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IVR Security Is A Necessary Evil

British firm Biometric Security warned last month that the unceasing need for customers to remember new PINs and passwords is becoming unsustainable and could lead to customer churn.
By Leonard Klie - Posted Apr 1, 2007
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British security and information management firm Biometric Security warned last month that the unceasing need for customers to remember new PINs and passwords to access accounts through a customer call center system is becoming unsustainable and could be damaging institutional reputations, as well as leading to customer churn.

"Strong identity verification processes are now seen by virtually all businesses as critically important, and most make some attempt to verify a caller's claimed identity by asking for additional information that only a true caller would know," notes Steve Morrell, author of the report "Caller Identity Verification: Challenges and Opportunities." "However, identity verification procedures have become intrusive and inconvenient for the customer. Customers are expected to remember an increasing array of IDs, passwords, PINs, memorable information, information on last transactions or to carry smart cards or tokens everywhere they go.

"Customers can undergo a Spanish Inquisition before being permitted to make their inquiry or place their order, which reduces customer satisfaction," he adds.

This warning comes as new research shows that contact centers in the United Kingdom spend roughly 820 million pounds (equivalent to almost $1.6 billion) a year on caller identification procedures. In the United States, this figure reaches $10 billion per year.

Those caller ID verification processes fall into three types: collecting additional personal information, such as a PIN, password, or the three-digit CV code on the back of a credit card; collecting physical evidence, such as a fingerprint, retina pattern, or voice print; or asking the customer to use a PINgenerating key fob.

Most of these procedures are "not particularly secure and often inconvenient for customers," the report notes.

The new research revealed:

  • Ninety percent of U.K. contact center interactions still involve personto- person phone calls. Telephone IVR systems accounted for 4.2 percent, followed by email (3.9 percent), letter (1.5 percent), fax (0.2 percent), SMS (0.1 percent), Web collaboration (0.1 percent), and text chat (0.1 percent).
  • U.K. citizens spent 47 billion minutes on the phone with contact centers during 2006, making more than 10 billion separate calls. In the U.S., callers spent 266 billion minutes on the phone with contact centers.
  • The average time spent on a single call to a call center was 260 minutes in the U.K. and 300 minutes in the U.S., of which the average time taken to manually verify a caller's identity is 22 seconds with a live agent or 19 seconds with an IVR. In vertical markets, finance required the most time (32 seconds), followed by telecommunications (31 seconds), telemarketing (28 seconds), IT (26 seconds), retail and distribution (22 seconds), utilities (18 seconds), public services (15 seconds), and transport and travel (13 seconds).
  • In the U.K. 42 percent of calls to a contact center required ID checks. In the U.S. it was 45 percent.
  • Costs to reset forgotten PINs or passwords range from about $10 to about $30, not to mention the lost business that results during the time that the customer cannot use his account.

The emergence of voice biometric technology for identity verification has the potential to radically improve the user experience by eliminating the need for PINs and passwords. This solution can also substantially reduce operating costs for contact centers. By automating the identity verification process, a typical 1,000- seat contact center could save more than $2.7 million per year.

"In trying to adhere to regulatory pressures and better protect customer data, call centers are establishing more complex identity verification procedures that are simply driving away customers," claims Paul Lindsey, executive chairman of Biometric Security. "Customers want to know that their personal information is protected, but they are starting to demand procedures that are simpler and more convenient. They don't want to have to take an intelligence test to access their bank, utility, or shopping accounts."

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