When Consumer Financial Protection Bureau (CFPB) Director Richard Cordray addressed the Mortgage Bankers Association’s convention in October 2016, he reminded the standing-room-only crowd that although significant progress has been made since the financial crisis devastated the mortgage industry and the borrowers it serves, “outdated and deficient servicing technology continues to put many consumers at risk.” Although he did not specifically mention problems with interactive voice response (IVR) systems, complaints submitted to the CFPB, such as the following examples, document a high level of frustration on the part of borrowers when they call for service on their loans:
“I tried calling the number listed on the notice to make a phone payment, but the automated phone system would not recognize my social or loan number I provided and I got stuck in a loop. I have wasted a considerable amount of time trying to resolve this issue.”
“What bothers me more than spending 45 minutes fixing a non-issue is how difficult XYZ’s phone system was. Their system did everything possible to keep me from speaking to a human being. By the time I eventually spoke to one, he was very kind and helpful. I pressed ‘0’ over and over, much to the automated system’s dissatisfaction. Shouldn’t it be easier to speak to a human being?”
“I called back and searched through the menus for the escrow department. After another 30 minutes on hold, I hung up in frustration. Altogether, I have spent approximately two hours on the phone and on hold, with no resolution for this problem in sight.”
If your operation is getting complaints like these, fixing the problem needs to be a priority. Continuing his remarks, Cordray made it clear his agency (although its future now seems somewhat uncertain under the new administration) will not accept the status quo.
“To spur needed improvements in servicer compliance, we will be insisting on specific and credible plans from servicers describing how their information technology systems will be upgraded and improved to resolve these issues effectively,” Cordray said.
Consider the following a “crawl, walk, run” plan for implementing an IVR your borrowers (and the CFPB) will love.
Start with the basics
An IVR has two primary purposes in mortgage servicing. The first is to allow borrowers to find information about their loans or execute a transaction without requiring the assistance of a contact center agent. The second is, when self service is not desired or possible, to efficiently route the caller to the person or department best equipped to assist him or her.
From a business perspective, successfully enabling these functions drives different but complementary benefits. Making it possible for borrowers to self serve saves a tremendous amount of money – on the order of $6 to $12 per call – as long as the caller is able to complete his or her task in the IVR. Helping them get to the right person when required improves borrower satisfaction, while still cutting some costs spent on misroutes.
At a minimum, a mortgage servicer’s IVR should allow borrowers to access the most commonly requested information and execute frequently occurring transactions.
Our firm recently completed a benchmarking survey of the IVRs of large servicers and found a wide variance in the availability of self-service options for these basic functions.
Although all of the servicers studied provide access to information about loan balances and support the ability to make a payment by phone, only two allow the borrower to enter a promise to make his or her payment on a future date. By not accepting a promise to pay in the IVR, a servicer drives costly transfers into the contact center. If callers are ready to make a promise but unwilling to wait for an agent, a servicer may also find itself making unnecessary outbound collection calls a few days later.
Filling in gaps like this in an IVR’s self-service functions should be the first item in a servicer’s “get well” plan; however, not all callers can or should be handled in automation – some need to talk to a human.
A borrower in good standing looking to open a home equity line of credit and a distressed borrower hoping to avoid foreclosure may call the same toll-free number, but they clearly need to speak to different people. Discovering caller intent and routing them to the right resource is the next big challenge servicers need their IVRs to handle.
Mastering call routing
Driven by ubiquitous mobile technology (think speech-enabled apps such as Siri, Alexa and Google Now), today’s consumers are conditioned to lead their interactions with technology – not the other way around. They want to simply ask for what they need and have the technology deliver. Yet, most IVRs still use outdated touch-tone technologies that force customers into complex, hard-to-navigate mazes. Too often, callers get lost in menus, become frustrated and zero out, only to be routed to the wrong destination.
Speech-based IVR systems – particularly those enabled for natural language understanding (NLU) – are a great way to reduce misroutes and provide a more satisfactory customer experience. NLU frees callers from the confining nature of limited prompts, allowing them to simply express their desire in their own words and be directed accordingly.
For example, if in response to the IVR asking, “How can I help you today,” the borrower responds, “I’m interested in refinancing my mortgage,” an NLU-enabled IVR would know to send him or her to a credentialed mortgage banker. On the other hand, if the caller responds, “I can’t make my mortgage payment,” the IVR would get him or her to a loss mitigation specialist.
Obviously, implementing such a system is more involved than simply changing an IVR’s greeting prompt, but if servicers are serious about upgrading their IVRs to enable a caller-led experience, there are a few design best practices, as follows:
Greet callers with open-ended phrases
The limiting nature of touch-tone IVRs forces callers into silos where they must choose from limited options. For example, a customer may want to change his or her billing address but only hears the options “billing” and “technical support” – neither being what he or she is seeking.
Don’t guide callers to popular responses
Providing example responses, such as “You can say things like ‘refinance’ or ‘what’s my payoff,’” causes callers to ask for things they aren’t actually interested in, driving misroutes.
Use as few words as possible
Short and concise prompts limit confusion and avoid wasting the caller’s time. For example, extra words, such as “Please listen carefully, as our menu options have changed,” add no value and ultimately irritate callers.
Don’t make borrowers repeat themselves
Once a system has discovered the borrower’s intent for the call, it can then pass this information to the contact center rep, through either computer-telephony integration or a whisper message. Nothing frustrates callers more than having to say why they are calling all over again.
Finally, to avoid one of the most frequent complaints, if borrowers authenticate themselves in the IVR, do not make them do so again when they reach an agent.
Once the IVR is handling common requests and routing calls to the best resource, it’s time to take the borrower’s experience to the next level – through personalization.
Making it personal
The most modern IVRs draw on readily available information (such as customer phone numbers, browsing and interaction history, transactions, and more) from back-end systems to anticipate customer needs before even saying “hello.” Borrowers notice the difference. In fact, research shows that when IVRs are more personalized, callers perceive the system as more effective. Examples of IVR personalization include the following:
Personalizing your greeting
Using automatic number identification, an IVR can easily compare phone numbers from incoming calls against a servicing system. Then, text-to-speech technology makes it easy to greet callers by name. (“Hi, Matt. Thanks for calling.”)
Up-leveling customer convenience
As evidenced by the CFPB complaint narratives, borrowers don’t like to wait on hold for the next available agent. To avoid this, an IVR can simply offer to call the customer back when the next agent becomes available. If the borrower is already working with a relationship manager on a loan modification, the callback can be queued for that specific agent.
Adding more context to every call
The most intelligent IVRs go beyond quickly identifying who is calling and can actually anticipate the reason they are calling, too. By reviewing recent browsing, interaction and transaction history, IVR technology can accurately infer customer needs and help them get the answers they need even faster.
Remembering customer preferences
Just as today’s IVR technology can work with a servicing system to determine who is calling, it can also identify and store things such as a customer’s preferred language, payment method and even communication channels – allowing the servicer to create an even more personalized experience, each and every time a borrower calls.
What’s it worth to you?
Even if a project has the imprimatur of a compliance requirement, if it’s going to get resources, there needs to be a business case. Luckily, along with improvements in customer satisfaction, modernizing an IVR will drive significant hard-dollar savings.
A major servicer recently upgraded its IVR to replace a DTMF menu interface with an NLU-enabled speech recognition experience. The old IVR received more than 1.7 million calls in 2014, and only 48% of those were fully handled or “contained” within the system. The other 52% required a transfer to a contact center agent. Using a conservative cost of $6.50 per agent-handled call, the servicer estimated it had spent nearly $6 million handling the transfers. When the new NLU IVR system went into production in 2015, containment increased to 61%, projecting savings of over $1.5 million in the first year and $7.5 million over the next five years.
Although containment is only one measure of IVR benefit, it provides a strong financial incentive to pursue the improvements previously outlined. If making these changes to an IVR could also help meet the CFPB’s expectations for upgrading servicing technology, that’s all the better.
And if these changes delight borrowers instead of driving them to complain, it will be a win-win-win investment.
Brian Moore is a senior principal at Nuance Communications, where he advises clients in retail banking, mortgage and other lines of lending on customer experience, collections strategy and regulatory compliance. He can be reached at firstname.lastname@example.org.