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Video banking: Lights, camera... transactions & interactions?

August 23, 2013 | Telepresence Options

virtual banker

Story and images by The Financial Brand

August 19, 2013

Telepresence holds great promise for retail banking, but most early-movers are missing the boat. Rather than reinventing the teller experience, banks should pursue video banking as an omnichannel mechanism to improve customer engagement, according to the new report,�"Video Banking: Lights, Camera, Transaction?,"�from�Celent,�an international financial research and consulting firm.

Customer engagement is the lifeblood of retail banking, but it comes at a cost. Historically, banks have relied upon the branch channel (and call centers) to engage customers and deliver much-needed sales results. Meanwhile, digital channels, although growing rapidly, were thought to be the domain of low-value, low-cost transactions and little else. This model no longer works for at least two reasons:

virtual banker consumer interest

  1. Branch foot traffic is declining.�No matter how well banks delight branch goers, these consumers are becoming the minority. Banks must learn how to engage customers digitally, while making the branch channel more efficient and effective.
  2. Customer expectations are growing.�The 8 a.m. to 5 p.m. branch model is inadequate. Banks willing to delight customers with extraordinary convenience and quality engagement will win customer loyalty.

Most financial institutions are persistently devoted to legacy retail operating models that are increasingly challenged to deliver the concurrent imperatives of sales growth alongside cost reduction. But some banks and credit unions are building the capability to engage customers in digital channels while enhancing engagement in the branch. That's where video comes in, and although such institutions are a small minority (at present), but Celent says they're on the right track.

In Celent's view, there are four reasons to embrace video banking in one or more of its forms:

  1. The imperative for branch redesign.�In response to business conditions, declining branch foot traffic, and growth in digital channel usage, banks must increase both the efficiency and effectiveness of the branch channel. Video can play a role.
  2. Consumer acceptance.�Once primarily a business application, mass market usage of video is burgeoning. Its appeal extends well beyond Gen-Y.
  3. Customer engagement.�As more customer interaction occurs in digital media, banks must devise ways of engaging customers digitally. Banks can no longer afford to view digital channels simply as a mechanism for low-cost transactions. Video and chat can play a role.
  4. Solution viability.�Modern video alternatives are light years ahead of earlier solutions, improving efficacy at a much lower cost than before.

Like Skyping With Bankers

Video banking is still a budding technology, but investments by Cisco, Diebold, NCR and others will provide banks with an expanding array of options to deploy video as part of their evolving retail delivery strategy. Thus far, use of video for customer facing applications has been limited, but is growing rapidly. Two basic applications dominate:

  • Video Tellers.�Video is being used at drive-through locations and in branch lobbies and vestibules alongside transaction automation technology to provide a potentially lower-cost alternative to the traditional teller experience.
  • Video SMEs.�In contrast to using video to support routine (teller) transactions, some banks and credit unions are using desktop video conferencing applications to connect customers with subject matter experts (SMEs) such as lending officers and specialized customer support personnel. Only a handful of banks have used video to augment existing digital channels.

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