The Provident Bank Doubles Cross-Sales Services with PRODUCT4

Bank Technology News

by Shane Kite
Original Article

Service On-line: Even House Calls Are A Retention Play
Firms ranging from Citibank to Provident are rolling out bells and whistles to save business in the finicky channel. One institution is even making visits to set up accounts.

By Shane Kite

Quick options are the very nature of the Internet, and the transitory and finicky nature of the channel is leading institutions to pull out all the stops-everything from instant messaging and customized conversations to house calls-to keep customers from clicking to another bank and taking their business elsewhere.

One institution, The Provident Bank of New Jersey, is using St. Louis-based PRODUCT4's Snapshot software to customize its sales efforts. The Jersey City, NJ-based bank has integrated Snapshot with its core processing system, Horizon from Alltel Information Services, to boost CRM capabilities across products, including interest rate and credit line discretion. Snapshot derives customer propensity from transaction data and feeds it to sales and customer service staff.

The platform enabled Provident to increase its cross-sales to 2.4 "services per household" from 1.3 prior to Provident's integration with merger partner First Sentinel Bank, says Gregory French, svp at Provident Bank. Plans call for converting Sentinel branches to Snapshot as well.

Another institution, Wachovia, has enabled on-line chat between its mortgage customers and the bank's mortgage specialists during the loan application process. The bank found that during a three-month pilot with Kana's Live Response platform, applicants who clicked on links enabling and promoting the chat capability were 25 percent more likely to close their mortgage with Wachovia. Prospects can use an instant messaging system to ask questions when perusing the site for loan rates and during the application process, as opposed to having access to only phone-based service or support.

"The Internet has been by far the most prevalent means for consumers to gather information before they make a decision about a lender," says Gary Suess, Wachovia's director of direct lending. "A relatively small percentage of them actually transact on-line, but we believe the reason for that is the complexity of transaction. So we're trying to position ourselves to provide as many options and real-time assistance as early in the process as possible."

Most customers seek some sort of "human validation" before entering into a large transaction on-line, says Joan Sommerer, vp of strategic solutions in Wachovia's mortgage unit. "Chat helps them get over that hurdle," she says. Wachovia is expanding the IM capability to its home equity line as well.
A much smaller institution, Mullins, SC-based Anderson Brothers Bank has taken to making house calls to help corporate and retail customers set up on-line accounts to manage their cash. According to BTN sister publication American Banker, which reported on the effort last month, Anderson Brothers is using this degree of customer service to boost its new on-line banking channel.

It's clear that the need to differentiate and improve on-line banking services for Web-savvy customers has become a mandate. A survey commissioned by Accenture found that on-line banking customers were the most likely to switch institutions among the 503 consumers interviewed by Nelson Sofres (TNS). A switch-rate Accenture tabulated was 20 percent higher for online customers than it was for those identified as branch-going users.

Perhaps more interesting, however, was that fully two-thirds of respondents said they would welcome more information about additional services. Only 6 percent of those interviewed described their bank as trying "too hard" to sell them products.

This seems to imply that banks may be underweighting the sales aspect of customer service, potentially missing out on marketing opportunities which, if done smartly and carefully, could generate additional revenue.

Banks have avoided aggressive sales tactics to keep top in the minds of consumers their image as benign, service-oriented, customer-centric institutions. Yet, if a majority of these same customers are open to hearing about more service, the Web channel -which by its nature is a self-directed medium aimed at self-directed users- could provide the least intrusive path to reaching them.

Citibank has taken the lead by promoting a set of rewards programs on its site linked to the credit cards it offers. The packages are also marketed to online accountholders whose cards may lack access to such programs. Besides air travel, the site offers cash back rebates on car loans, mortgages and college savings programs. "Reward programs get at the retention issue-the switching dynamics that may be caused by the ease of Internet banking," says John McHugh, managing partner for CRM in Accenture's banking, insurance and capital markets group. The Internet has emerged as the most efficient tool for measuring the impact of banks' product innovations and sales initiatives on customers. Banks both large and small are adding real-time customer research capabilities.

"The Internet enables a much more tailored approach for banks in measuring growth, loyalty and satisfaction and results regarding revenue and profit per customer," says McHugh.

(c) 2005 Bank Technology News and SourceMedia, Inc. All Rights Reserved.

PRODUCT4, Inc., founded in 1991, is a leading developer of software products and services, which assist financial institutions to use technology to meet business goals. Its suite of products includes solutions for Teller, New Accounts and Service Platform, Loan Origination, and Call Centers, as well as robust Customer Care (CRM), Sales Incentive Tracking, Reporting, and Imaging Functionality. The company's systems have been installed in over 130 financial institutions throughout North America and the Caribbean and support over 6,500 bank branches.

Other product or service names mentioned herein are the trademarks of their respective owners.