Alpar Caglayan Targeted ‘mega-companies’
When the Internet first started gaining momentum among non-techies, the hype was all about a global community and business made simple and cheap. What followed, however, was the dot-com mania where investors sank millions of dollars into start-ups, many of which didn’t anticipate the problems associated with Internet business.
The hangovers following the tech wrecks of 2000 are just now dissipating and another new dot-com has entered the market. But the goal of its product is to lower the cost of doing business in the financial services world.
Based in Cambridge, the one-year-old Peoplestreet scored quite a coup earlier this month when it signed a partnership agreement with the multinational Bank of America to provide its LiveCard product to customers and employees of the bank.
The idea behind the product is simple. “What we have is the electronic generalization of the printed business card for individuals and the electronic generalization of the plastic affinity cards for the enterprise,” said Alpar Caglayan, chief executive officer of Peoplestreet. The card looks much like the business card some professionals use at the bottom of e-mail. However, this card is vastly different.
“Those are just HTML, cut and pasted right into the signature [line of the e-mail]. Ours is a link,” he said. If the recipient isn’t a client, the program directs them how to download the free software. After it is installed installed, the program asks whether it should add the LiveCard address to the address book. Once in the book, every time the contact’s information changes the information is automatically changed in the subscriber’s address book so that the contact information is always updated and correct.
If for instance, a phone number changes, subscribers may access their accounts in Peoplestreet, change the information and send it to all of their contacts. The entire process to set up the account takes less than a minute.
Having information automatically changed in an e-mail address book is reminiscent of the nightmare “I Love You” virus that accessed Microsoft’s Outlook and sent the worm to everyone in an address book. But Caglayan said the virus wouldn’t be possible through the LiveCard product.
“Before we wrote a single line of code we did a user needs and wants study. . .Everyone was very worried about getting attachments. So we designed our service such that we’re really transmitting a link. We’re not really using the e-mail protocol to transmit data. When I send it to you we have a lot of very strong encryption in it so that all data transfer happens just like a secure Web browser without being visible in the background,” he said. There are no executable programs attached.
While landing industry giant Bank of America as a client is impressive, Caglayan said the product was designed to be of the most use to very large companies.
Caglayan said the company realized how hard it was for them to keep up with their own contacts and studied what industries are most affected by the problem. “Out of that came … a couple of verticals – financial services, executive search and the travel industry – where keeping in touch was very expensive for the enterprise. We decided to go after the mega-companies. Our reasoning was that these are the folks with the largest amount of pain.”
According to research by Mercer Management Consulting in New York, it costs the banking industry at least $5 a customer to keep information up to date through call centers. According to Daniel Friel, senior vice president of the strategic alliance and investment group at Bank of America, that cost is about the same in his organization. Using his own address book as an example, he said about 50 percent of the contact information was inaccurate in some way.
“One of the things that Bank of America is really focused on is how do we make it easier for our customers to do business with us … It filled the niche, quite frankly, where we didn’t see a product that was out there. So granted, yes, they’re [Peoplestreet] an earlier-stage company – but again, they have an innovative product that’s really going to help us be affective with our customers,” said Friel.
Currently the bank is working on a pilot program using Peoplestreet’s product with plans to roll out the customer and employee programs later this year.
With over bank 100,000 employees, keeping in touch with each other becomes much more difficult, said Caglayan. Add to that the sheer number of calls from customers and the amount spent per year on updating information is staggering. Typically, about one-third of customers experience a change in at least one aspect of their contact information per year. If a bank has 30 million customers, that figures to $50 million per year for simple address or phone number changes, he said.
The cost for the system is priced per user, per year, with Caglayan estimating that total costs should be about 20 percent of what banks typically spend on keeping contact lists updated.
Because of its relationship with Bank of America, Caglayan said it will be compliant with all regulatory demands and, because it is an opt-in system on both ends, privacy can be protected. Additionally, when a customer updates information, the program asks which contacts on the list should be updated and the customer can decline to update certain contacts.
