Two-way, interactive customer-facing installations show promise for cost savings, increased service
Imagine doing away completely with an in-person teller line and instead offering branch customers a row of what look like automated teller machines on steroids, each with a high definition monitor, the other end of which is focused on a customer service representative located in some centralized location that may be miles away. The customer and rep conduct business screen-face to screen-face in real time and can complete just about any transaction an in-person teller could do. The rep would automatically be able to address the individual by name, because the customer’s identification would be verified and all the account information would be available instantly. Cash could be dispensed, checks received, forms signed, and most any problem solved. Then imagine having this capability at 2 a.m., or whenever the customer found it most convenient to do business.
That’s one scenario of video banking that is starting to take shape, if not in the United States, yet, then in a number of other countries—notably Great Britain, India, Germany, Norway and, more recently, New Zealand, Australia, and South Korea.
A handful of credit unions have already embraced this technology, however. Gene Pranger, CEO of uGenius Technology, Sandy, Utah, which has been working with several credit unions since 2009 on such systems, claims they reduce staffing, increase operating hours, free up managers to focus on products and services, and boost employee retention. Also, he says, “through consumer research, we’ve found that 90% of customers who use our machines are either very satisfied or extremely satisfied with their transactions.” He adds customers find it faster, easier and more personal than traditional teller lines.
If that seems odd, consider that in some urban locations, teller transactions are conducted through plastic bandit barriers, and also that younger customers have been raised on video and texting.
Step into the high-def room
In a second scenario of video banking, imagine a customer coming into a branch needing the services of a particular loan specialist or licensed professional, but that individual is physically located miles away in another branch. Instead of forcing the customer to make an appointment and come back another day, a bank rep would direct the customer into a special room set up with high definition video screens, cameras, finely tuned acoustics and lighting. The bank specialist would go into a similar room down the hall from his or her office, connect over special lines and immediately get down to business. This so-called “immersive” connection offers life-sized video of each individual and allows the illusion of a face-to-face meeting.
“It is almost like being there. You can’t shake hands, but you can exchange business cards,” says David Stern, who is global video services leader for IBM. He’s helped set up such systems for businesses in Canada, Italy, Denmark and Greece, and sees a lot of potential for such applications for banks in the United States. “It’s taken a while but retail organizations are starting to figure out how to leverage the technology in an affordable way to generate revenue…I think it’s coming,” he says.
Many larger and regional banking companies have already embraced video conferencing as a way to facilitate staff and executive communications. Back-office meetings, training courses, and other consultative, in-house sessions have offered serious savings in travel time and costs, boosted productivity, and reduced corporate carbon emission tallies. Bank of America, in fact, recently contracted with Cisco Systems Inc., Charlotte, N.C., to install 200 “Telepresence” rooms across its office network, targeted specifically for staff-only use.
This is different from video banking with customers at the retail level, however. Security for the types of things discussed in a customer-facing video system, while stringent, would be much different from the type of security required for the back-office video conferencing networks, says Jonathan Brust, vice-president/marketing, Glowpoint Inc., Hillside, N.J.
His company recently worked on a two-year beta test of a customer consultative video banking system for Citigroup. Operating out of a call center in Dallas, the bank can connect various employee experts and professionals with customers at any of its 4,000 branches or other retail outlets.
“We did a case study with Citi and they found that instead of having a person walk into the bank and then walk out and go to another bank where [a particular] expert might be physically present, the person was willing to sit down with the video banker and close the transaction,” says Brust.
An important point to make is that this type of video banking has very little to do with the kiosk stations that some banks tried out in their branches years ago.
“Today the video capabilities are vastly improved from anything that was available a decade ago,” says IBM’s Stern. “Things are much more interactive now. Much more real life. The video can do anything from being a replacement for being there in person, to enabling many other things from transactions to relationship building.”
Pranger adds that the kiosks of old “never did anything beyond what you could do at home or anywhere else.”
Cisco Inc., has indicated it’s ready to cross over into the video banking world. A 2008 white paper it published on the topic makes this point: “Attempts more than a decade ago to use video kiosks in bank branches failed. Quality was poor, file sharing was nonexistent, screens were too small, and consumers had no experience or interest in video communications. Today the context is quite different. Video technology is far better, is part of the same infrastructure as other channels and is popular due to YouTube and other social networking websites.”
One advisor for the whole region, via video
The question becomes—is video banking merely the domain of large banks with hundreds of branches, or can it be applicable and economical for community banks?
“It really can be applied to any size bank as long as it has multiple locations,” says Glowpoint’s Brust. “Obviously, if you only have one or two branches it doesn’t make sense, but whether you have ten locations or whether you are a large global bank where you can’t house a bunch of experts in one location, it really makes sense to do it. In fact, the reason why it’s effective has more to do with the ability to close the transaction.”
Adds Stern: “From the customer’s point of view … it can let them meet with licensed professionals who aren’t even at the branch, and do it in a way that they quickly forget they are using video technology, which is actually the best selling point.”
The global leader in producing video conferencing systems is a company called Tandberg, with dual headquarters in Norway and New York, and which recently was acquired by Cisco. David Luff, practice leader for bank and finance, wrote in a Tandberg communication: “We are moving from a services economy to an experience economy … Thanks to more bandwidth availability, costs coming down and video technology quality greatly improving, applications we used to dream about are now within our reach.”
Further on in that paper he makes these points: “In the banking world, one can come up with solutions for sparsely populated areas —one adviser can be available for the whole region, just by video. The technology actually allows for on-demand staffing, since it is impossible to have all experts in all branches. … If a bank manager does not have the authority to approve a loan, he could get approval via video. New delivery channels like mobile banking could be used. And most important, the customer will have a better experience.”
That brings up the issue of cost. A full bells-and-whistles immersive video conferencing room can cost upwards of $300,000 says Glowpoint’s Brust. On the other hand, he pointed out, an initial investment of “a few thousand dollars” and less than $1,000 a month to have the technology on site, could be perfectly adequate. “The idea is that you can get a little bit lower quality of equipment as long as you make sure the call is always up and available,” he said.
Pranger wouldn’t get into cost specifics on uGenius’s personal teller machines, but one indication of their affordability is that a credit union in North Carolina bought 50 of them to put in its ten branches.
IBM’s Stern offers this perspective on costs, applicability, and prospects for the new video banking: “My sense is, as spending starts to come back, banks will start to look at how they manage relationships, how they can enable revenue growth through additional transactions. The business case for these solutions is there to be had for community banks on up. It’s just a question of how do you size it the right way.
“The most important thing,” Stern continues, “is this technology doesn’t replace thinking about how to service the customer. It augments that. That’s the key. It cannot be successful just as a technology you put out there and see if anyone uses it. It’s got to be very clearly brought into the process of what products are we trying to sell? How do we work with our customers? How do we manage > relationships? And how do we make that better?”