Video banking 2.0 targets retail bank productivity

Pranger: video can help retail banks better serve customers

Once considered too difficult and unreliable to be viable, technology has progress to the point where video banking can now help banks increase engagement with the retail customer while cutting costs, according to Gene Pranger, chief executive and founder at uGenius, a provider of personal transaction technologies.

“Customer expectations have changed,” he said. “ATMs have been limited in their usefulness. They could show you information but there wasn’t much interaction. Video banking points can provide a full service that lets you do everything in one go.”

The idea of having a video banking service is not new. As far back as the mid-1990s, financial institutions were experimenting to find a solution. According to Pranger, one of the first video banking systems was installed on the campus at the University of California, Los Angeles in 1996. But those efforts never gained widespread traction, partly because of bandwidth and reliability issues, and partly because of consumer expectations.

“This was before most people used the internet,” he said. “Consumer acceptance of kiosk solutions was not so high, nor were people used to using self-service technology, as they are today. The customer didn’t understand it, and it was also difficult to keep the technology operating.”

Today, the idea is to combine video banking with extended business hours, so that consumers can access retail banking services seven days a week and late into weekday evenings, removing the pressure to consume services during the working day when most people are busy.

“Who wants to take their lunch hour and go to the bank? You can’t just have staff working between 11AM and 3PM – that’s not modern,” said Willard G. Ross, chief retail officer at Coastal Federal Credit Union. “The ability of this technology to help us extend the hours of service is a real tangible benefit to the consumer. Also, if you use a cheque at an ATM, there’s a two-day delay before it’s processed. If you use a video point, it is resolved immediately.”

Drive-through video banking solutions are already available in the US. BBVA Compass, a bank that provides banking, wealth management, credit card and financial services, adopted a drive-through ATM with the help of Wincor Nixdorf. The Cineo 2590 uses face-recognition technology that is designed to identify the driver at any level. To ensure security, the ATM uses directional hearing technology – meaning that private conversations about personal finance can only be heard by the user.

From the financial institution perspective, the technology may also offer the prospect of cost savings, according to Ross. In the past, if an institution was operating 63 bank branches, it would need a minimum of 63 staff to cover those locations. But with the arrival of standalone video banking points, the staff count can be greatly reduced, as only a few of the machines will ever be in use simultaneously.

“It takes away the brick and mortar concept,” he said. “Instead of having 63 members of staff covering 63 banking locations, you can have seven and cover them all from a centralised point. At the same time, you can’t build branches everywhere – this technology helps fill in the gaps.”

Coastal Federal Credit Union plans to install five new video banking points in the New Year. Meanwhile, uGenius has an internet-based tablet app that allows users with smartphones to engage with their banking service providers. Although at a relatively early stage of development, the aim is to provide a service in which the consumer can connect to a bank specialist such as a mortgage officer, whilst on the move.

“Wherever there are smartphones, you can have a conversation with a provider,” said Pranger. “The difficulties are more perceived than real. Once customers gain confidence, and especially once 4G comes along, the sky is the limit.”