Exploring the Application of IVR: Lessons from Retail Banking

Danielle McCartan-Quinn, Mark Durkin, Aodheen O'Donnell

Research output: Contribution to journalArticle

11 Citations (Scopus)

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 paper 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 allowing 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 paper 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.
LanguageEnglish
Pages150-168
JournalThe Services Industry Journal
Volume24
Issue number3
DOIs
Publication statusPublished - 2004

Fingerprint

Retail banking
Net worth
Staff
Telephone
Rationale
Banking
Costs
Technological change
Service organization
Technological advances
Retail
Qualitative research

Keywords

  • Interactive Voice System (IVR)
  • Retail Bank
  • Segmentation
  • Relationship Marketing
  • Technology

Cite this

McCartan-Quinn, Danielle ; Durkin, Mark ; O'Donnell, Aodheen. / Exploring the Application of IVR: Lessons from Retail Banking. In: The Services Industry Journal. 2004 ; Vol. 24, No. 3. pp. 150-168.
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note = "Reference text: Anton, J. (2000). “The Past, Present and Future of Customer Access Centres.” International Journal of Service Industry Management 11(2): 120-130. Axson, D. (1992). “A Return to Managing Customer Relationships.” International Journal of Bank Marketing 10(1): 30-35. Barnes, J. (1994). “Close to the Customer: But is it Really a Relationship?” Journal of Marketing Management 10(561-570). Barnes, J. and D. Howlett (1998). “Predictors of Equity in Relationships between Financial Services Providers and Retail Customers.” International Journal of Bank Marketing 16(1): 15-23. Bednar, D. A., C. A. Reeves, et al. (1995). “The Role of Technology in Banking: Listen to the Customer.” Journal of Retail Banking 17(3): 35-41. Bennett, H. and M. Durkin (2000). “The Effects of Organisational Change om Employee Psychological Attachment: An Exploratory Study.” Journal of Managerial Psychology 15(2): 126-147. Berry, L. D. (1997). “Ten Building Blocks for Developing a Customer-Focused Culture.” Bank Marketing 29(7): 106. Bingham Bernstel, J. (2001). “Speak Right Up!” Bank Marketing 33(9): 16-21. Bitner, M. J. (2001). “Service and Technology; Opportunities and Paradoxes.” Managing Service Quality 11(6): 375-379. Bowen, D. E. and E. E. Lawler (1992). “The Empowerment of Service Workers: What, Why, How and When.” Sloan Management Review 33: 31-39. Caruana, A. and P. Calleya (1998). “The Effect of Internal Marketing on Organisational Commitment among Retail Bank Managers.” International Journal of Bank Marketing 16(3). Czepiel, J. A. (1990). Managing Relationships with Customers: A Differentiated Philosophy. Service Management Effectiveness. D. E. Bowen, R. B. Chase and T. G. Cummings. Oxford, Jossey Bass Ltd. Deakins, D. (1999), Entrepreneurship and Small Firms, Second Edition, Mc Graw-Hill Publishing Company, London. Durkin, M. and H. Bennet (1999). “Employee Commitment in Retail Banking: Identifying and Exploring Hidden Dangers.” International Journal of Bank Marketing 17(3): 124-134. Ernst and Young (1998) ‘E-Commerce and connecting to the customer’, Special Report: Technology in Banking and Financial Services: Available at http://www.e&y.com/reports (cited January 1999) Ernst and Young (1999) “E-Commerce: Customer Relationship Management - 1999 Special Report Technology in Financial Services”, Available at http://www.e&y.com/reports (cited October 1999) Financial Technology Bulletin (2001), ‘Effective banking via any channel’, Financial Technology Bulletin, v18 (21), pp4-6 Flick, U. (1998). An Introduction To Qualitative Research. London, Sage Publications. Fournier, S., S. Dobscha, et al. (1998). “ Preventing the premature death of relationship marketing.” Harvard Business Review Jan-Feb: 42-97. Gentle, C. J. S. (1993). The Financial Services Industry. Hants, Avebury. Gordon, W. and R. Langmaid (1988). Qualitative Market Research: A Practitioner's and Buyer's Guide. Aldershot, Gower. Harvey, F. (2001). “Avoiding Touchtone Hell.” Computer Weekly May 24th: 40. Hatlevig, T. (1995). “Let Your Fingers Do the Talking.” Personnel Journal 74(8): 105-109. Holland, J. B. (1992). “Relationship Banking: Choice and Control by the Multinational Firm.” International Journal of Bank Marketing 10(2): 29-40. Hollander, S. (1985). A Historical Perspective on the Service Encounter. The Service Encounter: Managing Employee/Customer Interaction in Service Businesses. J. A. Czepiel, M. R. Solomon and C. F. Suprenant. MA, Lexington Books. Hollman, L. (2002). “Cash, Credit and Call Centres.” Call Centrer Magazine 15(2): 34-40. Howcroft, J. B. (1998). “The New Retail Banking Revolution.” Journal of the Association of Professional Bankers 8(4): 45-55. Hughes, J. (1994). The British Financial System. Retailing of Financial Services. P. J. McGoldrick and S. J. Greenland. London, McGraw-Hill. Jayawardhena, C. and P. Foley (2000). “Changes in the Banking Sector- The Case of Internet Banking in the UK.” Internet Research: Electronic Networking Applications and Policy 10(1): 19-30. Joseph, M., C. McClure, et al. (1999). “Service Quality in the Banking Sector: The Impact of Technology on Service Delivery.” International Journal of Bank Marketing 17(4): 182-191. Kelley, S. (1989). “Efficiency in Service Delivery: Technology or Humanistic Approaches.” The Journal of Services Marketing 5(1): 43-51. Leavy, B. (1994). “The Craft Of Case-Based Qualitative Research.” Irish Business And Administrative Research 15: 105-118. Levitt, T. (1986). The Marketing Imagination. New York, Free Press. McMahon, L. (1996). “Dominance and Survival in Retail Financial Services: Use of Electronic Delivery Channels to Optimise Distribution Strategy.” Journal of Financial Services Marketing 1(1): 35-47. Newell, A. (2001). “Call Centre Signals.” Bank Technology News 14(7): 24-26. Nickell, J.A. (2001) ‘To voicemail hell and back’, Business, v6 (14), pp48-54 Piercy, N. F. (1998). “Barriers to Implementing Relationship Marketing: Analysing the Internal Marketplace.” Journal of Strategic Marketing 6: 209-222. Quinn, B. (1996). “The Productivity Paradox is False: Information Technology Improves Service Performance.” Advances in Services Marketing and Management 5: 16-21. Robertson, T. S. (1967). “The Process of Innovation and Diffusion of Innovation.” Journal of Marketing 31: 14-19. Robertson, T. S. (1971). Innovative Behaviour and Communication. New York, HoltReinehart and Winston. Robertson, T. S. and H. Gaitignon (1986). “Competitive Effects of Technology Diffusion.” Journal of Marketing 50(July): 1-2. Rogers, E. M. (1983). Diffusion of Innovations. New York, Free Press. Rogers, E. M. and F. F. Shoemaker (1971). Communication of Innovations: A Cross-Cultural Approach. London, Collier Macmillan. Saren, M. and N. X. Tzokas (1998). “Some Dangerous Axioms of Relationship Marketing.” Journal of Strategic Marketing 6(187-196). Scarbrough, H. and R. Lannon (1988). “The Successful Exploitation of New Technology in Banking.” Journal of General Management 13: 3. Solomon, M. R., C. Surprenant, et al. (1985). “A Role Theory Perspective on Dyadic Interactions: The Service Encounter.” Journal of Marketing 49: 99-111. Stewart, K. (1995). An Exploration of Customer Exit with Empirical Findings from the Retail Banking Sector in Northern Ireland, National University of Ireland. Zeithaml, V. and M. J. Bitner (2000). Services Marketing: Integrating Customer-Focus Across the Firm. New York, McGraw-Hill. Zeithaml, V. A., L. Berry, et al. (1991). “Understanding Customer Expectations of Service.” Sloan Management Review Winter.",
year = "2004",
doi = "10.1080/0264206042000247803",
language = "English",
volume = "24",
pages = "150--168",
journal = "Service Industries Journal",
issn = "0264-2069",
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}

Exploring the Application of IVR: Lessons from Retail Banking. / McCartan-Quinn, Danielle; Durkin, Mark; O'Donnell, Aodheen.

In: The Services Industry Journal, Vol. 24, No. 3, 2004, p. 150-168.

Research output: Contribution to journalArticle

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T1 - Exploring the Application of IVR: Lessons from Retail Banking

AU - McCartan-Quinn, Danielle

AU - Durkin, Mark

AU - O'Donnell, Aodheen

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(1997). “Ten Building Blocks for Developing a Customer-Focused Culture.” Bank Marketing 29(7): 106. Bingham Bernstel, J. (2001). “Speak Right Up!” Bank Marketing 33(9): 16-21. Bitner, M. J. (2001). “Service and Technology; Opportunities and Paradoxes.” Managing Service Quality 11(6): 375-379. Bowen, D. E. and E. E. Lawler (1992). “The Empowerment of Service Workers: What, Why, How and When.” Sloan Management Review 33: 31-39. Caruana, A. and P. Calleya (1998). “The Effect of Internal Marketing on Organisational Commitment among Retail Bank Managers.” International Journal of Bank Marketing 16(3). Czepiel, J. A. (1990). Managing Relationships with Customers: A Differentiated Philosophy. Service Management Effectiveness. D. E. Bowen, R. B. Chase and T. G. Cummings. Oxford, Jossey Bass Ltd. Deakins, D. (1999), Entrepreneurship and Small Firms, Second Edition, Mc Graw-Hill Publishing Company, London. Durkin, M. and H. Bennet (1999). “Employee Commitment in Retail Banking: Identifying and Exploring Hidden Dangers.” International Journal of Bank Marketing 17(3): 124-134. Ernst and Young (1998) ‘E-Commerce and connecting to the customer’, Special Report: Technology in Banking and Financial Services: Available at http://www.e&y.com/reports (cited January 1999) Ernst and Young (1999) “E-Commerce: Customer Relationship Management - 1999 Special Report Technology in Financial Services”, Available at http://www.e&y.com/reports (cited October 1999) Financial Technology Bulletin (2001), ‘Effective banking via any channel’, Financial Technology Bulletin, v18 (21), pp4-6 Flick, U. (1998). An Introduction To Qualitative Research. London, Sage Publications. Fournier, S., S. Dobscha, et al. (1998). “ Preventing the premature death of relationship marketing.” Harvard Business Review Jan-Feb: 42-97. Gentle, C. J. S. (1993). The Financial Services Industry. Hants, Avebury. Gordon, W. and R. Langmaid (1988). Qualitative Market Research: A Practitioner's and Buyer's Guide. Aldershot, Gower. Harvey, F. (2001). “Avoiding Touchtone Hell.” Computer Weekly May 24th: 40. Hatlevig, T. (1995). “Let Your Fingers Do the Talking.” Personnel Journal 74(8): 105-109. Holland, J. B. (1992). “Relationship Banking: Choice and Control by the Multinational Firm.” International Journal of Bank Marketing 10(2): 29-40. Hollander, S. (1985). A Historical Perspective on the Service Encounter. The Service Encounter: Managing Employee/Customer Interaction in Service Businesses. J. A. Czepiel, M. R. Solomon and C. F. Suprenant. MA, Lexington Books. Hollman, L. (2002). “Cash, Credit and Call Centres.” Call Centrer Magazine 15(2): 34-40. Howcroft, J. B. (1998). “The New Retail Banking Revolution.” Journal of the Association of Professional Bankers 8(4): 45-55. Hughes, J. (1994). The British Financial System. Retailing of Financial Services. P. J. McGoldrick and S. J. Greenland. London, McGraw-Hill. Jayawardhena, C. and P. Foley (2000). “Changes in the Banking Sector- The Case of Internet Banking in the UK.” Internet Research: Electronic Networking Applications and Policy 10(1): 19-30. Joseph, M., C. McClure, et al. (1999). “Service Quality in the Banking Sector: The Impact of Technology on Service Delivery.” International Journal of Bank Marketing 17(4): 182-191. Kelley, S. (1989). “Efficiency in Service Delivery: Technology or Humanistic Approaches.” The Journal of Services Marketing 5(1): 43-51. Leavy, B. (1994). “The Craft Of Case-Based Qualitative Research.” Irish Business And Administrative Research 15: 105-118. Levitt, T. (1986). The Marketing Imagination. New York, Free Press. McMahon, L. (1996). “Dominance and Survival in Retail Financial Services: Use of Electronic Delivery Channels to Optimise Distribution Strategy.” Journal of Financial Services Marketing 1(1): 35-47. Newell, A. (2001). “Call Centre Signals.” Bank Technology News 14(7): 24-26. Nickell, J.A. (2001) ‘To voicemail hell and back’, Business, v6 (14), pp48-54 Piercy, N. F. (1998). “Barriers to Implementing Relationship Marketing: Analysing the Internal Marketplace.” Journal of Strategic Marketing 6: 209-222. Quinn, B. (1996). “The Productivity Paradox is False: Information Technology Improves Service Performance.” Advances in Services Marketing and Management 5: 16-21. Robertson, T. S. (1967). “The Process of Innovation and Diffusion of Innovation.” Journal of Marketing 31: 14-19. Robertson, T. S. (1971). Innovative Behaviour and Communication. New York, HoltReinehart and Winston. Robertson, T. S. and H. Gaitignon (1986). “Competitive Effects of Technology Diffusion.” Journal of Marketing 50(July): 1-2. Rogers, E. M. (1983). Diffusion of Innovations. New York, Free Press. Rogers, E. M. and F. F. Shoemaker (1971). Communication of Innovations: A Cross-Cultural Approach. London, Collier Macmillan. Saren, M. and N. X. Tzokas (1998). “Some Dangerous Axioms of Relationship Marketing.” Journal of Strategic Marketing 6(187-196). Scarbrough, H. and R. Lannon (1988). “The Successful Exploitation of New Technology in Banking.” Journal of General Management 13: 3. Solomon, M. R., C. Surprenant, et al. (1985). “A Role Theory Perspective on Dyadic Interactions: The Service Encounter.” Journal of Marketing 49: 99-111. Stewart, K. (1995). An Exploration of Customer Exit with Empirical Findings from the Retail Banking Sector in Northern Ireland, National University of Ireland. Zeithaml, V. and M. J. Bitner (2000). Services Marketing: Integrating Customer-Focus Across the Firm. New York, McGraw-Hill. Zeithaml, V. A., L. Berry, et al. (1991). “Understanding Customer Expectations of Service.” Sloan Management Review Winter.

PY - 2004

Y1 - 2004

N2 - 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 paper 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 allowing 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 paper 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.

AB - 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 paper 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 allowing 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 paper 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.

KW - Interactive Voice System (IVR)

KW - Retail Bank

KW - Segmentation

KW - Relationship Marketing

KW - Technology

U2 - 10.1080/0264206042000247803

DO - 10.1080/0264206042000247803

M3 - Article

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T2 - Service Industries Journal

JF - Service Industries Journal

SN - 0264-2069

IS - 3

ER -