Banking

How fast-growing neobank Novo met its customer service challenge

In the early days of Novo, a challenger bank for small businesses, its founders answered every customer query personally from their Gmail accounts.

The Miami company’s approach to customer service has changed a lot since then — by necessity. Its customer base jumped from 300 users in January 2019, while Novo was still in beta, to 5,000 users by the end of that year. The numbers climbed into the tens of thousands in 2020 and swelled to more than 100,000 this year.

Brian Kale, director of customer success at Novo, started streamlining customer interactions with software from Zendesk when he joined in January 2019. But in the early months of the pandemic, Novo stepped up its efforts by using Zendesk’s technology to automate responses to customer queries, track common concerns and summon valuable customer information during a service request.

Besides lightening the burden on its staff, these tactics will help the company handle requests more efficiently as its customer count grows.

Novo’s investment in customer service technology comes at a time when other fast-growing neobanks have struggled to keep up with customers’ demands. It also comes as competition for small businesses’ bank accounts is picking up among banks and fintechs.

Speed is paramount for small-business owners, said Ian Benton, a senior analyst in digital banking at Javelin Strategy & Research. In his own analysis of the Novo app for Javelin, he has found that customer service representatives respond quickly to in-app queries. In fact, Javelin research shows that among the top 25 retail banks in the U.S., only three have in-app messaging with a human, meaning Novo’s offering is rare.

“This is light years ahead of most traditional banks, even the largest ones,” said Benton. “They might have chatbots, but even then, they want you to call them or set up an appointment for more complex questions. In-app chat is a key differentiator for the few neobanks that are doing it.”

Novo’s changes have already had an impact. In 2020, as the world started to lock down and the company went remote, Novo’s weekly ticket count climbed to about 1,800 per week for three representatives to handle. (A ticket is an inbound request from a customer via phone, email or another channel.) As Novo transitioned to Zendesk’s cloud-based voice system, ramped up its automated answers and deployed a custom app that gives agents more information about a customer contacting the company, the number dropped to about 1,100 tickets per week.

The company entered 2021 with five support representatives and has increased that count to 30 over the past seven months.

“Novo realized quickly that in any industry, not just banking, the differentiator between you and competitors is the customer experience,” Kale said.

Some simple design changes encouraged customers to do their own research rather than submit a ticket. For example, in the spring of 2020, Novo experimented with reversing the order in which the two options for seeking support were presented in the mobile app. Instead of first listing the option to contact support, Novo moved its frequently asked questions to the top of the page.

That nearly doubled the ratio of article views per ticket created, Kale said.

To address phone calls, Novo transitioned from landlines to Zendesk Talk, the company’s cloud-based call center software, within days as employees scattered across the country to continue doing their jobs remotely.

Converting to Zendesk Talk allowed Novo to manage all customer communications from one place, whether they take place on email, phone or chat. Novo tags calls, along with other customer tickets, which means it labels the interaction with words or phrases that indicate the subject matter. These tags are aggregated weekly and monthly so the company can detect trends, investigate common customer needs and justify new products.

For example, Novo introduced “Novo Reserves” in January, which are subaccounts that customers can use to organize the funds in their main accounts. The neobank found this was one of the most common requests from its base, especially “profit first” business owners who wanted to ensure taxes, payments and income were properly balanced.

Novo also integrated Zendesk Answer Bot in the spring of 2020. This is a feature that uses artificial intelligence to pick up on keywords in channels such as chat and email and provide answers to simple questions. For example, a question about how to activate a debit card may call up an article with instructions.

Kale estimates that 80% of customers are open to this quick-answer interaction, which normally takes place over chat and email, and that Answer Bot helps deflect 5% of tickets that would otherwise have gone to an agent.

“We see customer tickets in two ways,” said Kale. “One is a question that a customer just wants answered, and automation is great for that.”

The other way, he says, is a problem that requires human interaction. To give its agents more insight about a customer when they reach out, Novo built a custom app with Zendesk’s open application programming interface. When agents receive a ticket, they view an on-screen dashboard with a profile of a business owner, including recent interactions, meaning they don’t have to flip between screens or put the customer on hold to look up key details.

Kale estimates this shaves 30 seconds off each ticket. “The loading times, logins and mouse clicks can really add up,” he said. “The number of mouse clicks for some tickets could be in the hundreds.”

Currently, Novo is at 10 article views per ticket created, meaning there are 10 articles viewed by anyone on Novo’s help center compared with how many tickets are created. Kale says he hopes to reach a ratio of 30 to 1.

Kristen Durham, vice president of startups at Zendesk, said Novo stands out in three ways: It maximizes Zendesk’s core functionality, it created its own product using Zendesk’s APIs, and it is using technology that will help the company scale up in the future.

This high-touch service is especially important for Novo’s customers, which are largely one- and two-person companies. Benton finds that Novo differentiates itself from neobank competitors with personalized service, comprehensive FAQs and speedy human responses.

“While [our customers] are small businesses, many don’t recognize themselves as businesses but think of themselves as a person,” said Kale. “They have consumer-grade demands and expectations.”



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