Texas crossroads credit union

Systems give members a voice

Interactive voice response systems soon will incorporate speech recognition

Interactive voice response (IVR) phone systems are nearing 99% penetration among credit unions, signaling a mature, accepted technology. Credit unions like IVR because it reinforces the notion of their dedication to offering members convenient ways to interact with them. Even better, IVR shaves costs off the bottom line: It's cheaper to have credit union members interact with a "directed dialogue" than with salaried employees.

Another aspect credit unions like, says Stephanie Shah, vice president of marketing and product development at Harland Financial Solutions-Ultradata System, Pleasanton, Calif., is that the technology also offers cross-sell opportunities. "Members calling for account information may be pitched loans or offers tailored to their circumstances while they wait, thanks to IVR systems coupled with MCIF [marketing customer information file] and CRM [customer relationship management]."

Current Touch-Tone technology is so good that more than 90% of all members who encounter it stick with it rather than opt out to talk to call center reps. But technology never rests. "Because voice response is a very mature market," says Keil Shaddey, telephone banking product manager at Aurum Technology Inc., Plano, Texas, "the technology is headed toward speech recognition."

Speech recognition (aka "natural language"), because of its potential to handle very complex transactions, could bring about far greater savings than current IVR allows.

With it, members who now hear, "Please select from the following options," instead would hear, "Hi, how can I help you?" They might respond, "I want the balance on my share draft account and to transfer money from it to my savings account." The IVR system, after confirming the members' identities by comparing their voices to database files, would answer the question and make the transfer. At each step, the process would "understand" members' questions and commands and respond accordingly.

But speech recognition technology isn't quite there yet. "Early adapters have forged ahead with it as the technology becomes more stable," says Shaddey, whose company produces an IVR product called Aurum Telephone Banking. "The success rate of identifying caller inputs is going up, but the price is still relatively high. It will come down as technology and economies of scale kick in."

One approach to speech recognition that vendors are taking is partnering with experts in the field. Harland teamed up with Maxxar Corp., Wixom, Mich., in June to add Maxxar's voice recognition technology to its Ultradata product. "They focus on technology," says Shah, "and we focus on data, information, and business rules for loans and other transactions by phone, using natural language. We wanted to use Maxxar's technology for natural communication vs. menu-driven."

Shaddey says state-of-the-art software designers such as Speech Works and Nuance use "natural language" to mean the ability to understand conversational language. But although natural language works in lab settings, no financial institutions actually are using it. "The level of sophistication today is at the nonvocabulary level, for example, a databank comparing a spoken name to a database of sounds."

Even when natural language reaches commercial usefulness in an estimated two to five years, someone must be willing to invest in it and be the guinea pig. "I'm not sure financial institutions would be the best industry to pioneer it," Shaddey says. "Utilities would be a better bet since people call them routinely to order services or change addresses. Compared with financial transactions, these uses are quite simple."

One of the problems designers must overcome is that conversational language often involves dialects, accents, and non-native speakers. "Sentence structure alone, even between two similar languages such as Spanish and English, can be hard to account for," says Shaddey. He cautions that the shift from Touch-Tone IVR to speech will cause a drop-off in use in certain regions. "The Midwest will be less likely to drop off because the speech pattern there is homogenous. In Miami, a crossroads where there are many different accents, credit unions will experience a more difficult transition."

Paul Kowal, president of Kowal & Associates, a Boston-based consulting firm, says vast increases in computer processing power, as well as practical experience since the mid '90s, make it likely that computers eventually will be able to handle accents pretty well. While installing speech recognition IVR will require commitment, "The silver lining is that much of the set-up will be the same as with Internet banking: VXML [voice extensible markup language] and XML are very much alike." Add to that some compelling financial arguments: "If you can transact at 10% of the cost of a live teller or improve member use of your current IVR from, say, 25% to 40%, you can enjoy immense savings."

While vendors such as Harland and Aurum provide IVR software, not every credit union needs or wants an on-site installation. The alternative is a service bureau like the one offered by Worldwide Interactive Services Inc., an Orlando, Fla.-based application service provider. The company processes transactions and queries it receives via toll-free numbers it provides each client. Clients pay for the service on a percall basis, with volume providing price breaks. The service is transparent to members, and if transactions become too complex, it can redirect calls to credit unions' own call centers.

"We're a solution for credit unions that can't afford on-site equipment," says John Pantaleon, president. "Clients don't have to install on-premise equipment or new phone lines, and they don't have to deal with obsolescence."

In fact, a service bureau can provide an appealing array of add-on services. For example, the system can retain members' prior calls and, based on them, anticipate what callers want. Also, as members wait for responses, the identification numbers they enter spur a database to present ads tailored to their financial situations. The system even can tell members they have e-mail messages from their credit union.

Shah, whose company launched a full prototype speech recognition software in June, says credit unions will be able to expect certain capabilities and results once such software becomes a workaday tool. First, members will become "trained" in the sense of making fewer call-center queries and learning to push rapidly through the system, giving them a greater sense of control.

"The system will learn voice recognition to the extent members will be able to speak their way through a transaction completely-no more pressing buttons to enter personal identification numbers," Shah says. Members will speak their identification numbers and identifying phrases, such as, "My dog has fleas," and once OK'd by the database, be moved on to the next step. They'll even be able to speak a fax number or e-mail address and ask to have information sent there.

"Credit unions also will be able to brand themselves through the voice and personality they choose for each system, including how it interacts, how members are welcomed, and how questions and responses are designed," says Shah. For example, one Texas credit union has a Spanish language option but makes sure it's in Mexican-accented Spanish. A Puerto Rican credit union has the same option but makes sure the voice is in Puerto Rican-accented Spanish.

Kowal says IVR began as a cost-saving approach in other industries, then became a service embellishment by the time it reached credit unions. "Everyone understands and uses IVR, and credit union members have grown to expect it. Whatever credit unions can do to keep the service personalized and friendly is important."