In a pilot program that takes customer relationship management into new territory, some Bank of America Corp. tellers are being automatically prompted to offer and approve credit cards and home equity lines of credit on the spot.
A computer screen alerts the teller, for example, that the customer making a deposit qualifies for a card or line.
Tellers "can approve and fulfill a credit card right at the teller window with the click of one button," said Dennis J. DeGregor, the Charlotte company's distribution and channel integration executive, in a presentation Tuesday at a financial services technology conference in New York.
No signature or additional paperwork is needed, and the customer gets the card by mail a few days later, Mr. DeGregor said in a telephone interview Wednesday. Handing the cards to the customers before they leave the branch is still "a ways off," he said.
Mr. DeGregor, a senior vice president, said the pilot program is under way "in a limited geography" but would not elaborate, citing competitive and legal concerns.
The fledgling service exemplifies a new generation of customer relationship management, he said in his presentation. B of A may also equip automated teller machines to offer and approve credit cards and equity lines, he said.
Such innovations are likely to become increasingly important as customers contact the bank in more ways, including the Internet and interactive voice response, he said.
Increasingly, Mr. DeGregor said, customers are managing their own relationships with banks. "Momentum is shifting very quickly from the stores to the call centers, to the IVRs, to the Web," he said. "The concept of managing customers is becoming somewhat obsolete."
Making the right offer to the right customer pays off in earnings. "Satisfied customers tend to be more profitable; more profitability drives the EPS growth - that's the core of our CRM strategy," he said.
B of A bankers argued among themselves whether higher customer satisfaction simply coincided with improved earnings or caused them, Mr. DeGregor said. The verdict is now in, he said: "It is causal."
He acknowledged that shift to tailored marketing is still a work in progress. "Our model is still provider-oriented; it is not customer-oriented," he said.
For instance, he said, because customers are annoyed by junk mail - especially about products and services that they already have - "we've been challenging our marketing department to eliminate direct mail."
It has not been eliminated yet, he said, but the goal is "to do all our marketing on the inbound customer touches."
B of A's computer network cannot now deliver the needed information to the point of contact, he said. To pitch a home equity line, for example, a call center rep needs to know that the customer does not have one.
"We're going to have to swap out our entire platform to go to what we call the 2.0 platform to deliver this at the front lines."
Doing so will require a shift to "service-oriented computing architecture" - that is, separating the systems that present the information from those that provide it - Mr. DeGregor said.
"It's a new wave," he said.
Fifth Third Bancorp of Cincinnati is also using service-oriented architectures, also known as Web services, to provide an "integrated customer experience," whether the contact is in a branch, at an ATM, or online, said Jim Scott, its chief technology officer, at the conference. (It was sponsored by the Gartner Inc. research and consulting firm of Stamford, Conn.)
"I want the ATM to tell me that the check image I requested is available," Mr. Scott said. "I want it to remind me I have a mortgage payment coming up."
Fifth Third plans to make the project a major priority in its 2006 technology budget, said Mr. Scott, a senior vice president. "That's where we're spending most of our dollars - in integrating that customer experience."
Susan Landry, a managing vice president at Gartner, said service-oriented architecture "is an enabler but not necessarily a trigger."
The real change has been customers' increasing willingness to perform routine tasks outside the branch, she said - to make deposits and withdrawals at an ATM, for instance. "That gives banks more flexibility in what they have their tellers do," rather than simply rushing through the transactions to minimize the waiting time in line.
Even so, more individualized marketing and better delivery systems are improving the banks' ability to cross-sell, Ms. Landry said.
"All of the major banks are making these kinds of investments," she added, though different companies focus their efforts on various priorities. "They might not be calling it CRM, but they are not abandoning the relationship strategy - they're strengthening it."
