Exploring the application of IVR: lessons from retail banking

Abstract

In today's increasingly competitive retail banking environment, banks are faced with the challenge of building and maintaining relationships with profitable customers while at the same time embracing technological change. So, while on the one hand increasing the role of technology in a services organisation can serve to reduce costs and often improve service reliability; on the other hand, organisations are acutely aware of the important role for personalised relationships in the delivery of their service proposition. This article reports on a qualitative research study into the perceptions of customers and staff of a large retail bank regarding the piloting of an interactive voice recognition (IVR) system. This system is regarded as a way for the case bank to benefit from technological advances, while still retaining its relationships with more profitable customers. To this end, the system was hoped to encourage lower net worth customers to increase their use of the bank's telephone banking facility, and allow branch staff, who would be freed from dealing with routine telephone enquiries, to deliver a better personalised service to high net worth customers. However, despite this rationale, the article reports the paradoxical situation that the system has been effectively rejected by customers and staff alike. The key objection is that relating to the perceived service discrimination between high and low net worth customers, the very rationale for which the IVR was introduced.