Leader Bank NA in Arlington, Mass., is using instant messaging software to make it easier for customers to get in touch with branch personnel.
Though other banks are using similar real-time communication, most see the technology as a marketing tool. In contrast, Leader says IM software has become an important service component.
“It brings down the walls a little bit, because the customers feel they have a direct link to you,” said Jay Tuli, the bank’s head of business development and marketing. “It’s made us so much more efficient.”
Mr. Tuli said that Leader added links to its Web site in March that enable users of AOL LLC’s popular AOL Instant Messenger software to contact branch managers. The AOL messaging software connects people to Leader Bank’s internal messaging software from MessageLabs Ltd. of New York, which Leader has been using since December.
Each of the bank’s three branches has been assigned its own screen name, and customer messages are routed directly to the managers. Mr. Tuli said Leader employees are having 15 to 20 IM exchanges a week with customers and a handful a month with prospective ones. Leader has 6,000 deposit accounts, all of which are automatically enrolled in its online banking service.
Instant messaging provides faster, more direct access to branch managers than the phone, and that means better service, Mr. Tuli said. People calling the branch must first go through a receptionist and then wait for the branch manager to accept the call. However, the branch manager can type responses to basic IM inquiries while engaged in other tasks.
“Talking online has really helped and, I would say, in many cases kept us on the ball,” Mr. Tuli said.
Instant messaging has its drawback, most notably security. Because AIM conversations are not considered secure, Leader employees will not use the software to request or provide sensitive information, which limits its effectiveness as a service tool. The bank discourages customers from providing account numbers online, Mr. Tuli said, and requests signatures by fax if customers must authorize anything.
The messaging capability has improved the bank’s interaction with customers, Mr. Tuli said. “A banker’s relationship with a customer, historically, tends to be kind of formal,” he said, but through IM it can be a bit more casual. “The smileys always help.”
It also helps that customers can choose to connect to the same banker each time, he said. Other banks’ messaging systems typically connect customers to a service representative chosen at random, but Leader’s customers know that they are reaching the same person every time they use the IM software.
In recent years, other banking companies have installed software that permits prospective customers to ask questions through a real-time chat window on the banks’ Web sites. At companies including Bank of America Corp. and SunTrust Banks Inc., service representatives will initiate the chat, making a window appear on a customer’s computer screen if the person has spent a certain amount of time looking at product information.
Bank of Montreal’s Harris Bank of Chicago has added to this capability by installing software that lets people speak with employees through a computer microphone while they are looking at the Web site. If they do not have a microphone, or do not want to use one, they can ask the rep to phone them.
However, the primary purpose of these messaging systems is to sell banking products to customers. Most banks still handle electronic customer service by e-mail, Web forms, or a message page within the online banking site.
David Hahn, MessageLabs’ group product manager for North America, said his company has been able to link its corporate messaging software to AOL’s network since it bought the New York software company Omnipod Inc. late last year. He said he is not aware of any other bank using MessageLabs software for customer service.
MessageLabs adds some security features that the consumer-focused AOL software lacks, including an administrative password and the ability to log all conversations automatically and remotely. In the next six to 12 months, MessageLabs will add a feature to filter out account numbers and other sensitive information from such conversations as each message is sent.
However, some of MessageLabs’ main security features, such as encryption, cannot work with messages forwarded to and from AOL. With any message the bank sends this way, “we have to decrypt it and pass it off to AOL for the customer to receive it,” Mr. Hahn said.
To correct this, AOL, a unit of Time Warner Inc., would have to change the nature of its software, which is unlikely, Mr. Hahn said. “AOL is not really after the corporate market as much as MessageLabs is,” he said.
Christine Barry, a research director at Aite Group LLC of Boston, said what Leader Bank is doing is “definitely not something I’ve seen before, but it’s a smart concept.”
Instant messaging is a good fit for community banks, but it would be impossible for large ones to match the direct connection that the $200 million-asset Leader has created between customers and specific employees, Ms. Barry said.
“I don’t really see it happening at one of the big banks,” she said. “I don’t think it’s that scaleable.”
The security concerns around using AOL’s software for more sensitive customer transactions are valid, but the use of the software for more general conversations with the banker “really just fits in well with the community bank strategy,” Ms. Barry said. “We’re always there for you, no matter how you want to reach us.”
Since the banker is put on what AOL calls a Buddy List, “it almost puts the bank in the position where they’re a friend,” she said.
