September 29, 2005
VoIP in the banking sector
Banks and financial institutions, particularly small and mid-sized ones have been quick to appreciate the benefits that VoIP can offer in terms of cost savings and enhancing customer experience. Other benefits include more robust disaster recovery systems, improved CRM, greater mobility for the staff, etc. According to Susan Cournover, analyst with Gartner Inc., VoIP will be indispensable in 70% of the businesses by 2008.
Currently, the education sector is the most enthusiastic adopter of VoIP and accounts for around 35% of the total market, healthcare and financial institutions account for 16% and less than 16% of the market, respectively. Small and mid-sized banks have been the early adopters of VoIP and are using it to improve the service of their customer contact points.
Banks have been a trifle slow in adopting VoIP as there is more at stake with banking services as compared to other businesses. However, the attraction of almost 50% savings in communication bills and the maturing of VoIP have meant that financial institutions are venturing forth to adopt VoIP.
SouthTrust Bank, based in Birmingham, Alabama, saves in excess of $ 5 million per annum after having installed a VoIP solution by Cisco Systems. The savings have accrued due to cost reductions across the communications setup. These include a 20% reduction in cost related to frame-relay circuits, a 51.3% reduction in moving and adding costs, a 94% reduction in conference call costs, etc. The bank is also targeting a 15.4% reduction in the voice and data systems maintenance costs. For the bank, a major advantage of implementing VoIP is that the safety and integrity of its data will not be compromised in the event of a mishap at any of its locations.
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