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Customer Service 2.0: The Importance of Live Chat In Banking

For more than 40 years, financial institutions have actively pushed consumers into to self-service channels — from phone banking and ATMs decades ago, to online and mobile banking today. As banks and credit unions have been busy implementing one technology after another, something got lost along the way: personal interactions.

The internet’s overall affect on banking has been generally positive. However, banking consumers today have less stake with financial institutions. The relationship is missing, so they see their bank as disembodied (at best), and potentially untrustworthy (at worst). How do banks and credit unions reinsert the personal touch in an online environment? The answer: live chat.

How Live Chat Works

A consumer who’s interacting with a financial institution online — whether that be browsing a website, reading an email, looking at an eStatement, or visiting a social network — sees a button or pop-up window asking them, “Need any help? Chat with us now.”

The user clicks the button to initiate the chat. A simple form asks for some basic information, which is used to route the inquiry to the right person. Simultaneously, the customer’s history loads on the representative’s end, putting their question in context.

A window pops up on the customer’s screen, the appropriate service rep enters the chat, and a real-time dialogue ensues.

[Please note: For previous coverage on the subject of live online chat, please see The Financial Brand’s previous article here.]

The Next Logical Step in Online Services

Consumers increasingly expect financial websites to deliver the same experience and a similar level of service as they encounter at shopping- and other retail ecommerce sites. This applies particularly to live chat, which consumers have now embraced.

When a customer runs into a problem online, their first reaction is to back out. To put it bluntly, leaving customers with questions unanswered when they’re in the middle of a transaction is like giving them a link to your competitor’s site.

An ecommerce study conducted in 2011 found that some 83% of those who had used live chat agreed it should be made available on every page, and 23% had actually abandoned a website because it lacked a live chat feature.

Among customers who prefer live chat:

  • 77% said, “I get my questions answered immediately”
  • 52% called it “the most efficient communication method”
  • 43% preferred live chat because it let them multi-task
  • 40% said, “Once I used live chat I realized how well it works”
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A hidden benefit is that live chat lets customers discuss sensitive information at work or in public without being overheard. They can type out questions about banking matters while in settings where a phone call might be uncomfortable, inappropriate or otherwise scrutinized by those within listening distance (e.g., an employee’s ever-watchful manager).

And most importantly, live chat allows website visitors to stay in their channel of choice. You want to do everything possible to encourage people to stay in online- and self-service channels as long as possible. That means answering any questions they may have while they are browsing your website.

“When customers have questions that can be answered on the website, chat reps help them navigate to the appropriate page as well as paste links that take the customer directly to the answer,” notes researchers at Forrester. “This not only provides answers in context, but also teaches customers where to find the answers the next time they need them.”

In a survey encompassing some 300 banks and credit unions, The Financial Brand found that only one in five financial institutions currently has live online chat deployed. Surprisingly, 59% don’t, while another 18% might not have it at this time but plan to soon.

Bolster Profitability, Cut Costs

Live chat is the next step in online services, as it drives conversions, cuts costs and boosts satisfaction scores. It combines approachability with human interaction in a remarkably implementable way, with very little technical setup; most systems don’t even require end-users to download anything. Simply put: the infrastructure is manageable for nearly every financial institution in any asset class.

Wells Fargo was a pioneer in the use of online chat. In 2002, the bank’s online conversions were lower than desired; its applicant approval rates, suboptimal. It also felt a need to inject human assistance into the shopping process. In response, it implemented live chat.

The results were not only high satisfaction scores, but a double-digit bump in conversions. Customers who chatted were approved at a higher rate; they also generated higher loans balances than those who didn’t. With the launch of live chat, Wells Fargo’s online home equity conversation rates jumped from 30% to 40%.

Then there are the cost efficiencies. A good live chat agent can handle 2-3 conversations at once — even more — while a phone operator can take only one call at a time, period. When Scandinavian Airline System implemented Netop’s Live Guide, they found their live chat service reps could actually accommodate five to six chats in the time it took to complete one phone call.

Aviva, an international insurance company, said that nearly 25% of its contact volume shifted away from telephone and email to live chat, resulting in an operational savings of over £1 million per year (about $1.6 million USD).

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Insights to Improve and Refine Internal Processes

Because it records conversations for later analysis, online chat also provides insight into the needs and problems that impact customer banking relationships. You can identify areas your management team needs to address simply by scanning transcripts.

An institution’s chat history represents a cumulative treasure trove of information that can be harnessed to design everything from training initiatives, website improvements, new products, etc.

Some organizations continually analyze their chat data, reaping insights about what customers don’t understand in a self-service environment. Based on the data collected from live chats, a company might decide, for instance, to build an online FAQ library addressing particularly troublesome topics.

NETOP ‘LIVE GUIDE’ ADMIN INTERFACE
The admin dashboard for this live chat service features a robust reporting system.

The Importance of Video

While text-based chat is fairly common these days (some banks and credit unions have deployed live chat for nearly a decade), video chat is still an emerging technology. Most customers are unlikely to have encountered it, putting it on the leading edge of customer service strategy.

From the aesthetics of representatives’ workspaces (“staging”) to the equipment required (directional microphones, lighting, etc.), video chat requires more work. Nevertheless, this is the future. As bandwidth and technologies improve, video chat will become the face-to-face iteration of online banking, and potentially more important than text-based chat is today.

Organizations that position themselves as innovative and value being ahead of the curve are already moving in this direction. For example, one financial services firm deployed live video chat to connect advisers with customers facing financial challenges. And Denmark’s fifth-largest bank, Nykredit, deployed their Live Guide video chat service back in 2007.

“Customers have varying needs and varying wishes as to how they want to be served,” said Thomas Egede Kragh, assistant director for digital channels at Nykredit. Where it comes to “personally sensitive issues such as finance, personal contact and trust are crucial,” he explained further.

“With video chat, it is easy to determine whether the customer’s problem can be solved online or whether it would be better to get together in person,” Kragh added.

As video matures from “cutting edge” to “mainstream,” more and more customers will come to expect it. Even for financial institutions that aren’t prepared to launch a video channel immediately, awareness of the service is important, and banks and credit unions would be wise to plan accordingly.

That means choosing a chat provider who has (or will soon be offering) video capabilities. Netop’s Live Guide, for example, supports text, audio and video chat across a variety of channels: websites, emails, social media and eStatements.

Netop latest version of Live Guide includes remote assistance and remote viewing capabilities. These features make it easier for banks and credit unions to assist customers remotely by viewing their desktops and aiding in common questions or challenges customers face online.


This article was written based on material provided by Netop, a  global provider of live chat solutions for financial institutions. You can download their complete whitepaper on the importance of live chat in banking at their website here.

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All content © 2014 by The Financial Brand and may not be reproduced by any means without permission.

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Comments

  1. I think we can all agree that live chat is an important option in banking as a means of delivering personalized service in the online channel. But there are other channels that customers/members are using that can’t be ignored. For example, according to the 2011 report Bankers as Buyers, consumer mobile banking adoption jumped from 19 percent to 30 percent in 2011. People are using their mobile devices to interact with financial institutions, retailers and friends. And there is always the more traditional group who will always rely on the phone.
    Implementing technology that can address all four channels to deliver a superior customer experience is what banks and credit unions need to adopt. Imagine being able to provide the same level of superior – personalized – service to your customers/members no matter how they choose to interact with you.
    Personetics is one such company that can deliver on that promise. Personetics Digital Banker uses a financial institution’s customer profiles and data analytics to predict why a customer/member is contacting the FI – no matter what the channel – web, mobile, SMS or IVR. The solution presents a personalized conversation that assists the consumer with the issue and provides a relevant solution. In those cases, where the issue has to be turned over to a live agent, a complete transcript of the conversation is sent along so that the user doesn’t have to repeat anything.
    But it doesn’t stop there. The ability to mine the data from every interaction is available. Every conversation that touches Digital Banker is saved as a transcript that can be used for trending analysis, experience improvement and cross sell opportunities.
    Financial services providers also have to look at the other channels their customers/members are using and find a solution that will consistently deliver a superior customer/member experience with better economics.

  2. Stephen Diedler says:

    While I agree with the article that live chat is definitely the way ahead, be it the financial sector or any other entity offering a product or a service, but I don’t agree with Netop as the best choice. I would personally recommend ClickDesk live chat, which is miles ahead of Netop.

  3. Stephen, the article does not recommend nor endorse Netop, and certainly makes no mention of Netop as “best choice.”

  4. Stephen Diedler says:

    Thank you for the clarification, kudos to you for not endorsing it. As I’ve mentioned before ClickDesk is excellent.

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