Contact Center Solutions Featured Article

Economic Uncertainty Heightens Need for Home-Based Model: Turning to Virtual Call Centers for Help

December 14, 2009

The past few years have not been good for the financial services industry and financial institutions continue to navigate through some pretty rough waters. U.S. consumers are burdened with over $14 trillion in mortgage debt, in addition to $2.5 trillion in non-mortgage (i.e., auto loans, credit cards, etc.) debt.

 
Delinquency and default rates have skyrocketed, with mortgage delinquencies now over 9 percent – up from 2 percent in 2007 – and credit card delinquencies now over 6.5 percent, up from 4 percent in 2007. The money pressures facing consumers continue to ripple through the financial industry. According to the FDIC, the number of “problem” banks grew to 552, the highest level in 16 years. On top of this, recent legislation will limit future profitability in the industry and make it difficult for even credit-worthy individuals to borrow money. 
 
In this difficult economic environment, the plight of consumers is causing financial institutions to reevaluate their outsourced call center relationships. Although there’s not an easy fix, many companies in this industry have realized that improving customer service and reducing costs is a key component in their recovery. In fact, over the past 12 months I have seen a significant increase in the number of financial service companies evaluating the use of virtual call centers. 
 
According to internal Alpine Access data, more than 75 percent of Fortune 500 financial services companies, including retail banks, credit card companies, mortgage providers and insurance carriers, are currently using or are considering using home-based customer service agents. More specifically, leading financial institutions are utilizing home-based agents to handle account inquiries, bill payment and processing, balance transfers, account origination, product/service selling and collections.
 
This trend isn’t surprising when you consider home-based agents are proven to deliver higher quality service at a lower cost, especially for businesses requiring high-touch, complex customer interactions. Working with an at-home call center allows financial institutions to strengthen their existing customer service without extensive capital investment. Additionally, outsourcing to a virtual call center provides the security and operational efficiency needed to remain successful.
 
Better Quality Service

As many readers know, virtual call centers can hire from across the country rather than from the 30 mile hiring radius of a typical brick-and-mortar call center. Eliminating geographical boundaries allows virtual call centers to hand pick agents with the perfect match of skills and experience. As an example, consider a Manhattan bank looking for agents with financial and customer care backgrounds living in New York. Innovative technologies and processes enable virtual call centers to filter, test and screen thousands of qualified applicants all in a matter of minutes. Once hired, the latest e-learning techniques have proven to reduce training time by an average of 20 percent and lower class attrition by about 17 percent. Through its nationwide geographic footprint, high volume of applications, and automated processes, the virtual model can recruit and train agents at a 30 percent savings compared to traditional B&M centers.
 
Security
 
Handling sensitive personal information is serious business. Due to regulatory and consumer protection issues, securing consumer information remains a primary concern for the financial services industry. Consequently, it is also a main reason many of these organizations choose to outsource to virtual call centers. Virtual call centers use the most advanced technology to connect thousands of dispersed agents. While some may think this opens them up to more security issues, in reality, virtual call centers are able to keep information more secure than traditional B&M centers. Some companies, like Alpine Access, are Level 1 PCI DSS compliant as certified by third party audits. This means investments have been made to implement a stringent combination of security policies, technology and network changes, minimizing the potential for fraud and reducing system exposure.  In addition, companies like Alpine Access secure agent computers through a remote desktop solution that essentially “locks down” client information.
 
Operational Efficiency

Another reason financial institutions look at outsourcing to virtual call centers is to reduce costs. Traditional call centers are expensive to operate. According to multiple industry studies, it costs anywhere from $10,000 to $20,000 per seat to equip and maintain a B&M call center. With the virtual model, these fixed annual expenses largely go away. However, the savings on the labor are even more compelling. Through a combination of more productive agents and more efficient scheduling, virtual contact centers often require fewer agents than comparable B&M operations. In addition, at-home agents are typically willing to accept lower pay in exchange for the flexibility and benefits of working at home. Combined, these advantages can save companies 25 percent to 30 percent compared to the cost of operating their own B&M center.
 
It’s no coincidence that financial services companies are adopting the use of virtual call centers faster than almost any other industry in the world. Not only can the model help to address the challenges they face, but it can also help these businesses streamline operations, as well as magnify the revenue and profitability of their customer interactions. Especially in a tough economic environment, the value of the virtual call center model can’t be ignored.

Rob Duncan is COO of Alpine Access, Inc., a Denver, Colorado-based provider of contact center services using exclusively home-based customer service and sales employees.Duncan can be reached at 303-279-0585.

Edited by Erin Harrison



Home