Electronic Delivery: The Communication Method For Funds In The 21st Century
Customer service communication methods have grown exponentially over the history of the financial services industry.
The 70s boasted face-to-face, personal sales and service, allowing customers to “touch” and thus trust the companies with whom they conducted business. As the pace of life accelerated, sales and service via telephone became an additional accepted method of consumer communication in the 80s.
Major financial service companies quickly expanded this service to 24 hours. Currently over 35% of business is conducted during non-business hours.
The 90s brought the age of Voice Response Units, and customers are now comfortable conducting 30% of their business without human intervention.
During each evolutionary phase of customer contact, financial service companies worried that prior communication methods would become obsolete or diminish in value. Interestingly, all communication options are alive and well. Giving customers choices simply increased retention, brand loyalty and the number of times they communicated with their financial service providers.
In the 21st century, over 50% of American homes possess one or more computers. Consumers are becoming more and more comfortable conducting business and communicating with their providers electronically, especially with the purchase and service of mutual funds and variable annuity products.
Although a majority of the major financial firms provide Web sites that offer sales and marketing information and the ability to perform simple transactions, few provide customers the option to receive full service electronically.
The advantages for customers are numerous: They are able to access current, compliant information at their command, 24 hours a day, 7 days a week. For customers with laptops, cell phones, e-mail and PDAs, this convenience extends to anywhere in the world.
Electronic communication can be a distinct advantage. How many of us have been caught in the proverbial telephone “queue purgatory,” knowing we cant afford to stay on the line but cant afford to hang up after waiting 15 minutes? E-mail can fulfill the same need without inconveniencing the customer. An answer can be provided immediately, or customers can be alerted as to when they will receive a response, saving precious time and eliminating aggravation.
Most importantly, customers are able to receive compliance materials electronically, eliminating the need to receive and store bulky documents. These documents include annual and semiannual reports, statements of additional information, fund fact sheets, confirmations and prospectuses.
For instance, one major companys variable annuity annual report is over 700 pages. Electronic delivery allows a customer to quickly and easily focus on areas of interest and then archive those sections on a hard drive or disk. Once reviewed, they may also simply delete the document.
Lastly, the environmental concerns of paper delivery and elimination weigh heavily on customers minds. This consumer concern should not be taken lightly. Consumers do not want to be part of the current “waste cycle.”
As a case in point, one major financial services company ran a “Do You Want To Save A Tree?” campaign, attempting to increase the consent of customers who might elect electronic servicing. They received a 12% positive consent response rate. The campaign was an overwhelming success and far surpassed typical campaign results.
The advantages to financial service companies are also numerous (see box).
Todays consumers are multi-dimensional in their communication needs. A customer may have a broker, an online account and conduct other business by telephone. Electronic delivery not only addresses multiple customer segments but also individual customers multiple needs.
Companies must meet consumers in the space where they are comfortable. Control and choice are the needs and demands of consumers in the 2000s, and firms must offer both to attract and maintain them.
As in the past, new and innovative means of customer servicing require change and effort on the part of financial service companies. Electronic delivery falls into this category. Companies have the option of building the required infrastructure internally or outsourcing from a third party vendor who specializes in this niche service. Off-the-shelf solutions are affordable and installation is fast and reliable.
Whichever method a company selects, it is paramount to understand that electronic delivery is here, and here to stay. And, as with other decades, the need is and will continue to be driven by consumer demand.
is managing director, global investor services for NewRiver Inc., a provider of e-delivery services for the financial industry. She can be reached at firstname.lastname@example.org.
Reproduced from National Underwriter Life & Health/Financial Services Edition, September 24, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.