Dena Skrbina our Senior Director of Solutions Marketing wrote this great commentary on how consumers, having been conditioned by the ATM experience, are expecting an increasingly high level of sophistication from phone self-service.

With 2 million ATMs conveniently positioned at airports, convenience stores and shopping centers around the globe today, it's hard to believe that consumers initially felt put-off by the ATM and strongly preferred face-to-face interactions with their favorite bank teller. That was almost 40 years ago now. Not only has the ATM come a long way since then, but it continues to evolve its self-service role with consumers as technology developments advance its capabilities.

For banks, ATMs were simply a means to reduce personnel costs.  But, the need to obtain funds outside of normal banking hours and longer lines at the teller window lead to the eventual adoption of, and even later a love affair with, the ATM.  In fact, the American Bankers Association reports that half of the U.S. adult population use ATMs every month, with 40 percent visiting ten or more times each month.  And why not?  ATMs are convenient, easy to use, and provide a much-desired service.

What's more, technology advancements have made it possible to tailor the ATM experience for each customer based on previous interactions. At most ATMs today, repeat customers are automatically greeted in their preferred language and offered their customary cash withdrawal. An ATM can even know about a customer's recent financial transactions and offer overdraft protection or a loan application right on the spot.

In Europe, financial institutes are using ATMs for advertising, for example giving customers the option to donate a portion of their withdrawal to a charity of their choice. Third-party advertisements and upsells on ATMs are becoming common abroad and will inevitability reach the U.S.  ATM self-service has succeeded in becoming a multifaceted service and marketing channel, widely accepted and in most cases highly valued by today's consumers.  And, phone self-service should be taking notice.

Phone self-service has also been around for nearly 40 years. In 1962, Bell System unveiled the first touch-tone telephone technology at the Seattle World Fair. In the 1970s, companies began using touch-tone technology to automate tasks in call centers: the first touchtone IVR (Interactive Voice Response) systems.  They were used mainly for inquiry services such as getting a bank account balance.  Like the ATMs of the same era, IVRs were mainly focused on reducing operational costs.

IVR adoption grew only out of consumers' necessity to transact after-hours and a desire not to squander time holding for an agent.  The IVR became an 'annoying convenience' and a generally accepted consumer tool. Research shows us that the phone is still the most heavily used customer service channel. With consumers rating automated telephone customer service (touchtone or speech recognition) higher than live agents for straightforward interactions, delivering great phone-based experiences is imperative.

Having been conditioned by the ATM experience, consumers are expecting an increasingly high level of sophistication from phone self-service.  Although technologies have evolved, most IVRs still lag behind the progression of the ATM experience.  With a focus on user design and ease of use, phone self-service can surely be as convenient and relevant as an ATM.  Like the ATM, repeat IVR users could be greeted automatically in their preferred language and offered their customary choices upfront. The IVR can know about recent account activity as well as web transactions, and offer an appropriate insurance package or suggest the right home equity loan. IVRs can provide proactive notifications and reminders for billing due dates and prescription refills.  And, like the ATM, the phone self-service interface can be natural, intuitive and easy to interact with.

Stay tuned for Part 2 to learn where we think phone self-service is heading (and why it might just take over the ATM...).