To shift more customer service communications to the Internet, Wachovia Corp. is upgrading its online bank message system to give retail customers features usually reserved for corporate customers.
The Charlotte company's employees have long used a system designed in-house to receive and respond to messages from consumers and small-business customers. However, the system did not let employees initiate messages.
The new system, which closely resembles e-mail applications, will let service representatives initiate messages, send files, and reply online to questions made through other channels.
Wachovia says it will be more secure than using traditional e-mail and more cost-effective than replying to inquiries on the phone or in person. And, by offering the capability to its entire customer base, Wachovia is hoping to shift some tasks to the Internet and reduce its mass-market customer service workloads.
"It's going to make us faster and more efficient," said Gary Rose, the vice president of e-commerce for Wachovia's emerging enterprise applications group.
Other companies, including JPMorgan Chase & Co., offer similar services.
However, Wachovia is offering all its customers access to messaging features that in the past it has offered primarily to large corporations and the very wealthy. Few banking companies offer consumers the same features as standard e-mail, such as an address book and the ability to send attachments, and those that do, like JPMorgan Chase, tend to reserve the richest features for their richest customers.
JPMorgan Chase considers the messaging tool's most advanced features as perks it can offer to its best customers, but Mr. Rose said that providing the features to every customer could help Wachovia respond to common inquiries faster and through less expensive channels.
Wachovia's current system can be used only to answer customer inquiries initiated online, he said. "We could only reply." The fact that "we couldn't initiate messages" limits the system's effectiveness.
For example, if a customer calls to request an archived check image or an old statement, Wachovia must send the documents by mail. Under the new system, which is scheduled to go live in September, the files can be delivered electronically, which is easier for the service staff, less expensive for the bank, and faster for the customers.
Wachovia is using the MailGate e-mail software from Tumbleweed Communications Corp. of Redwood City, Calif., for the upgrade. The same software has been available for Wachovia's large corporate customers since November.
Mr. Rose said the software functions more like e-mail than the basic messaging capability that many banks currently offer consumers. Users can sort messages into folders and keep an address book of customer service representatives.
Wachovia has used traditional e-mail to contact customers in the past, but the growing threat of phishing has made some customers suspicious of such communication.
For example, in 2004 it sent an e-mail advising former First Union Corp. customers that they would need to change their passwords, because the company was updating its online banking site. (First Union bought the old Wachovia in 2001 and took its name.) The e-mail included a link to a site where people could change their passwords. However, this made Wachovia's e-mail look much like the ones con artists send to people as part of phishing scams. Many customers thought the message was fake, and they flooded the call center with inquires.
The messaging system is meant to make people less wary about such a message, which they would see only after logging in to the bank's site.
In mid-2005, Wachovia began switching former SouthTrust Corp. customers to the Wachovia Web site - again relying on e-mail to notify people of the switch. Those messages included a phone number, so customers could talk to bank representatives rather than use e-mail to continue the conversation, and again call volume spiked.
Ken Beer, Tumbleweed's director of product management, said the system so closely resembles e-mail because Wachovia employees use it with their normal e-mail software.
Once those e-mails are sent to customers, Tumbleweed's software steps in to redirect them to the online banking messaging system. A note about the message is then sent to the customer's e-mail address. "Customer service reps use their e-mail," he said, and messages to customers are "intercepted and stored in encrypted form on a secure Web server."
More than 300 large banks use Tumbleweed's software, but most use it only for corporate customers, Mr. Beer said.
JPMorgan Chase uses a similar online messaging system from the online banking software vendor Corillian Corp. of Hillsboro, Ore. The software went live six years ago at Bank One Corp., which JPMorgan Chase acquired in 2004.
Paul Heller, the senior vice president in charge of JPMorgan Chase's corporate Internet group, said that its consumer and corporate customers use the same software, but the more money a customer has with the company, the more messaging features they can use.
"Your communication needs change based on what segment you belong to," Mr. Heller said.
For example, wealthy consumers with several accounts can contact a personal financial adviser or a customer service representative in any department, but a user with just a checking account would have far fewer options for communicating with the bank.
JPMorgan Chase also can send attachments through its messaging system, but it rarely does so, and it never accepts attachments from customers.
Dan Schatt, a senior analyst for the Boston market research firm Celent LLC, said what Wachovia is doing is a compromise for a banking company that wants all the capabilities of e-mail with none of the security risks.
"It's a change in behavior if … [consumers] are going to have to manage e-mails from their online banking application," he said. "It's a step in the right direction," but it would still be easier for the consumer to pick up the phone and call the bank.
Chris Musto, an analyst with Keynote WebExcellence, a division of Keynote Systems Inc. of San Mateo, Calif., says Wachovia's system may, in some of its features, provide consumers more than they need.
"I don't know how much use it will get," Mr. Musto said. "Messaging at the bank doesn't have to do everything the consumer can do" elsewhere online.
For example, large businesses contact their bank frequently and need an address book to connect with the person they know can help them best, but most consumers would not use this feature anywhere near as much, he said.
"It's not revolutionary, but it's a demonstration of the strength of the e-mail channel," Mr. Musto said.
