Tech Hot Spots Fire Up the Financial IndustryBy Bob Violino | Posted 2013-01-07 Email Print
Three key areas govern information technology spending in the financial sector: regulation, customer intimacy/experience/loyalty and cost reduction.
By Bob Violino
Financial services institutions tend to be among the more aggressive users of information technology, which is deployed to improve operations, expand market opportunities and enhance customer service.
Although IT spending for 2012 was slower than first expected for the industry, there are areas of growth, says Rodney Nelsestuen, senior research director at CEB TowerGroup, a financial services research firm in Needham, Mass. Retail banking's IT spending will stay focused on customer intimacy and channel delivery integration for customer experience, he says. Wealth management will become a hot spot for technology spending over the next several years as financial institutions compete for affluent customers and attempt to win deeper relationships and cross sales with them, he adds.
"The hot spot that will impact generally all financial services is in mobile payments," Nelsestuen says. "While this is a newer area, the uptake is rapid, and we see an 18 percent growth in [North America] and Europe." Three key areas govern IT spending in the sector: regulation, customer intimacy/experience/loyalty and cost reduction.
For South Carolina Federal Credit Union (SCFCU) in North Charleston, IT has helped boost efficiency, particularly in improving the balance of its workforce with the demands of its more than 140,000 members.
"Routine transactions are migrating from face-to-face, in-location transactions toward customer-driven self-service transactions that can take place onsite, or through mobile and Internet technologies," says Stephanie Ownby, management information services manager at SCFCU. "As a result, when people contact a financial services organization, it's key to ensure that the most skilled representative is available in order to meet [customers'] needs."
In November 2010, the organization implemented a workforce management system from Verint Systems to increase branch and contact center staffing efficiencies. The main goal of the initiative was to meet service-level targets, while maintaining costs and increasing staffing efficiencies. This means ensuring that the right person is at the right place at the right time in order to meet members' needs, Ownby explains.
The workforce management system uses historical transactional data to project future transactional volumes. The technology has been instrumental in scheduling the variable workforce team, scheduling training and hiring new employees. "We further leveraged the system by integrating it with [the vendor's] phone system and transactional system in order to determine front-line staffing needs," Ownby says.
Among the benefits are a 10 percent increase in workload fit (which measures how accurately staffing requirements are met); a 90 percent reduction in the average speed of answering members' calls to the contact center (down to just 20 seconds); and a nearly 90 percent decrease in the call abandonment rate (to less than 2 percent).
In addition, SCFCU is able to schedule 200-plus sales and service employees within two hours, an 88 percent decrease in processing time. "We can now schedule all front-line employees at one time and have streamlined the scheduling process, where now only one employee schedules all 18 branches in the network," Ownby reports.
The system helps SCFCU deploy "floaters" more effectively. "With visibility to contact center and branch workload and schedules in one place, we can look at everyone's need, deploy resources where they are needed most and achieve much better utilization of the workforce," Ownby says.
BI and CRM Are Top Priorities
For another financial services company, HomeTown Bank in Roanoke, Va., deploying business intelligence and customer relationship management technology to improve processes is a top priority. The bank is deploying BI systems and a CRM product called 360 View from inBusiness Services to help drive customer retention, improve relationships, and increase branch and online banking channel traffic, says Michael Wright, vice president and IT director.
"As we grow our market share, the goal is to leverage existing branch footprints—at least for the next year—to drive profits without increasing significant investment," Wright says. The key driver behind these initiatives "is to maintain our focus as a high-performance, customer-centric community bank [and] increase market share."