There is nonetheless substantial value in considering what might be learned and what might be adapted or applied as a result of studying organizations that only provide somewhat-analogous services—if more-routine and less-personal interactions can be accomplished efficiently and with less staff overhead through the use of electronic services, that could, as an additional benefit, help to make more resources available for when more-personal service is needed. This chapter examines large-scale financial institutions having high-volume interactions with large numbers of individuals. The financial services community has been one of the most aggressive and competitive in using IT and electronic commerce. While the SSA is, appropriately, neither as aggressive nor competitive, there are ways in which financial institutions are dealing with situations that are relevant for the SSA. In addition, unlike more recent Internet-based companies such as Amazon or eBay, major financial institutions have had to undergo a transformation away from primarily bricks-and-mortar-based organizations to take advantage of and move into electronic service provision, a transformation much like what the SSA faces. At the same time, there are few “online-only” banks, meaning that most financial institutions have had to expand the kinds of channels through which they offer services, not replace them. Learning from their experience of that transformation may also be instructive for the SSA.

THE TRANSFORMATION IN FINANCIAL INSTITUTIONS

Just two decades ago, banks’ interactions with their retail (individual) customers were almost exclusively walk-in or telephone transactions. Deposits and withdrawals were generally carried out in person, and account statements were printed on paper and sent through the mail, usually monthly. All of that started to change with the widespread deployment of automated teller machines (ATMs) and the creation of centralized call centers. In the 1980s, many services were introduced through proprietary services delivered to personal computers, screen phones, and television sets. However, the story of mass adoption, as well as economically feasible delivery of these services, begins in the mid- to late-1990s with Web-based delivery, fueled by growing public use of the Internet. The net effect of these changes has been to alter the entire character of the retail banking industry dramatically and to transform the way in which it is both used and perceived by its customers. Although not every bank has been as aggressive in all dimensions, there are lessons to be learned from best practices in the aggregate in the industry.

Some aspects of the role, activities, and operations of the SSA have much in common with those of a large commercial bank or brokerage house that maintains accounts and receives and makes payments. These



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