When financial institutions first consider the move to Voice Over Internet Protocol (VoIP), it's often for a very bank-like bottom line reason: to save money.
After undergoing due diligence, most decision-makers soon see the opportunities outweigh pure balance sheet considerations, although the VoIP cost-saving proposition is a winning one.
We asked three very different financial institutions to share their stories about making the switch to VoIP, to explain how they are implementing the technology and what doors it is opening for them. Each has deployed Cisco technology within the past four years.
Sovereign Bank, based in Philadelphia, has 3,200 employees on VoIP, and plans to roll it out to the remaining 6,000 as its existing PBX legacy system contracts expire. The VoIP conversion supports the company's aggressive expansion from Pennsylvania into the mid-Atlantic region and New England.
Bank Midwest is a small, nine-branch bank that "wows" its customers, executives and vendors with its deployment of VoIP. Visitors to their offices are often surprised to see Cisco phones-like the ones they recognize from TV shows and movies-operating on the desks.
El Dorado Savings Bank is a community bank in northern California that takes a conservative approach to technology. Its leaders investigated VoIP when the bank's legacy PBX system became older than some of its tellers-and increasingly expensive to maintain. Now fully VoIP-enabled, El Dorado has boosted productivity: tying together 32 branches, creating "virtual call centers" and delivering homegrown services with the latest technology.
Here, then, are the stories behind each bank's adaptation of VoIP to their unique needs and circumstances.
Lower Costs, Extension Mobility, Unified Messaging
A prospective move precipitated Sovereign Bank's investigation into VoIP four years ago, says Domingo Martinez, senior vice president. Today, about one-third of the company's 9,000+ branch office and operations employees are served by VoIP.
"It's a total cost of ownership driver," points out Todd Dierksheide, Sovereign's senior network engineer. "IP telephony is an opportunity to drive down costs, and to leverage the level of expertise with the technology we already had."
Indeed, MACs (moves, adds, changes to the phone system) can be programmed in-house, rather than requiring a technician-as the old PBX system did. Routine maintenance is less expensive, too, because it is a matter of maintaining a server, rather than keeping multiple PBX boxes humming. Data, voice and image capabilities can be carried over one cable, too, rather than multiple lines.
Most employees, of course, are unaware of maintenance. What they appreciate are features like extension mobility, which allows anyone who travels among offices-such as commercial sales agents-to log in using an IP phone, and directly receive calls anywhere.
Unified messaging, which enables employees to hear their messages on their desktop and to read email on their phones, is another hit. "A lot of people see it as getting an increase in productivity. It makes things easier for them. Now, they feel they couldn't live without it," reports Dierksheide.
From an executive's viewpoint, Dominguez appreciates increased speed to get the job done. "We can put up a call center in a matter of days now," he says, citing one the bank opened recently with 200 employees.
Keeping the 'Community Touch' with 21st Century Technology
With headquarters 10 miles from where gold was discovered in California, El Dorado Savings Bank serves 32 small branches.
"We're often the only bank in a small community, and everybody knows everybody," says Russell Langley, El Dorado's CIO. Customers count on personal service-on the phones and in person. With only four or five employees per branch, it can be difficult to deliver both.
"We get a lot of calls like, 'What's my balance today?' and 'Did my check clear?' We have Internet banking, telephone banking. We don't penalize our customers for direct contact. Part of what we wanted to do with IP telephony is to pick up a call at the main office, so tellers don't have to be taken away from a line of customers," explains Russell Langley, El Dorado's CIO.
By routing calls using VoIP to the main office, bank employees can answer with the appropriate branch name, find out what the caller wants, then answer the question or, if necessary, transfer the call to the correct employee back at the branch if it's a specific need that only he or she can fulfill-"like tracking the status of a loan, or ordering tickets for a community-sponsored spaghetti dinner," says Langley.
Ultimately, branch employees are giving better attention to the customers who are in front of them.
Now El Dorado is branching out with converged IP capability by putting digital video surveillance cameras in several branches. "You can pull security surveillance images across the same data lines" he explains.
VoIP: Proven Technology
For Bryan Wilken, Bank Midwest's vice president/IT officer, VoIP helps leverage the expertise of loan specialists in branches that may be dozens of miles from the customers who are interested in that particular type of loan.
In addition, IP telephony brings together 175 employees working in southern Minnesota and northern Iowa so they feel they are virtually under one roof.
That kind of convenience is a "soft benefit" beyond the proven cost savings the bank has realized in long distance charges annually since its beta site opened in December 2001, and the full roll-out in 2002.
A self-avowed "early adopter" of VoIP technology, Wilken appreciates what it has done for his personal productivity as much as for the bank's.
"When I travel, I bring along my notebook computer and connect back into the main network. I can bring up what's called the Cisco soft phone, and then I can place and receive calls as if I'm back at my office. I can check voice mail. I've used this in Florida, and the quality of calls is as good as if I were sitting at my desk," he says.
Reliability, Security and 'Getting the Bugs Out'
Wilken chose Cisco's Remote Survivability technology, which enables the bank
Power outages occasionally hit California, particularly in small towns in the winter. Langley at El Dorado says the Cisco technology has performed well under those conditions. "Everything works the way it should," he says.
When some echoing problems occurred during the initial installation several years ago with an earlier version of the technology, Cisco replaced all the parts at no cost to El Dorado. "They took care of it, though there was no contractual obligation to do so," says Langley.
At Sovereign, security of the VoIP service has passed the test. "We haven't had any reports of security breaches, and we do monitor for that. We haven't had any reports of eavesdropping, and now calls are encrypted," says Dierksheide.
Future Possibilities: Converged IP, More
Each bank is beginning to look at ways it can adapt this highly flexible converged IP technology (over which VOIP runs) for new benefits in the future.
Bank Midwest want to add video conferencing to run over its converged
IP network so investment representatives can conduct face-to-face meetings without having to travel two hours one way to do so.
Wilken also wants to explore the decentralized call center concept, which in practice would look something like El Dorado's routing of calls to any available employee.
At El Dorado, increased security surveillance might be the next application.
Sovereign is looking to take advantage of more applications that can be built into the phone-such as integrating the corporate phone directory, or delivering rate sheets over the phone.
As Dierksheide says, "There's a lot of opportunity, and we're just starting to tap it."
Cisco Footnote: VoIP adoption is becoming "SOP" within the banking industry, from the largest institutions-like Bank of America-to the smallest. All are enjoying the benefits that the three banks in this article have articulated. The question of VoIP adoption in banking is not "If" but "When!" To learn more, visit us online at: www.cisco.com/go/banking.
