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Video Banking – The Future Face of Banking?

Is banking a people business or a technology business? For smart banks, it’s both because digital technology works best with humans. The aim of digitalization is customer delight and video banking can improve customer convenience and foster better banking relationships. This blog considers the benefits of video banking and underscores the importance of its role in banking transformation strategies.

For most major banks, digital-first banking has been a priority for years. Around the world, the pandemic accelerated branch closure programs as transactional banking moved online. However, bank closures can harm local communities, and recently regulators have stepped in to protect the vulnerable. In October 2022, the U.K. Financial Conduct Authority issued guidance on how banks should manage branch or ATM closures to ensure that proper account is taken of all customers’ needs. Banks need to consider how their branch network should support a customer-centric strategy in the digital age.[1]   

People still visit branches, but less often to transact and more often to seek advice or complete a journey that began online. Banks are acknowledging this changing role of the branch with many being repurposed as advice and guidance centers. While this makes sense, there’s a lot to consider and technology plays a crucial role.

Digital and Human Convergence

The branch of the future will offer customers the best of both physical and digital experiences. For many banks, this is a significant challenge. Bank channels have often evolved along vertical lines. In the beginning, there were only branches followed by an expanding range of channels: telephone, ATM, online and mobile. The truth is that customers have little interest in channels – they want to bank their way, regardless of the channel. From a bank perspective, this can be difficult as each channel may be managed separately with its own team and technology stack. Can technology unite bank channels and bridge the gap between the physical and digital? One interesting development is video banking.

Video Banking

Video banking is a remote one-way or two-way conversation between a bank representative working in a call center, branch office, or from home and a bank customer or prospect. The pandemic boosted video banking, and banks that had the right technology were well-placed to help customers weather the storm. But video banking has quickly become mainstream as a way to personalize customer engagement without a branch visit.  Let’s consider popular use cases and the benefits available to banks and their customers.  

Video Teller Machine

A video teller machine (VTM) is an electronic banking outlet that may act as an evolution of an ATM. It allows customers to complete basic transactions, request banking services, or receive immediate assistance via live video conferencing with a remote bank teller. A VTM can help customers perform basic tasks, such as dealing with a forgotten PIN number, which can be resolved by answering security questions. In addition, customers can withdraw cash and seek assistance with basic banking questions using video conferencing. VTMs offer many of the benefits of an ATM – they can be located strategically, are available 24/7, and act as remote ambassadors of the bank’s brand.

In-Branch Video Consultation

In-branch video consultation allows customers to speak with a specialist at another branch or central service location. Many banks have introduced video consultation as part of their branch transformation program; those that have not should consider doing so soon. In most cases, a bank will provide a private booth or office area at a branch where a customer can receive financial advice, perform cashless transactions, or hold a personal financial discussion with an expert video banker. From a bank perspective, video consultation is an ideal way to combine technology with a personal touch while optimizing staffing levels.

Remote Video Banking

Remote video banking offers customers the opportunity to interact with a banker remotely, using a device of their choice. It is in many ways a natural evolution of mobile banking. The service may be offered on demand – to answer basic banking queries – or by an appointment with a specialist to discuss a specific topic.

Remote video banking offers banks a great chance to proactively offer a financial health check to help customers align their finances with life goals, for example to:

  • Open the right accounts for their needs
  • Save for life’s big moments
  • Buy a first home or refinance a mortgage
  • Evaluate loan and credit options
  • Plan for retirement

Customers who value the personal touch can conduct transactions similar to in-branch, while the bank can build an engaging dialog and seize opportunities to upsell and cross-sell. Remote video banking benefits both the bank and the customer: customers appreciate the convenience, while the bank can field the right staff to enrich the conversation and promote the relationship.

The Value of Integration

The key to success in video banking is integration with the bank’s core platform and customer data. Video bankers need to have customer insight so they can extend optimal service and add value to the conversation. Customers must be able to begin a journey on any channel and seek video assistance at any stage of their journey. For many banks this is a challenge, and some will need to rethink the entire digital process.

On its own, video banking is of limited value. But as part of a digital customer engagement strategy, it offers customers choice and the comfort of human support. Banks benefit too: video banking can be part of a next-generation banking experience that combines artificial intelligence (AI), chat, and voice – all with seamless transitions between them. For banks that choose the right technology strategy, video banking is not a new channel but another milestone and welcome feature on the customer journey.

 

[1] https://www.fca.org.uk/firms/future-access-cash/branch-atm-closures-good-practice-areas-improvement

 

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