Video calls are now a standard feature on smartphones, but getting customers comfortable with talking to a person on a screen remains a hurdle to the adoption of videoconferencing in branch banking.
Extraco Banks in Temple, Tex., for instance, began using videoconferencing 10 years ago. But the bank's tellers are still busy with walk-in customers on payday Fridays, and its high-definition video phones tend to be used more by retail customers than commercial clients.
"We wanted to be able to connect customers to someone that’s a product champion, that knew a lot of answers and could take a deep dive on issues like a customer dispute on a really busy day," said James Geeslin, vice chairman of Extraco Banks and CEO and president of Extraco Consulting.
Even large banks that have invested in the technology have had to actively push it to customers.
In the past two years, Bank of America has built 23 advanced centers — small branches ranging from 1,200 to 2,000 square feet in space, unstaffed but equipped with videoconferencing and sensors — and equipped 850 financial centers with videoconferencing technology.
But Bank of America’s branch transformation team has found that customers are less intimidated by the technology when they’re guided through its entire use, said Jon Wolf, Bank of America's senior vice president of consumer business transformation.
To reach its full potential, industry analysts say, videoconferencing in bank branches should be serving the small business customer and customers with complex needs like mortgage origination. In a forward-looking study by McKinsey & Co. published on Thursday, researchers predicted that videoconference rooms would play a part in helping customers connect to specialists.
“In the old days you would have a mortgage originator get in their car and they’d be at one branch this day and another branch this day,” said Jim Burson, senior director at Cornerstone Advisors. “They would rove or they do things by appointment.”
In an Aite Group survey released earlier this month, 71% of 290 millennial-run businesses said they would be interested in using videoconferencing; only 47% of 254 baby boomer-run businesses expressed the same interest.
“When we talk to small businesses about level of interest,” said Christine Barry, senior analyst at Aite Group, “we’re seeing high levels of interest, but it does depend on the age of the person.”
Bank of America has opened up videoconferencing to retail customers, but finds that the technology cuts down time especially for commercial clients in financial centers who more often require a specialist.
“To provide that access immediately without them having to schedule another meeting and come back is really where we’re seeing the best feedback,” Wolf said.
When introduced, videoconferencing was presented as a way for banks to reduce costs at branches. It has potential to reduce or actually increase cost, said Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy & Research.
The technology could help a bank reduce the amount of employees, Schwanhausser said, but also could add cost as customers expect to be able to always access higher-paid bankers that are more specialized. “It’s not like you can throw any college kid on the videoconference line,” he said. “I think there’s going to be a bunch of factors that come into play when it comes the cost.”
For Extraco, the technology has helped reduce operating costs; the company estimated video phones have contributed to a 30% reduction in full-time-equivalent work.
Bank of America plans to use the technology to improve employee efficiency. At the same time that the bank has rolling out more video-only advanced centers, it has been deploying more specialists in its branches, Wolf said.
In the Bank of America’s advanced centers, a smart concierge screen turns on and a banker on-screen greets the customer and begins to explain the capabilities of the branch.
When customers experience the branch for the first time, "They're surprised," Wolf said. “They are used to having to wait in the lobby.”
If the conversation at the welcome screen has to run longer, customers are directed to a videoconference room, where the bank’s greeter can transfer the customer to a specialist.
“That same person that greeted them in the lobby is waiting for them in that conference room,” Wolf said. “It’s a familiar face and we've already started the dialogue, so you don't have to start all over again.”
