Webchat - supporting online banking self serve revolution

The banking industry is now firmly focused on driving down costs. The ‘big five’ banks actually saw their profits slump 40% on the previous year. The causes for this decline in revenue are complex and various, but include PPI costs as well as fines and penalties from regulators.

In this challenging economic environment, one way banks are aiming to reduce costs is through encouraging customers towards online self service. Banking websites that offer online mortgage quotes or detailed FAQs around business banking can help solve problems without the involvement of a live agent. But self service can leave customers frustrated. For every customer who satisfactorily self-serves and achieves the answer to their question, there are a significant number who abandon their transaction. Webchat – communicating with a customer service agent via an online dialogue in real time – creates a positive experience for customers, and can reduce call and email volumes, while at the same time encouraging and supporting customers to self-serve.

Leaders in the industry have not been slow to pick up on the advantages.  Web chat has been found to be particularly effective for high-value financial services such as loan, investment and deposit products where customers usually require a little more advice and guidance. Citbank says 90% of its web chat users complete a home-equity loan application while Bank of America partly attributed an eight-fold increase in online mortgages and a doubling in home equity volumes to web chat.  Bank of Scotland uses web chat as an integral part of its share dealing offering while Wells Fargo, another early adopter of web chat, noticed a double-digit increase in online conversions for home loans after introducing a live chat option back in 2002.

So, while webchat has been around for a number of years now, early adopters have, over time, learned important lessons about how to use it most effectively. Web chat buttons need to be positioned in the optimum places on the website to support customers who want to self-serve. Intelligent rules identify customers who become stalled in their transaction and who may abort the transaction without help. The latest report from cloud-IQ, has found that 70 per cent of people abandon their online shopping cart before completing a transaction, so this is a very high risk area and one which needs special attention.

Banks also use webchat as a platform in their call and email deflection strategies; its objective is not only to drive down costs but to resolve customer queries faster which will also improve customer satisfaction levels. There is no doubt that staff who are handling multiple chats simultaneously, as opposed to one phone call at a time, are able to improve the speed at which customer queries can be dealt with as well as significantly bringing down their cost. Research from LivePerson indicates that sales generated through web chat cost 60% less than phone sales.

The latest evidence also shows that web chat can deliver a high rate of sales conversions – a prized goal for all financial institutions with a product range.  Research from LivePerson indicates that website visitors who chat are three times more likely to buy. This is because customers who choose to engage in web chat do not view it as a sales-related conversation, but as a conversation with an expert assisting them in finding what they need. Consumers, when deciding on a purchase, may have a query about a particular piece of information such as specifics on the functionality of a mobile banking app, details of an insurance policy clause or the latest on savings interest rates, and such queries can often be clarified and resolved quickly via an online conversation, enabling the purchase to be secured instantly.

Our own research shows that customer acceptance of web chat grew by 15% between 2009 and 2012. Our research also revealed that the acceptance of proactive invitations to engage in web chat grew from 45% in 2009 to 66% in 2012. Customers are becoming more accustomed to web chat, find it helpful and are increasingly inclined to use it. Insurance company Aviva said that nearly 25% of its contact volume has shifted away from telephone and email to web chat, resulting in operational savings of over £1 million a year.

The greater acceptance of web chat means that smart financial institutions can use it to learn more about their customers. Webchat software can now be easily integrated with customer intelligence platforms to gain crucial customer insights into issues such as how their customers make purchasing decisions, and when and where during the purchasing chain they are most receptive to influence. Unlike phone calls, web chat leaves an immediate and crucial written record of customer interactions which can be mined for such insights. As a greater number of web chat transcripts become available, the pool of information about existing customers’ behaviour will grow.

The greater acceptance of web chat will prove to be a major platform in financial services’ online strategies that can not only reduce costs and improve customer satisfaction, but can also design the right messaging for the right channels at the right times, giving their message the greatest possible impact and influence.