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

An interesting story last month on Silicon.com, 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 Silicon.com 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.

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.

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 Salesforce.com 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 Virtual-Call-Centre.eu ) 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.

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 CallCentres.net 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....

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.

RBS to shed 2600 jobs 500 roles to be shipped offshore

A very interesting story on Finextra stating that RBS is to shed 2600 jobs and 500 roles are to be shipped offshore.

It's always sad to see job losses on this scale and (if it's correct) the Finextra calculation that Royal Bank of Scotland has cut 22,600 jobs since the crisis began, helps provide an indication of the human cost of the banking crisis. The problem is that while popular anger at senior banking mangers is in many cases justified, most of those who are losing their jobs are generally people far lower down the organisation who had nothing to do with management decisions.

To see the banking crisis and subsequent nationalisation as the cause, though, is to slightly misunderstand what is going on here. I would argue that the banking crisis has forced retail banks to start looking hard at their front office operations and many have realised that, if this was a retail business, (and to a certain degree it is!) this is not necessarily how a retailer would run things. One consolation for the Edinburgh, Glasgow or Newcastle based staff of Royal Bank of Scotland is that retailers like Tesco Personal Finance have seen the opportunity and are setting up operations to challenge the banks directly (see "Tesco Bank creates 1000 customer service jobs"). For the bank, though, this represents a real challenge as Tesco bring skills in customer service, channel management & distribution and especially in customer analytics that the banks may find hard to build themselves.

The other part of this goes beyond the efficiency of a banking distribution channel. I blogged in February on how Shop Direct had gone from thousands of contact centre employees to hundreds (see "Shop direct cut 1,500 jobs - the internet finally takes its toll").

I suspect the same dynamic is at play for the insurance market. The phone based model of Direct Line and Churchill is costly to operate and under threat from both web aggregators and web only insures such as Swiftcover.com. These are both subjects I've blogged on before here, so I won't cover the ground again. It's also the case that the contact centre infrastructure at RBS Insurance was aging and was likely to need an upgrade. Under cost pressure and a shift in consumer channel usage, the bank has had to cut costs dramatically.

I'm not always a fan of offshoring, but the bank does seem to be approaching it sensibly and moving back-office (presumably non-customer facing) roles offshore. This type of move is where offshoring can be very cost effective without generating the hostility and customer service issues that come with moving a call centre.

To a certain extent, though, the back-office offshoring may well have happened anyway. The big theme here is how the very large onshore call centre handling straightforward transactions is contracting as business moves to the web. Call centes will remain very important for problem resolution, for complex interactions, cross-sell and for high value interactions, but it is clear that the banking crisis has brought forward some of the fundamental changes in banking and insurance channels.

A meditation on SIP, SOA and Software

Today, the blog is thinking about SIP.

This was triggered by one of my customers turning to me yesterday and saying,

"SIP, isn't it just another of the IT industry's three letter acronyms for marketing? Just like SOA really, but even less likely to change things".

Now the blog has looked at SOA before (see posts like: "SOA - bringing CRM, telephony and business together? part 1") and the blog is a strong believer that SOA is a very major change in how IT is done. The downturn has perhaps slowed down the rate of SOA adoption, but nearly all the customers I work with are considering SOA approaches to at least some part of their IT environment.

For the communications industry, I think there is now little doubt of the impact of SIP. I suspect that SIP is going to bring with it a radical series of changes. To a certain extent (and to stretch an analogy), while SOA is the consequence of what client/sever did to the mainframe, SIP is the consequence of what IP has done to networking.

While I wouldn't defend this analogy beyond a certain point, I do think it highlights one interesting truth. The consequences of IP were to open up standards (much as client/server blew apart the vertically integrated architecture of the mainframe) and SIP just takes that to the next level. The impact of SIP may also be as disruptive as those changes were to some of today's business models.

The big thing for me about SIP is that it removes some of the last remaining geographic restrictions on call control. SIP trunking removes the last part of the TDM world, namely that lines had to terminate somewhere and there had to call control near it. To be sure, in the SIP world there still is a need for physical lines, but many of the physical dependencies on call management have gone.

For the call centre industry, this raises interesting possibilities. For example, Avaya have started to show how the use of a SIP session manager might allow them to virtualise ACDs without the application layer approach of Genesys or the network management approach of ICM. For Cisco, the rise of SIP represents a significant opportunity as services at the network layer (such as security) become increasingly important when using such a lightweight protocol. Also, SIP permits video as easily as voice, something that Cisco sees very much as the future. For other vendors, who haven't yet become so comfortable with IP, the rise of SIP represents a fundamental challenge.

Of course, an industry change tends to bring in new entrants and this is where it gets really interesting. I see SIP as ensuring that the future of the voice industry lies with software. That is a view some of the software firms share and is why so many have entered the voice market. I blogged this time last year on Microsoft and Google (See "The future of contact centre - Google, Salesforce, Skype & Microsoft"), but that was primarily from a CRM perspective.


Following VoiceCon this year (which I covered in this blog post), it's clear that so far Microsoft has the most advanced plans for voice of the software vendors. The enabler for this is SIP and OCS 14 leverages a very significant portion of its capability from what SIP enables. It's the capabilities of SIP that that provide OCS with its more interesting capabilities around presence, video and voice integration.

SIP has triggered a very interesting three-way fight. Previously separate areas (voice, data and desktop) are now different aspects of the same question. SIP brings into conflict the legacy voice vendors (with their communications expertise, such as Avaya), the network vendors (who have deep IP protocol vendors, such as Cisco) and the desktop/ software vendors (who understand presence and the desktop, such as Microsoft). It will be very interesting to see who can win this collision of different architectural layers.

Voicecon 2010 Orlando - Microsoft, Cisco, Avaya & SIP...

Most contact centre blogs don't start with Kierkegaard, but his famous quote, "Life can only be understood backwards; but it must be lived forwards", is very applicable to VoiceCon. I find that it is only with sufficient distance from the event (VoiceCon 2010 ran Feb 28th to March 3rd this year) that you can actually get a perspective on what was said. In previous years I've blogged on the main events (see posts like "VoiceCon 2009 - Now that the dust has settled, and IBM and Microsoft" or "VoiceCon 2008 - IBM, Microsoft & Aspect") but this year I want to stand back and take a longer view.

There's a very good summary of what happened on Blair Pleasant's No Jitter blog, and I don't intend to duplicate that here. Similarly, there is some very good ideas for the overall state of the voice industry on Dave Michels No Jitter blog. I'd slightly disagree with his order (I agree virtualisation is very real and very significant, but I wouldn't have put it at number one ahead of the change we're seeing from SIP and the vendor landscape) but I think his sentiments are spot on. Rather, my aim is to think about what was new for contact centres, and what wasn't from a strategic perspective.


Microsoft
This, for me was as important for what wasn't said as what was. There has been a lot of excitement following Voicecon about the release of OCS 14, and most of that is deserved. The capability to do 911, the transcription of voicemails and contextual calling are all nice features for the business user and strengthen Microsoft's case in for enterprise voice/ telephony systems.

What hasn't been commented on so much is the amount of time that Microsoft devoted to the call centre. In the 45mins of the video below, about 9 mins (from about 29mins in to 38mins) a decent proportion of Gurdeep Singh Pall's pitch:

Clarity Connect isn't a vendor I'm that familiar with, but they represent a very interesting Microsoft based approach to the contact centre and the customer service market. I've been previously quite dismissive of Microsoft in contact centre voice (see blog posts like: "Technology firms, Europe and speech recognition") while positive about their CRM Dynamics and CCF offerings (see posts like "The future of contact centre - Google, Salesforce, Skype & Microsoft").

I think my views have changed. Microsoft may not have announced that they are in the contact centre, but there is no doubt about the thrust of OCS 14. Microsoft are a serious voice player and have arrived in the contact centre even if much of the rest of the industry hasn't realised it yet.

Avaya
I think Avaya have to get full marks for managing to make a joke about entropy! It's not a natural subject for comedy, so not mean feat to get a decent laugh at the start of the presentation. The message I got from Avaya was that SIP was the source of profound & fundamental change in the nature of contact centre architecture. I'm inclined to agree and I believe that while SIP may not bring immediate change tomorrow, I think it's likely to fundamentally change how the technology works. Whether or not Avaya will ride this change or be crushed by it (much as Aspect has struggled with IP), I'm less sure. The Avaya Aura architecture looks very powerful, but it is as yet relatively unproven and the Avaya Session Manager is something I need to understand better to have a clearer view on. There's a lot of potential advantages to the Avaya approach and SIP helps explains how they think they can get synergies from their Nortel acquisition. The downside risks, though, should not be underestimated and I feel Avaya still have to negotiate some very tricky changes to achieve their transformation.


Cisco
The contact centre was only briefly covered in the Cisco pitch (from 14mins to 15:30mins in the key note address!) and was focused on the role of social media in contact centre. It was interesting and the role of Twitter, Facebook and so on in customer service is one that excites marketing departments greatly. This will be an area of future activity for contact centres, I have no doubt, but I'm not sure whether it will be a major one. Blog analysis (for instance) has been much hyped and can yield very interesting insights, but only about certain demographics and is still a niche part of analytics. Twitter is perhaps more widely used than blogs and so more revealing but I still think there is a debate to be had as to whether it is going to be a core part of customer service. My suspicion is that where industries are already using it (e.g. airlines) we will see it used by related industries (e.g. rail or toll roads) where customers are disconnected from the PC and reliant on mobile phones. Whether we will see it more widespread than that, I'm not sure.

In short VoiceCon revealed that there are some fundamental changes underway in the voice industry. The organisers have clearly recognised this with the decision to re-brand as 'Enterprise Connect' and I think they are right to. The future looks to me to be about software and communication, and anyone still pushing voice hardware will find it challenging.

Will Broadband make Cornwall a Contact Centre hotspot?

A very interesting article in The Times earlier this week looked at the prospects of high-speed broadband coming to Cornwall.

The plan is that Cornwall, historically one of the remoter areas of England, will receive ultra-fast broadband giving users speeds of between 100 megabits per second and one gigabit per second, making it one of the fastest internet connection areas in the country. The figures to support this are that it will create 4,000 jobs and £250m for the Cornish economy.

Fortunately for Cornwall, this plan does not rely on the UK Government's proposed 50p broadband levy (which the BBC says is scrapped until after the election), but rather on European Union development funds.

The Times article focuses on the benefits this high-speed broadband will bring to 'sexy' industries like digital animation, but I rather think this misses the point and sets Cornwall up for failure. Animation and creative media are growth industries and Cornwall is lovely place, but many of these dynamic, rapidly changing companies will be employing outsiders rather than locals and keeping their head offices in London, especially the media-centric areas around Soho. These companies will put money into the local economy, but they won't necessarily create many jobs for local people. Instead, I suspect that it's industries like customer service that could make the most difference.

It is often not appreciated how dependent the contact centre industry is on bandwidth. It's obvious that you need bandwidth for the volume of voice calls, but less obvious that you need vast amounts of bandwidth for the data that needs to accompany those voice calls so that you can do something useful with them. This is occasionally highlighted by outages (see my past post "Onshore, Offshore & Internet Resiliency" for when a break in sub-sea cabling caused major problems for offshore Indian contact centres) but otherwise not always visible. To a certain extent, the policy of 'build it and they will come' has worked well in other areas. A few weeks ago the Economist ran an excellent article entitled "Fibre in Paradise" looking at the impact optic fibre has had on Bristol, Virgina. The key point for contact centre was,

"...and the fibre brought jobs. In 2007 both Northrop Grumman, a big American defence contractor, and CGI, an international IT consultancy, said they would hire between them 700 technicians, consultants and call-operators at offices in nearby Lebanon, Virginia, part of BVU’s [Bristol Virginia Utilities] fibre backbone. Both cited the area’s universities and low cost of living, but neither would have come without BVU’s investment, which Northrop calls absolutely critical."

It's far from guaranteed, but the likelihood is that if Cornwall wants to create local jobs and boost its economy then building broadband is essential and attracting call centres and back office operations is where they should focus.

The blog is back

Apologies all readers, I've been absolutely laid out with 'flu and not been able to blog for weeks.

I'm back & better now and I've finally got time to blog. The first post should be up and posted tomorrow and I look forward to resuming posting.

Shop direct cut 1,500 jobs - the internet finally takes its toll

It was bad news last week for a lot of people when Shop Direct (one of the UK's largest catalogue retailers) announced that it was cutting 1,500 jobs in its call centres. This is another very big cut, as it was only a year ago that Shop Direct cut 1,150 jobs from their warehousing operations.

The sad thing is that some of these job losses were, perhaps to a certain extent, inevitable.

I was always interested to see how much of their business was phone based (I did do a little work with them some years back). The management at the time told me that for the demographics they targeted with their catalogue the phone was the primary channel of communication. Most of these demographics were mid to lower income people and as a result they did not use the internet extensively and preferred to phone in their orders when a physical catalogue arrived.

I was dubious that this was sustainable indefinitely, but even in the mid-2000s, the primacy of the phone channel seemed to be holding true. It's very interesting therefore to read that in five years the proportion of online sales has gone from 18% to 60%.

My suspicion is that an aggressive bundling of internet and TV solutions by UK service providers (such as Sky and Virgin) has increased internet penetration into demographics where previously internet was seen as either unnecessary or too expensive. The steady fall in price of PCs also probably helps, but I suspect that it is the role of UK service providers that has so fundamentally changed the channel mix for firms that do indirect and distance selling.

The one thing that could have changed some of this is the integration of the contact centre with the web channel. Co-browsing technology is well established, as is click to call and other ways of assisting customers on the web site. There are some startling statistics (anything from 40% - 70%) of the number of shoppers who start to fill a basket on a website but then don't go through to checkout. Offering them help if they get stuck, or an easy way to ask a question, could dramatically improve the number of completed transactions in the web channel. It doesn't necessarily require a huge contact centre but is an example of how a contact centre that adds business value is still very necessary for a business that has the internet at the core of its channel sales strategy.

Google Nexus - the need for a contact centre

Google is generally seen as a very slick operation, which is why this blog is more than a bit surprised to see them miss-step so badly on customer service for the new Google Nexus smartphone.

I understand fully that Google believes it can change the world, and (generally speaking) Google has been right so far that it's technology has changed things. On customer service, though, there is more than a hint of arrogance in Google's idea that customer service should be done the way Google does things, not the way customers want to do them.

Most consumers want to know that their problem is being fixed and that the company takes it seriously. Offering customer service by e-mail and forum doesn't give that experience to customers. For a more technical user group running websites and so on, e-mail and forums can be more than adequate and very cost effective for Google. For a mass market product (even one target at early adopters) it seems to be a unique approach to support. I have no view on the volume of complaints, but headlines such as "Google Faces Deluge of Nexus One Complaints" in PC World hardly do Google any favours or suggest they understand the market they've just entered. Blogs have been even more direct, for example Gizmodo talks of "Nexus One's Lousy Customer Support Shows Google's Weakness".

It's been interesting to see that even web retailers like Amazon, who traditionally have driven as much support to the web or e-mail channels as possible, still see a significant role for the contact centre. It may not be the first level of customer service they offer, but once the first line has failed to resolve the question Amazon do see the need to provide real time, interactive service to customers. Voice is the ideal channel for this, with web chat a distant second and for both a contact centre is ideal.

What makes this particularly interesting as Google struggle with customer service, is the hint that Amazon might be moving into providing contact centre infrastructure for third parties. The story comes from Tech Flash "Amazon.com to sell call center service to other companies? " and wonders if Amazon is looking at customer service as a logical extension to the Amazon cloud services. Given Amazon is one of the leader is web services and these already include storage, relational databases and payment services, customer service would be a logical and very interesting addition.

It would be ironic if while all the attention was focused on Google's customer service failings, the real customer service cloud revolution was quietly taking place at Amazon....

Dimension Data Benchmarking Report 2009

I've always covered the The annual Cisco & Dimension Data Speech survey but I've not focused so much on the Merchants contact Centre Benchmarking report. That's perhaps a mistake as a quick read of this summary of
the latest Dimension Data Global Contact Centre Benchmarking Report would show. The report came out last week so this data on contact centre performance is hot off the press. Here are the some of the major themes and findings from 2009:

A MIXED BAG FOR OPERATIONAL PERFORMANCE - Looking at aggregated operational performance data always requires a degree of license. Overall, we would summarise this year’s operational performance as ‘mixed’ - there have definitely been no great strides forward or any significant decline in standards.

CALL VOLUMES STILL ON THE RISE - Overall call volumes have risen slightly this year, contradicting predictions of the demise of contact centres as self service and contact avoidance initiatives are developed. Growth in call volumes is more pronounced in emerging markets. Since the onset of the Global Economic Crisis there has been a clear shift in the reasons for customer contact.

COMPLEXITY FOR AGENTS - Average Handle Times have continued to creep up but we believe that this is largely down to the migration of the simpler, commoditised transactions to self service channels which continues to increase. This obviously leads to front line agents having to handle more complex interactions that often require a greater degree of empathy, communication skills and access to the relevant information.

STILL WORK TO DO ON MANAGEMENT INFORMATION - Management Information (MI) reported at board level under the guise of Strategic MI is still too focused on service levels. Instead of focusing on the inner workings of the operation, strategic MI focuses on outcomes. We believe this is an issue across the industry and we are still measuring the wrong things for the wrong reasons.

PROCESS OPTIMISATION REMAINS PRIMARY FOCUS - From a customer and agent perspective, the ongoing trend towards more End-to-End Process Automation is good news. Through increasing the number of processes that can be handled within contact centres, hand-offs will reduce as will operational costs.

OUTSOURCING STILL A COST DECISION - While we continue to see the role of outsourcing maturing, the top three reasons for outsourcing are all cost related. Cost remains the biggest driver for adopting an outsourcing strategy, but it is encouraging to see results that indicate a more balanced approach to outsourcing decisions.

CUSTOMER LIFETIME VALUE IS BACK ON THE RADAR - Over the past 12 months there has been a positive indicator trend suggesting that organisations are looking to improve the way they show how Customer Lifetime Value is impacted by customer interactions taking place in the contact centre.

CHANNELS ARE STILL TOO SILOED -Organisations are still not using customer insight across the organisation. It’s a clear and disappointing indicator of the extent of the challenge facing the industry to deliver a joined up end-to-end experience.

WHY NOT MEASURE COST PER INTERACTION? - A third of all contact centres report that they do not measure the cost per interaction of agent assisted telephone calls. When you consider that this is the most accurate means of determining the cost effectiveness of an operation, it is a worrying trend that we have not seen improve in recent years.

SEGMENTATION BECOMES MORE SOPHISTICATED (BUT FEWER PEOPLE ARE DOING IT) - More companies are using increasingly sophisticated methods of segmenting and differentiating their customers. There appears to be a very real desire to generate more value from customer interactions. What is worrying though, is the drop in the number of companies using segmentation.

HOME-WORKING BECOMES A REALITY - The number of home-working agents is generally growing in more mature markets across the globe. A large proportion of respondents are considering home-working, signifying a major shift in approach to employee management, where benefits include lower staff turnover and cost, improved productivity and reduced travel through the use of technology.

HOSTING AND ‘ON-DEMAND’ BECOMES MAINSTREAM - Most contact centres are still owned and managed within the organisation. The number of centres owned by organisations continues to drop year on year. With hosted technologies more secure and easier to manage than in the past, we expect to see an increase in the number of hosted centres due to the economic climate and convenience of the technology.

All very interesting, and probably well worth getting the full report from the Dimension Data/ Merchants site.

Bank Leumi introduces biometric password re-sets for online banking

An interesting story about Bank Leumi on Finextra just before Christmas.

It seems that Bank Leumi will be using voice biometrics for password re-sets for online banking. There are a couple of interesting things about this.

The first is that password re-sets are an absolute pain for helpdesks and similar types of contact centre. Depending on whether this is an internal helpdesk for an organisation or an external facing one, password re-sets can be anything from 50%-70% of the call traffic. The two follow on problems from this call volume are that password re-set is an expensive thing for IT technicians to be spending most of their time on and that they represent a significant potential security risk.

It is this security risk that is the other area of interest. Passwords authenticate you based on what you know, not who you are. Re-setting a password changes that, as it potentially makes the password available to an identity thief. The blog has covered a number of examples of identity theft (this theft from Barclays in 2008 using the identity of Barclays own chairman being a particular case in point) and the vulnerability is obvious.

In theory, biometrics removes some of this risk as it is focused on who you are and not on what you know. In practice things are not so straight forward and this is partly why biometic adoption has been more limited than might be expected. For more detail on the limitations, here's been some good posts on Finextra see "Biometrics - what's that all about then?" by Dave Griffiths and "Who's in your Wallet?" by Jarvis Kandik from 2008.

In Europe I've tended to see biometric deployments mostly for internal password re-sets. A good example that I know of is AIB and VoiceVault who have piloted password resets for staff. The key thing here is that the staff are in a controlled, secure environment and so the biometrics is effectively only one part of a multi-factor and multi-layer authentication.

This is what makes the Bank Leumi example so interesting. I haven't before seen biometrics used directly for consumer authentication for something as sensitive as banking.

I have seen quite widespread use of biometrics outside of Europe and the US and especially for areas like welfare benefits. I got a fair amount of comment to my blog post "BBC Moneybox on Speech Recognition for banking " back in February with examples of biometrics in use from the Philippines (interstingly using PerSay, as does Bank Leumi).



Depending on how the Bank Leumi deployment foes, I may need to revise my last post on the subject "Where are Speech Biometrics in Europe?..... and the Your Call Blog "....!