In an era of hype surrounding the emergence of the information superhighway and the ability to access financial and information services through personal computers, televisions, screen phones, and other communications devices, telephone banking looks rather passe.

Yet, many banks continue to invest heavily to enhance it.

According to a study of 150 of the top bank-holding companies in the United States sponsored by American Banker, Andersen Consulting, and the Tower Group, more than $1 billion will be invested in retail delivery channels annually during the next three years; $176 million of that will go to improving telephone-based services.

"We'll continue to see investment in this channel," said Daniel R. Pfau, a Boston-based partner at Andersen Consulting. Although banks are moving toward electronic delivery of services, the telephone is at present the first way into consumers' homes, he said.

Most banks already have some sort of telephone infrastructure in place, he said. adding that "it's easier to enhance the infrastructure than start from scratch."

In addition, virtually everyone has access to a phone. Phones also give customers access to services from locations other than their homes. Banks can also easily offer telephone banking because it is relatively low-tech compared with other delivery channels.

Retail telephone transactions initiated by customers are expected to increase 65% in the next three years, the study found.

Andrew Mayer, a New Yorkbased senior manager, financial service industry consulting at Ernst & Young, attributes much of this growth to the progression of technology. Automated voice response units enable customer inquiries to be handled more efficiently, he said.

In addition, banks are moving beyond typical customer service, he said, to providing full branch service over the phone. Today'S phone representatives are Opening accounts, taking loan applications, selling investments and other products, and providing financial planning assistance. In many cases, customers can do everything short of getting cash that they would be able to do at a branch, Technology is forwarding this trend, Mr. Mayer said. Banks now have the ability to connect disparate systems, enabling telephone representatives to tap into multiple sources of in information to service cus tomers quickly. The systems enable agents to track relaionships ships with customers through recent correspondence and histories of conversations.

While virtually all big banks have had some son of telephone service in place for years, it's only recently that some have upgraded the service to do more than answer simple inquiries. In many centers, like the one at Centura Banks Inc., in Rocky Mount, N.C., there's a new emphasis on sales.

The $4.1 billion-asset bank has had basic toll-free phone service for its customers since 1990.

Recently, Centura invested $1.5 million on telephone switching equipment and a voice-response system to upgrade its telephone center. But, aside from the technology, the most significant change at the center is the people staffing the phone lines.

"They went from customer service representatives to financial service officers," said Kristen D. Williams, vice president and alternative delivery manager at the bank.

The result was Centura Highway, launched last month. Customers can open deposit accounts and apply for loans, credit cards, and overdraft protection. By October, the bank plans to offer investment products.

Ms. Williams said the objective of the center is to sell financial services and assist customers with financial planning. The bank uses an auto-response unit, with both touch-tone and voice access, which handles simple customer inquiries. The unit handles the majority of the bank's call volume: about 7,400 to 11,000 calls a day, Ms. Williams said.

The live officers handle from 700 to 1,100 calls a day, and as more financial products are offered, bank officials expect that number to increase.

Ms. Williams said they started Centura Highway to satisfy customer needs.

"Many of our retail customers conduct a lot of their business and shopping from home," she said.

Bank officials were surprised by the sheer volume of calls they've received to the automated unit without any promotion. The bank hopes to start promoting Centura Highway in the first quarter of next year, when they will be offering a full line of bank products and providing expanded hours.

"We've come to the conclusion that it's a much more effi'cient way for us to do business," Ms. Williams said.

It's still "too early to tell" how well Centura Highway is doing in sales compared with the bank's branches, Ms. Williams said. "Our future is dependent on the success of this unit," she said. "Banks will grow through this type of business rather than through traditional branches ."

Like Centura, Boston's BayBanks Inc. is attempting to cash in on a growing customer segment.

To cater to the home-shopping minded, the $10 billionasset bank-holding company sends out a 50-page catalog describing the features and benefits of its full line of products to more than a million households in Massachusetts. Customers interested in products simply call an "800" number to buy.

The catalog is part of BayBank's aggressive promotion of its telephone banking service, said Laurence I. Mariasis. senior vice president. Whenever the bank runs television, radio, or print ads, it also runs the telephone banking number, encouraging customers to call to open accounts.

"Once the person calls and experiences the convenience, chances are he'll call again," he said.

The 24-hour phone center, with 400 sales and service representatives and an automated system, handles about a million calls a month, "evidence of the success that we've had," Mr. Mariasis said.

More evidence is in the volume of sales the center has done since selling through this channel began in 1992.

"Through the phone, we do the equivalent in sales of about 30 branches," said Mr. Mariasis.

Ohio's Huntington Bancshares is also selling more products over the phone.

According to Peter Geier, senior vice president and executive director of consumer services, the $16.5 billion-asset bank-holding company, based in Columbus,. always had the typical customer service lines. About two years ago, they recognited the changing patterns of consumer. shopping, realizing that fewer customers were coming into bank branches. It was then that the bank made a commitment to "direct access," said Mr. Geier, the primary linchpin being Huntington Direct, a fullservice telephone center that began operating in 1993.

The 24-hour center handles 300,000 calls a month, half of which are answered by an automated system. The other half are routed to a live personal banker.

About 12% of the center's calls result in the sale of a bank product, said Mr. Geier, including loans, deposits, mutual funds, and mortgages. Half the bank's direct consumer loans, including credit cards, installment loans, secured credit lines, and checking overdraft protection, are sold through Huntington Direct, while 30% of its automated teller machine cards, checking accounts, and investment products are sold through this channel.

Gary B. Myers, vice president and manager of Huntington Direct, said the 'success of the center lies, in pan, in its work force.

"We look for people with a retail sales background," he said. The agents are used for solving customer problems, answering questions, and then using the opportunity to sell something, he said.

Twenty-four hour operation is also a critical component of Huntington Direct, said Mr. Geier. Forty percent of calls to the center are received during nontraditional hours, such as nights and weekends, he reported. "We get people applying for credit cards at 2 a.m." The 24hour service gives customers "convenience defined on their terms," he said.

This month, HUntington is introducing a package of telephone services designed to meet the needs of customers with no desire to ever venture into a bank. Mr. Geier sees this as "an expansion to accommodate an emerging group of customers."

Although sales volume has become an important indicator of the success of a phone center, at Shawmut Bank the emphasis is more on building customer relationships over the phone.

"For large portions of the consumer marketplace, the phone is the future," said Robert Hedges, executive vice president, consumer banking group. "lt's the dominant way they do their shopping and seek service. Telephone banking gives us an opportunity to do business with consumers the way they want to do business."

The Boston-based bank, a subsidiary of $31 billion-asset Shawmut National Corp., based in Hartford, Conn., recently made a number of changes to its phone center to turn it into a "virtual" branch.

Through the center, which handles about a million calls a month, the bank offers an array of consumer deposit and credit products, including home equity, auto, and direct installment loans. Telephone representatives can also start the mortgage process.

The bank also made changes to its phone center policy, allowing customer service representatives to make the same decisions as branch managers, said Mr. Hedges.

To support these functional changes, the bank upgraded its technology by signing a $20 million agreement with AT&T for an automated telephone system. The system uses automatic number identification, which tells phone representatives who's calling as calls come in. This is coupled with a "screen pop" feature that automatically brings up a caller's information file to the agent's screen.

Starting this month, the bank will be offering a set of information services that will let customers call the automated system to get information on loan and mortgage payments. The bank will continue to develop a series of capabilities under the information services banner to "make the phone relationship more valuable," said Mr. Hedges, adding that there are still "tremendous opportunities" with telephone banking.

Mr. Hedges said that anything done on the telephone will be transferable to screen phones, personal computers, and other home-banking devices.

"We're careful that the system will be plug-compatible with other channels," he said.

The bank is conducting test programs of video kiosks and is working with AT&T to offer interactive financial services through television, he said.

Like Shawmut, many banks plan to develop multiple channels of delivery to allow customers to select the one that's best for them.

But for now, at least, for the majority of consumers, the ordinary telephone is the device of choice for accessing remote financial services.

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