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Over the last few years we have seen the rise of VoIP or “Voice over Internet Protocol”. Last year more IP switches were sold in the US than traditional switches, and that trend is increasing rapidly.
What is VoIP? VoIP can be defined as routingvoice conversations over the Internet or any other IP-based network. The voice path flows over your network, instead of traditional dedicated, circuit-switched voice transmission lines. The large telephony switch vendors have moved away from providing traditional phone switches and sold their customers VoIP switches and phones with promises of cost savings. These savings seemed reasonable. No more having to wire phones to every desktop, simply plug your new VoIP phone into the network and once the call was within your WAN or LAN calls would essentially be free.
However, in many cases the expected ROI failed to materialize as customers found their networks were insufficient to handle VoIP traffic. They had to spend more money to upgrade the their network before they could get the quality of service they expected. This situation was often exacerbated over the wide area network (WAN) creating expensive and often unexpected delays in implementation and delaying the return on investment.
There have been some notable successes in terms of cost savings after the implementation of VoIP, but is the average credit union going to see a huge cost reduction today? Possibly, if they move a lot of calls around between branches and had a high capacity network, but for the average credit union the savings are probably slim.
So was it worth spending all that money on VoIP? Absolutely. The real advantage will come in the form of the applications that vendors will provide that can be built on top of an IP-based communication platform. While there are many potential IP-based applications, the convergence of the web with communications enabled by IP could massively change the way we interact with our members.
Most people would prefer to see the person they are speaking to and have information presented visually as well aurally, especially if it is complex. For instance, instead of having to wait on hold for an MSR to become available, a member would register themselves on the site with their account number and pin, request a specific type of call (HELOC, auto loan etc.), and immediately be placed in to the appropriate “visual queue” where they could see how many people are ahead of them and their wait time. Once they reached the top of the queue the appropriate MSR would call them. If the member decided the queue delay was too long, they could schedule a call-back at convenient time. To really personalize the interaction, the member would have the option not only be able to see the MSR and vice versa, but step through an application form or on-line bill-pay options with the agent.
Besides the obvious improvements in member satisfaction, there are also cost and revenue benefits to the credit union. The 1-800 number charges would be drastically reduced as members would not need to call in. The voice call itself could be carried out entirely over the PC thus incurring no phone charges. Because members would be initiating communication through the credit union web portal, the opportunities for one-to-one cross-selling rise as each member could have specific offers geared to their individual needs. Additionally, any voice call could be recorded and saved in the members account so that if there was any confusion at a later date over what was said it could easily be recovered.
The real value of VoIP won’t become apparent for most Credit unions until these applications are implemented. How long do we have to wait? Not very long. Already new technology, enabled because of IP, has already started to arrive. As an example, Skype, an IP based technology for free voice communications worldwide, has almost four million active users at any point in time and was recently purchased by eBay. Many other companies have adopted “instant chat” using “voice over the internet” solutions whereby customers can click on the “chat” button and speak immediately to an agent. The more sophisticated applications like communications portals are probably 18 months away and that’s when we will see mainstream adoption and the payback on your VoIP implementation. So while the payback on VoIP may have been slow in arriving, the possibilities that it provides are dramatic and certainly worth the wait.
October 31, 2005
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