Thursday, March 10, 2011

Has video finally arrived for branch and contact centre?

For as long as I have worked in financial services IT (and some time before), video has been trumpeted as the "next big thing" for retail financial services but has not taken off as predicted. Yet I wonder if this solution that Bank of Moscow has rolled out and the news week before of Bank of America is piloting video for wealth management might change that....

The vision presented by technology vendors has been compelling; the idea that an expert in a branch or in a contact centre could cover many other branches by being video conferenced in to that critical customer meeting. At a stroke travel expense could be reduced as there would be no need to have advisors moving around doing one day a week at each branch of their territory. Customer experience could also be improved radically, as no longer would a customer wanting advice on a pension (or other regulated product) be told to "....make an appointment and come back when the advisor is in".

The financial arguments have also seemed compelling. Training staff to sell regulated products is expensive and HNW (High Net Worth) and other attractive target customer groups are not the customers who frequent high street branches. My last blog post ("Where did it go wrong for Barclays branches?") went into this more detail, but there are very limited returns from basing expensive people in branch and relying on passing trade and the business marketing can drive to those branches.

To a certain extent the puzzle is why video has not been used earlier, and I think the problem has been partly technical and partly organizational.

The organizational problems are understandable. Branch managers like to be able to see their staff, and when measured on sales they want to have control over the people doing the selling. Having them physically in the branch is one of the easier ways of meeting that need. Similarly, branch sales advisors have enjoyed the status they have within the branch and moving to a contact centre environment (even a video contact centre) has been seen as a demotion. Given the low barriers to setting up as an IFA if you are already qualified, retention of qualified staff has been an issue for all the major banks. Finally, the customer experience of early video conferencing did not meet the hype, and this has stayed in the minds of many business users and customers.

The poor experience of early video conferencing solutions were largely a result of the technical limitations imposed by making any solution cost effective. Early approaches lacked common standards and, as with much in telecoms and IT, the rise of IP (Internet Protocol) has helped hugely to drive down costs and increase compatibility. IP hasn't solved everything, and there are still 'debates' among vendors (sometimes pursued to the levels of near religious war) about the relative merits of the H323, H264 and SIP protocols but common standards have made a huge difference to costs. Furthermore, IP protocols put video conferencing much more into the world of IT and software and into a world where the user experience matters. I would argue that the problem with many of the initial video conferencing solutions was that they were so focused on the technical challenges that they tended to neglect the user. The poor quality image with a slow refresh rate and of early video conferencing (as well as the difficulty and poor user interfaces for setting up calls) has been largely addressed in the solutions from today's the leading vendors. In fact user experience has been one of the key features of both Cisco Telepresence and HP Halo and may be significant factor why these are succeeding where more specialized predecessors have failed.

I find it especially interesting in the case of Bank of Moscow is that this integration is based on Avaya. Avaya are noted for their strength in contact centre, most notably around the ACD (the system that distributes calls to agents) and video is a relatively new area for them. It is a sign of the impact of protocols that Avaya (who have launched their next generation of contact centre based on SIP as a standard) are able to integrate video into what has historically been a voice environment.

In other words, the historic obstacles to video of user reluctance and technical inhibitors have been largely addressed and video can be deployed. The question, though, is will video deliver?
I believe there is one more hurdle to overcome that many vendors have not yet appreciated. The technical, the business case and the usability by non-IT staff are merely pre-requisites for video to be deployed. For video to succeed in this type of retail financial services it remains to be seen how it affects the psychology of consumers. Will consumers be prepared to take financial advice in a video session? Will the technology prove too distracting or disorientating for some demographics to engage in the integration?

These questions remain unanswered, but it will be interesting to see if video can deliver on its potential.

Monday, January 31, 2011

Where did it go wrong for the Barclays branches?

It was a surprise last week for me to see the news that Barclays was to sack 1,000 Financial Advisors from their branch network.

It’s a while now since I last worked on bank branch IT, but when I did (only four years ago) the focus was very much around replacing old branch systems and enabling branch as a sales channel. The market was full of software vendors offering everything from the RFID identification of clients to analytics engines that ensured the presentation of the best offer to clients. Many of these products also talked about their multi-channel capabilities (by which they meant internet) and a very significant focus of the market was on enabling sales in branch. Occasionally lip-service was paid to contact centre or ATM or mobile, but the main focus of the analysts, consultants and many banking executives was on branch based sales.

So where did it go wrong for the Barclay’s branch advisors? At a superficial level, being a sales person at a bank with a strong brand, at one of the few banks not to need a government bail-out and with a large UK retail market share would seem very attractive. Barclays has a good SMB business banking franchise, so that would suggest lots of small business owners to sell products to.

I think part of the answer is that the target market is still attractive and still there. The number of individuals just below High Net Worth (HNW) status continues to grow and these individuals need advice. The true HNW demographic that is targeted by the Barclays Wealth division, part of Barclays Capital, so although there may be some overlap the branch advisors had a significant number of potential customers. The branch advisers were meant to target individuals who were below the £500k asset threshold required for Barclays Wealth, but I suspect the advisors didn’t for a number of reasons.

Firstly these higher earners or asset significant individuals do not regularly visit branches. I’m prepared to bet that most Finextra readers (especially those who live & work outside a city centre) have not been to a bank branch in a long time and this seemed to be the case for many Barclays branch customers.

This misalignment between the demographic the advisers were meant to target and the demographic that actually was accessible in branch accounts is perhaps one of the significant factors in the decision to end branch based advisers. My suspicion is that it was this misalignment that partly contributed to the investment advice failings that led to the FSA fining Barclays £7.7m and requiring Barclays to pay up to £60m in customer redress. On the retail banking side, that is a significant sum, especially when added to the not insubstantial cost of maintaining a staff of financial advisers and paying for the associated training and compliance.

Additionally, as Barclays acknowledge, buying habits have changed substantially and as Barclays say the reduction in branch advisors is “…reflecting a growing trend of customers purchasing and managing their investments online”. The problem for Barclays is that the wealthy middle class individuals who they most want to target are some of those who have most readily adopted the internet as a comparison shopping channel. The growth of UK financial services comparison sites (Go Compare, Money, etc…) has had a profound effect on insurance (I last wrote about it in this blog post on Aviva 2008) and clearly is catching up with retail banking. There seems to me little point marketing to customers on the basis of brand when most customers can purchase products without engaging with any of the brand value propositions and can instead buy more easily on price, on line. Barclays are acknowledging some of this reality with the launch of their online "Investor Zone" and all their retail investment services will now go through this route on a non-advice basis.

The problem is I’m not quite sure where these leaves branch banking. Advisers in branch were expensive, but were always justified as necessary for selling the higher margin, usually longer term products. The trouble was that branch advisers were not necessarily that well utilized and many of the more aware customers preferred to use either on-line purchase without advice or the service of an Independent Financial Advisor (IFA). I thought Barclays had the right idea with their centralized Barclays Financial Planning team when they had that operating as a central team, based from a contact centre. That model, where an IFA qualified adviser could remotely cover the branches too small to have a dedicated financial adviser seemed to me to combine the necessary level of coverage and scale that was necessary to be cost effective. However, the model didn’t seem that successful in practice and I wonder if that was due to the maturity of the technology. At the time, multi-channel was not easily possible in an integrated manner and this made things very difficult when trying to run a sales business that was regulated by both OfCom and the FSA. Longer term, I wonder if video could be the solution for the centralized adviser model (though it’s been talked about for long enough) or whether we may seem some of the ideas Bradford and Bingley toyed with, of having an IFA in branch who is more independent than the traditional tied financial advisor. The one area this has always neglected is how the internet channel can be supported by advisors in the contact centre and that, with or without video, strikes me as the best future for low cost advice.

Thursday, December 02, 2010

Whither voice biometric security after the UK Department Work & Pensions drops anti-fraud trials?

An interesting story last month on, that the UK Department of Work & Pensions has abandoned its trials of voice biometrics as an anti-fraud tool.This is not a snap decision, as reports that the DWP has spent at least £2.4m on trials since May 2007. This is one of the largest payment organisation’s in the UK, so its decision is of interest to most organization who need to validate customer identity and handle payments. Voice biometrics has had a lot of interest from the financial services industry, so the DWP’s decision may well lead a number of banks to study it closely.

What makes it especially interesting is that fraud is such a huge problem for DWP (the DWP’s own estimates put their annual fraud losses at £5.2bn per annum) and voice biometrics has promised so much to reduce fraud. Indeed, as anti-fraud has been one of the major pitches of the voice biometrics industry, why on the surface might it have failed at the DWP?

The first part of this is to understand what types of problem voice biometrics are good at tackling. In my experience, voice biometrics are a useful tool in identity validation. Passwords tend to test “do you know what you should know?”. By comparison, biometrics can test “…are you who you say you are, even if you do know your password?”. There are valid arguments about biometrics accuracy, but provided they are not used as a single factor authentication when taking a voice sample over a poor quality public telephone line, I believe that they remain a valuable addition to the security toolkit.

I have to admit that while I haven’t worked directly with DWP, I do have some knowledge of the issues they face from work with local government and other government departments.
Identity theft is the sort of fraud that voice biometrics is ideal for tackling, but traditional identity theft in the form of impersonation is relatively low. This is partly because although the amount stolen in benefit fraud is large the value of individual claims is relatively low and identity theft impersonation is generally uneconomic.

A much bigger problem (where voice biometrics could perhaps play a part) is false identity. The problem here is that once you let a false identity into the system through one channel, then it can ‘validate’ itself through other channels and become very hard to detect. Preventing false National Insurance numbers being created is crucial and this is perhaps an opportunity for voice biometrics, at least to prevent serial fraudsters creating multiple identities themselves.

The biggest problem, though, for the DWP is the complexity of the system and the massive fraud figure of £5.2bn (2.1% of all expenditure) is as much a reflection of error as it is of more exotic types of theft. This error can be genuine on the part of claimants, or deliberate, but either way it is the complexity of the system and the lack of real time information that prevents its resolution and detection.

Surprisingly, this was the problem that the DWP tried to tackle with voice biometrics, basically trying to use tone & emotion detection and similar mechanisms to detect claimants lying. I have to admit some doubt here as to whether this is a practical application in real time. In the world of call recording it has long been used as an application that can detect calls where customers (or call centre workers!) have become angry, but this has not tended to be a real time application. The other problem is the inbound call to DWP. At the risk of stating the obvious, claimants of benefits are more likely to be stressed than average and especially so when talking to the DWP. Furthermore, most of the demographic who regularly deal with the DWP are likely to be calling on mobile phones rather than landlines (so poor call quality) and be may well not have strong English language skills (so will be more hesitant, accented and less standard).

My suspicion is that the best way for the DWP to tackle fraud would be to use more process simplification and back this up with analytics rather than try and fix the front end with technology. Once that’s done, voice biometrics could have a very valuable anti-fraud role to play, but as the solution to the right problem.

Tuesday, November 09, 2010

CC Expo reflections (Contact Babel) & Cisco's latest Contact Centre Announcements

The blog has struggled to find time to comment since CC Expo, so regrets not having done a follow up post recently. One notably omission from my last post was of Contact Babel. As analysts go, they are one of the ones that I rate very highly. The huge bonus of visiting them on the stand is that they were giving away CDs of "The UK Contact Centre Decision Maker's Guide", which is a publication I use the report regularly as it's one of the few to give details on things like the number of multi-channel interactions in UK contact centres. If you missed them at the stand, then the good news is that the report is available for free download from their website.

The other interesting things happening this week were major announcements from Cisco about their contact centre portfolio. The two most exciting parts of this were Social Miner (an integration for the contact centre to track social media) and the Open Recording Architecture (ORA) that will allow capture and recording of media across the network, both inside and outside the traditional contact centre.

For those interested in more, there is a good public webinar on the ORA on the CRMXchange site today.

Presented by Ken Rehor, Product Manager, Cisco
Date: November 11th, 6-7pm GMT, 7-8pm CET
Registration: click here

Contact centers handle thousands of customer conversations a day, but unfortunately much of the enterprise intelligence that could be gleaned from those conversations is never used because it's either too expensive to capture, or too difficult to mine for useful information.
By attending this webcast you will discover how to take an open-standards, network-based approach to recording that addresses these challenges.
You will learn about:
• Example topologies and scenarios for network-based recording
• Sample open Web APIs that facilitate integration of network recording with business applications
• How network-based media forking facilitates live/silent monitoring
• Multiple methods of media playback

Speaker, Ken Rehor, Product Manager, Cisco
Ken Rehor works in Cisco’s Voice Technology Group on the application of new speech technologies for customer care. Prior to joining Cisco, Ken held various consulting and R&D roles at industry leaders including AT&T, Lucent Technologies, Bell Labs, Nuance, and Vocalocity. Speech Technology Magazine named him one of the industry’s 20 most influential people for his pioneering work as principal founder of the VoiceXML Forum and one of the original authors of the VoiceXML 1.0 specification. Ken is co-chair of the VoiceXML Forum’s Conformance and Speaker Biometrics Committees. He is co-editor of industry standards such as VoiceXML 2.0, 2.1, Call Control XML 1.0, and the forthcoming VoiceXML 3.0. Ken holds seven patents in the area of web-based telecommunications. Ken earned BSEE and MS EECS degrees from the University of Illinois at Chicago.

Tuesday, September 21, 2010

CC Expo 2010

It’s that time of year again and the UK Contact Centre industry is once again in Birmingham at the NEC for Call Centre Expo. This year feels a bit different from previous years (as covered by the blog at: "Contact Centre Expo 2009 - Day Two" and here for 2008), and I think there are signs both of economic recovery and a fundamental shift in the way customer service is provided.

The blog’s view of top trends this year:

Cloud is real & here to stay – Last year this was an emerging trend. This year the number of cloud based vendors had, if anything, increased. Interestingly, this was both the cloud based contact centre and the CRM vendors. I was particularly impressed by the stand (and loved the squeezy cloud giveaways!). For me it was interesting to see how far ahead CRM is over voice and that where CRM leads, voice is likely to follow. For the moment there is still seems a customer preference for deployments of voice kit on premises (perhaps driven by some lingering concerns over QoS) whereas the same customer will happily consider cloud based CRM. Among the voice vendors, the most credible seemed to be New Voice Media, with a large stand next to Cisco by the entrance with a host of smaller vendors (such as ) further inside the show. The difference between Cloud and Hosted is perhaps worth a separate post, but the trend is clear.

Where were the traditional vendors? – For me this was one of the big surprises. Cisco had a brilliantly located stand right in front of the entrance. Genesys also had a good, well designed stand further in with some excellent hard copies of white papers & case studies (though I can't find them on their website). I found Aspect with a smaller stand in a quieter section (& no mention of all the Microsoft advertising they had last year), but where was Avaya/Nortel? There were signs of the odd Avaya partner, but this was a real surprise given that last year the show was plastered with Avaya/ BT partnership advertising. I was also surprised not to see any sign of Mitel, especially as NEC was present (and who are traditionally only a small player in the UK market).

Overseas destinations have really shifted – Over the last few years nearly every English speaking emerging market has taken a stand and pitched for offshore contact centre business. This year I was pleased to see that only the serious seemed to have stayed the course and Bangladesh were there with an impressive stand for the third year running. BACC (the Bangladesh Association of Call Centre & Outsourcing) has significant support from the Bangladesh government and I was impressed how well they understood that for outsourcing to work they had to provide more than just a proposition based on cheap labour.
More curious (and completely unexpected) was the French Pavilion. I have to admit that France with a 35hr working weak and strong unions has never struck me as a natural destination for outsouring work. Indeed, from my experience of working there, French companies have been very enthusiastic (if discrete) about building offshore contact centers in French speaking North Africa (see my blog post: "Offshoring and mainland Europe" for example). Still, there was a charming chap from Invest in Champagne-Ardenne and he stressed the benefits of Chalons-en-Champagne. things such as rents 25% cheaper than Greater Paris and a high quality working environment. All nice things to be sure, but I’m not sure that these would lead to much business at the UK Contact Centre Expo. I was even less convinced by Team Cote d’Azur, as while it’s a lovely place it’s not somewhere that I think of as low cost. I would agree with them that it is very high tech and multi-lingual, as Sophia Antipolis houses outposts many of the world’s top tech firms and I would agree that they have an existing contact centre base, with the very substantial American Express Travel contact centre operation base there, but I still struggle to see it as a destination for investment. More likely to be successful were the French IT firms on the stand. I was impressed with digitaleo (who offer a rather nice SMS application) and A2iA who already have a reference list of deployments at blue chip UK companies and some very interesting document recognition & processing applications.

CC Marketing seems to be having a “Life on Mars moment” – A real surprise was that as the economy has improved, some contact centre marketing seems to have regressed to the 1970s or some other pre-feminist “Mad Men” era. The RoCom stand with its pretty nurses was of debatable taste, but could perhaps claim some justification around a marketing message of “heal your contact centre”. The guiltier stands should perhaps remain nameless. I’m not sure the use of hotpants, models in very tight t-shirts or ‘ironic’ marketing messages/ innuendos across the models chests really deserves a link or much recognition. I do find it disappointing that marketers should be so unimaginative in a industry such as contact centre which has so many women in senior business positions.

Analytics, analytics, analytics – The final trend that I found very interesting was the focus on analytics. Some of this was from familiar vendors such as Nice, who have long done very interesting analysis on the data in voice and video recordings. The less expected was from IBM, who were back at the show sponsoring a series of seminars on analytics. To a certain extent this illustrates the transition IBM has made away from hardware (most contact centre vendors offer an IBM server on Unix or Linux somewhere in their product) and away from the applications like IBM Call Path and IBM Direct Talk (for those old enough) and the more recent IBM Websphere Voice applications. Here was IBM positioning innovative high-end, high value services rather than their traditional approach of pushing product. Equally interesting, but somewhat different, was Autonomy. This is the first time I’ve seen their focus on contact centre and it was impressive. Autonomy has always had enormous strength when it comes to analyzing unstructured data and contact centre looks a very suitable environment for them as contact centre generates structured and unstructured, multi-source, multi-channel data in a way that only the web channel can rival. I was impressed with the very chunky ‘Autonomy Promote’ brochure I was given (a mere 210 or so pages!) and felt that Autonomy could soon be a major challenger to the more traditional voice recoding analytics vendors and workforce management tools.

Social Media- Definitely one of the hot topics. Genesys had Social Media as a hot topic and did a very good presentation on it, as well as some good case studies and white papers on their stand. Cisco and a number of Cisco partners also had some very good things to say on the subject.

What was also interesting was what was absent. I saw very little of IVR or Speech Self-Service, and comfortably the best of what there was, was the pitch Mark Pritchard from JAMIP. I was very taken with the JAMIP approach to self-service, especially their flexibility around enterprise or cloud based delivery and their very innovative approach to win/win pricing. The pricing in particular struck me as something that made them stand out and was supported by the reference from their work with the NHS (UK National Health Service). Overall, I thought they provided one of the more innovative propositions on display. Another notable absence was that of Eastern European companies. Last year I was impressed by several of them, but this year there seemed to be hardly any.

That’s my take, I’d be delighted to hear what you think or of any trends that I may have missed.

Saturday, September 11, 2010

The economy & mixed news for the UK Contact Centre Industry

It's a very strange contact centre & customer service industry in the UK at the moment.

On the one hand, there is real fear of a double dip recession and the impact of government cuts. You might not spot this immediately, as according to CCF magazine, HMRC (Her Majesty's Revenue & Customs - the UK tax collection agency), is able to hire a massive number of new agents - despite the downturn and the state of the public finances. CCF reports that HMRC will be able to recruit up to 20% more agents to cope with the latest tax blunder. Now by my calculations, the HMRC agent numbers are in the region of 6,000 (or so), so this means perhaps 1,000+ temporary jobs. It also highlights the cost of poor CRM and contact centre technology. CCF cites a source as saying,

"A computer system, which the source said ‘still doesn’t work’ despite being on the fourth release, is also making it difficult for call centre workers to identify callers. “The initial identifier is in fact the employee number and not the National Insurance number, which causes all kinds of problems.”"

The caller identification problems are on top of being unable to answer calls, to the extent of not answering 40 million of them a year according to the BBC. This is partly from HMRC still being a user of TDM telephony in the call centres and so not having the call routing flexibility that IP and VoIP would bring.

Still despite HMRC being able to hire, the long term trend in government spending is clear. C&WW (Cable & Wireless Worldwide), one of the largest government telecoms suppliers issued a profit warning in July (reported by the Register here) based on the proposed cuts in public expenditure. The cuts are sufficient for the C&WW share price to have dropped by 20% as the market assessed how little government work there would be in the years ahead. Even if individual government agencies are temporarily allowed to increase their workforce, the long term direction of government spending seems clear.

Less clear, though, is the direction of consumer spending. Much better news than HMRC (though sadly on a smaller scale) is the news from the Aussie news site that the Australian company Flight Centre is to open two new UK contact centres and recruit 16 agents. New jobs are always good news and this is particularly good news as it suggest that the private sector is seeing signs of growth and for a sector like travel that has a large element of discretionary spending, this suggests increased consumer confidence.

It may be grim in the public sector, but it is not all doom & gloom outside....

Monday, June 07, 2010

Instant Messaging ....and its strange survival in B2C banking

The BBC News website had a great article last week on the slow but steady decline of Instant Messaging.

It was not so long ago that Instant Messaging (IM) was seen as the tool that would replace e-mail. Some technology players still think this might happen (think of Google Wave, for example) but the majority now view IM as a technology that has passed its peak. Instant Messaging had some great advantages over e-mail, such as immediacy, the ability to see it the other party was present and small message size, yet it largely failed to prevail.

The BBC provides some thoughts on why this has happened, such as the initial incompatibility of IM platforms and, perhaps more importantly, the rise of social networking sites. Facebook may have an inferior instant messaging system to the stand-alone applications, but it is very convenient and integrates everything into a single interface.

The one area where Instant Messaging is growing is the "Click to Chat or Call" functionality that you find on websites. While I don't have hard statistics, my suspicion is that banks (and insurers) are steadily investing here. Over the last few months, I've had an increasing number of requests from financial institutions to help them integrate web chat into their contact centres.

There's a number of things that I think are driving this. Firstly, banks have trained consumers well not to respond to e-mail for fear of phishing. This is a valuable security development, but it does make communicating with consumers difficult, especially when outbound calling is heavily regulated and traditional post can also have low response rates in relation to cost. Instant Messaging integrated into a bank's website offers a cheap way of potentially capturing a high value interaction that might drop out of the web channel.

Secondly, and more interestingly, IM offers a mechanism for bridging channels. Traditionally, channels that could serve customers remotely were restricted to voice (real-time & interactive, but finite information presentation) or post (slow & static content, but information rich). Adding IM to the website (or part of the website once the consumer has commenced a product purchase) allows the financial institution to start the transaction in the information rich web environment and then move the transaction into something more interactive, be it a pure IM chat or an IM chat that progresses into a call. This, is the other cause of the decline of the stand-alone IM application, that development of Skype and the increased availability of bandwidth removed some of the great advantages of IM.

The final factor is that IM is blending into social media and new channels such as Twitter. Facebook and banking still looks to me to have significant potential issues around privacy and security, but launching an IM capability on its website gives a bank the opportunity to start experimenting with new service capabilities with some control over the environment. I've looked at this back in 2008 (see my blog post "Online banking and contact centre" for a look at what Rabbobank was doing with IM), and this need to experiment with a selection of functionality at a targeted audience remains a very valid approach.

To me this is a key point. Cloud based services offer a great potential for the rapid deployment of these web 2.0 and IM type technologies, but all the ones I have worked on have run into security or operational issues. It's not that cloud can't be secure, rather that cloud providers struggle to guarantee that they comply with every detail of a bank's security policy, especially when it comes to managing changes in that security policy.

In short, a premises and application based IM approach still enjoys a lease of life in banking. Cloud, social media and web 2.0 approaches may all offer greater functionality, but the underlying security concerns do mean that IM remains an attractive channel strategy option in the B2C financial services world.