.

Beyond these technological "fixes," institutions are using more prosaic methods to accelerate e-mail responses. One obvious technique is simply to hire more employees to handle electronic messages. Since institutions have generally found that call center employees trained on the telephone do not take well to written communications, many are building cadres of e-mail specialists. Standardized response scripts can help these specialists improve turnaround time.

There are no magic bullets, since all the automated systems and staffing solutions have their limitations. But a comprehensive approach blending both technology and skilled personnel seems to work best.

Expectations Gap

The industry's throes with e-mail are reflected in recent surveys. For example, 38% percent of respondents to a Cap Gemini Ernst & Young international survey published in 2001 said they took between eight hours and 24 hours to respond, and 22% required more than 24 hours to reply. Only 6% of the 250 surveyed financial institutions claimed a response time of within one hour, and 23% reported between one hour and eight hours.

These results make banks look bad in comparison with nonbank providers such as Amazon.com, says James Scurlock, New York-based Cap Gemini's senior manager for the financial services industry. "Yes, it is much harder for banks to research and respond to a customer inquiry than it is for Amazon to check whether a book is in stock. But customers don't understand the difference," he says. "When they can get instant responses from other companies, they expect it from their banks as well."

From the customer point of view, lackluster bank responsiveness seems particularly glaring considering that some institutions offer 10-minute approvals on credit card applications and 30-minute approvals on mortgages. How come these selfsame providers take 24 hours to get back on a balance inquiry? "The credit card application is a straight-through processing application that can be done quickly, whereas the balance inquiry may require going through several back-office systems to get the necessary data," Scurlock says. "The trouble is, customers don't want a technical explanation."

There is evidence that customers are unhappy with that perceived service gap. In May 2001, Atlanta-based Synergistics Research Corp. surveyed 1,000 households about their e-mail response expectations from online banks and brokerages. Nearly 60% wanted same-day service, and 16% required an answer within minutes. Only 20% were satisfied with a response time exceeding 24 hours. Separately, an internal survey at Cleveland-based KeyCorp found that most customers expect a response within seven hours.

The quality of banks' online responses is also being questioned. Among the one-third of Synergistics survey respondents reporting they had sent at least one e-mail to their bank, only 30% said they were "very satisfied" with the response. About 22% were dissatisfied and 47% were "somewhat satisfied."

Banks can never make all their customers happy, concedes Synergistics chairman William Adcock, but he still thinks the percentage of satisfied customers is too low. "There will always be a certain group that can't be satisfied — maybe they are asking that a fee be waived and the bank can't do that. But more than 30% should be very satisfied. Part of the problem is that customers are transferring their expectations from other industries to banks."

Staffing Up

Banks around the country are trying various approaches to improve performance. KeyCorp, for example, hired more people, says Linda Guddat, online bank customer contact manager. The bank now dedicates a dozen employees to e-mail response, compared with nine a year ago, and those employees typically handle between 8,000 and 9,000 e-mails per month.

KeyCorp opted to recruit its e-mail service representatives from within its own call center staff, although some banks hire from outside. Guddat says the bank was able to locate employees with strong writing skills who had already demonstrated proficiency at servicing customers on the phones. These employees then received additional training in dealing with e-mails.

The bottom line: the company reduced its average response time from between 10 and 11 hours to less than six hours, and it says most e-mails arriving during normal business hours can be answered within an hour.

One technique U.S. Bancorp uses to speed up responses is to provide customer service representatives with standardized scripts to use in answering questions. This minimizes the need to craft unique responses and assures consistency in answers. However, Pam Peterson, manager of the bank's call center, emphasizes that the reps still read each e-mail and are responsible for deciding which scripts, if any, to use. They are then expected to modify and personalize the scripts as appropriate.

The company also devoted more staff to handling e-mail responses and improved the quality of the training, says Keith Thompson, manager of customer service for U.S. Bancorp's Internet banking unit.

Minneapolis-based U.S. Bancorp currently answers nearly all customer e-mails within 24 hours, with an average response rate of 12 hours. A year earlier, by contrast, only about half the e-mails were answered in less than 24 hours, with the remainder taking up to 48 hours. This improvement came in the face of rising volume: 17,000 messages last November, up 56% from the same month in 2000, mostly on account of a change in the bank's Web site that encourages customers to communicate via e-mail.

A further step would be to use an automated response system. Although U.S. Bancorp has investigated such systems, executives say they currently prefer using their staff of six human operators, who exercise their judgment as to whether a standardized or customized response is needed.

KeyCorp is also evaluating automated e-mail management systems, but as part of its broader customer relationship management strategy. "This is a complex decision and the systems are very expensive," Guddat says. Meridien's Bell says the cost of such systems varies, but vendors typically quote prices to large institutions ranging from $225,000 for a very low-end system to several million dollars at the high end.

Judicious Automation

Whatever the up-front cost involved with automated systems, using human operators is more expensive over the long-term. Meridien estimates that e-mails processed manually cost at least 10 times more to handle than those answered automatically.

Automated systems have their limitations, however. If an e-mail message contains multiple questions, for example, the systems tend to answer the first and ignore the rest. And efficiency degrades as the message becomes more complex. Recognizing they can only deploy automated systems in conjunction with human operators, banks are proceeding cautiously.

Consider, for example, Atlanta-based SunTrust Banks Inc., which receives about 40,000 e-mails a month. SunTrust uses 30 employees to answer 95% of its e-mails within 24 hours and is averaging a turnaround of about 22 hours, according to John McGuire, managing director of SunTrust Online. While executives express satisfaction with current response times, they also recognize that customer expectations are rising. New technology is slated that potentially will slash the response time average to 12 hours.

This new system will incorporate automated answers, albeit in a judicious manner. "We want to keep our customer service representatives in control of the process," McGuire says. "We may use automated systems that pop up a suggested answer in response to a question. But the service agent will still decide whether or not to use it, and whether the response needs modification."

The system will be able to identify urgent messages, such as those dealing with bill-pay problems, and prioritize them. It will further allow customers who do not bank online to send secured e-mails. SunTrust's current system uses the bank's online banking security and passwords so that sensitive questions, involving balance inquiries for example, can only be sent by customers with online banking access.

In general, large banks are somewhat hindered in their use of automated systems by the need to integrate the new technology into their complex and far-flung information technology systems. For that reason, more tightly knit institutions — such as mid-size and community banks, Internet banks and credit unions — have been a bit more adventurous in experimenting with automated e-mail.

For example, People's Bank, a $13 billion-asset regional bank and a national issuer of credit cards, receives more than 30,000 e-mails monthly, 70% of which can be answered automatically, according to Josephson. The bank's service standard requires that all e-mails should be answered within one business day, but it frequently answers messages within four hours.

A key part of the response technique at People's is to view each e-mail and prioritize it. Stop-payment requests, for example, are sent to the top of the list. The system then identifies key words and routes the message to the appropriate service agent — mortgage, credit card or checking account specialists, for example.

When the rep receives the e-mail, the system automatically suggests a reply. The rep reviews the answer and then decides whether to forward the reply, modify it or rewrite the response. The system can also identify difficult or complex problems and forward those to the most experienced customer service personnel.

Another institution heavily impacted by customer e-mail is Atlanta-based NetBank Inc., which also receives more than 30,000 e-mails a month. An automated response system has helped this institution accelerate its response rate to between six and eight hours, compared with about 24 hours a year earlier. NetBank's system identifies key words in a message to suggest a response. An agent then reviews that response to make sure all the questions being asked have been answered.

NetBank is also trying to make sure that customer questions receive complete answers. Ginny Johnston, executive vice president for customer care, says the institution installed templates that request specific information before the e-mail response is sent. For example, if a customer has a bill-payment question or complaint, a template will pop up telling the rep to ask for the necessary account numbers, due dates and balance numbers.

Efforts such as these demonstrate that while financial institutions haven't yet discovered the perfect method for handling e-mail, they are at least taking serious steps to address the problem. And the way things are headed, human judgment will remain part of the response equation.

Ms. Giesen is a freelance writer based in Libertyville, Ill.

Copyright © 2003 by Banking Strategies, published by BAI.

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