Automated solutions to problem resolution

RMA Journal, The, March, 2002 by Ken Johnson, Diane Olsen

Customer retention begins with customer trust. Customer trust is built through a history of positive experiences. Customer attrition, on the other hand, can result from just one bad experience with a problem resolved unsatisfactorily. A new generation of automated research and adjustment software solutions can speed resolution eightfold, increasing accuracy while maintaining or even reducing current staff levels. This article discusses the state of the art in this software.

A customer receives her statement and notices that a $100 check that she wrote appears as a $1,000 debit. She picks up the phone and dials the call center to report the problem. Or perhaps she stops by a branch to explain the problem to the manager, who then calls an operator in the back office, who in turn writes down the information. Two possibilities immediately arise:

* The person making the request could omit vital information.

* The operator could enter the information incorrectly.

Time passes as the mistake is corrected. Meanwhile, the customer may be so upset when the problem isn't already resolved that she calls the problem in again, creating a separate tracking record.

Such customer complaints are typically categorized based on the capture site they apply to and are then faxed or e-mailed to the research department responsible for that capture site, where each problem is assigned to an investigator. The investigator typically begins by retrieving the item from an imaging archive or ordering a photocopy from the microfilm department. As soon as the investigator is able to view the image, the encoding error may be verified. However, the problem is still far from being resolved. The next step typically is to review the customer's direct deposit account (DDA) history to verify if the correction has already been issued in response to a previous complaint by the customer. After verifying that there is no duplication, the investigator typically credits the customer's account and generates a letter to the customer stating that the credit has been issued. After these steps, the investigator still has to try to make the bank whole by obtaining the funds from the party that actually received the extra $900.

Using the capture sequence number (a sequentially generated number that has been sprayed on the back of the check during the primary image capture sorting process), the investigator typically goes to the "All Items File" to determine to which bundle the check was attached. In this case, let's assume that the investigator discovers that the cheek came in a cash letter from another bank. For this type of case, the investigator sends a letter to the bank notifying them of the error and requesting payment while at the same time placing the ease in pending or collections status. If the other bank doesn't respond within a certain period of time, then the investigator will send follow-up letters. Recovery of the offsetting side of the error is the most time-consuming part to the process since very often it originates through the clearing process between the bank and the Federal Reserve or other banks. Finally, when the payment is received, the correcting transaction needs to be routed to the investigator working th at ease so it can be closed and ledger entries made to offset the customer's refund.

When you review the entire process and look at each of the manual steps that must be completed in order to resolve a simple customer problem, it's easy to see why research and adjustments are becoming such a large problem for so many banks. Following up to 18 points of human intervention, a problem may be solved or may have been made worse through mistakes made along the way. And with a manual system, an investigator is lucky to clear a single case every hour. As banks add customers, either through internal growth or acquisition, the amount of time that needs to be devoted to the research and adjustments process often grows exponentially.

At the same time, increased competition for deposit dollars has spurred banks to reduce the time required to resolve customer issues and even offer service-level agreements to key customers that guarantee resolution of adjustments within a fixed time period. Recognizing the high cost of resolving errors and out-of-balance cases, some banks have set a charge-off limit so that, for example, whenever a customer reports a problem of under $100, the bank will simply issue a refund without researching the problem or seeking an adjustment. Using traditional methods, research and adjustment is so expensive that charge-offs can often significantly reduce expenses in the short term. Of course, this approach tends to be Less effective over the long term as a few unscrupulous individuals discover how to take advantage of them.

Steps Toward Automation

Automated solutions, while not infallible, help to ensure higher accuracy in handling customer complaints while also saving time. They do so by first collecting the information needed to resolve the problem through electronic interfaces and then transferring it to the correct research area using automated workflow methods, reducing the need for manual intervention from up to 18 steps to one or two. Meanwhile, business rules defined by management are automatically enforced.