For a long time now I've been saying that video will be a key channel for banks.
I first wrote about this in 2004, it also appeared as a theme in my last book, and I regularly debate the subject. The last time was at the Financial Services Club in September, with an in-depth white paper available for those interested.
The reason I mention this today is that I actually got to use the latest state of the art video facilities this week at Cisco. They have a system called Teleprescence, which looks great on the adverts:
In fact, I've used the adverts to illustrate video banking for a while now, but this is the first time I actually got to use the system live myself.
That's Celine and her colleague by the way, who happen to be in Germany.
I was briefing a range of folks on German banking trends, and the teams were in seven cities spread across Germany.
It is a great system with high-definition sound and screen, unlike the photograph above which was taken on my mobile. Given the fact that technology and bandwidth are all reducing in price, don't be surprised to see this in your living room within the next two to three years.
Yep, you heard me. Anyone with an HD-TV or HD-PC or HD-Mobile will be able to get interactive HD-social networking, as well as watching Blu-Ray and HD films and TV.
This may be on the Cisco system or through alternative systems, such as HP's Halo and Tandberg's Experia.
This is definitely the future delivery channel for service organisations like banks, as it is visual and intuitive.
So it surprised me that, at the Club's debate, most of the bankers said 'no' (!), this is not the future delivery channel.
They said no because of arguments that James Gardner of Lloyds TSB and Bankervision proposed, which were pretty compelling.
I knew they would be because James has an ability to argue either way he wants to, in order to get a reaction. This is why he heads up innovation at his bank, and also why I invited him to lead the debate as it makes him a great debater.
I enjoyed his arguments so let's look at them.
"Firstly, I don't think the largest part of our new customer
demographic - the ones who do Internet as main channel, for example -
are all that fussed about having a two way visual communication. Their
channel choice is as self service as it comes. They go out of their way
to avoid any face to face contact with their branch."
I don't agree. The fact that customers type, self-serve and use the internet is already a radical departure from ten years ago, when they just used the phone and twenty years ago, when they just had a branch and an ATM.
People move to whatever is intuitive and easy, and having HDTV access to their branch manager and advisers over their watch, mobile, TV or any other device is the way to go for the future.
"What about the people who presently do
go to the branch? These, presumably, are the ones who would benefit
from greater access to expertise that comes from the 'on demand'
features of video: the idea that you can call in an expert over the
video link from anywhere if no one local is available. Now, if a
customer makes a channel choice to have personal contact, what are the
chances there will be delight when we put him or her in front of a
video screen? I think not much."
Again, if the local branch manager in megabranch is available anywhere, anytime, anyplace remotely and in high definition, then surely that's good. It will be a natural evolution.
"Anyway, just what is the
business case for video? Does it result in new product sales? Does all
this on-demand expertise reduce customer churn? Who can know, because
there just aren't all that many banks doing it at the moment. There is
all this anecdotal evidence, apparently, that customer satisfaction is
up, that product sales are up, that every metric of interest to a
banker is up. But no-one has shown me any evidence that really stands up."
It will result in sales as the Cisco advert tries to convey, although this is part of a sales process.
The first meeting probably has to be face-to-face before the second, which can be remote. This is because once you've eye-balled someone you trust them. The fact that you are eye-balling them after the first meeting through HD devices, simply makes it more trustworthy.
That's the point.
It's part of a process of sales and advice that enhances that process.
my thinking on this. If the business case for remote video advice stood
up, a similar case for remote voice advice would also have stood up.
Yet, so many banks, who are fully equipped with telephones, don't do
remote voice advice. Why?"
Well I get remote voice advice on pensions and mortgages. It's called a telephone call to my adviser.
"And here is my last point. It would hardly be all that simple to make the bank
end of the video link represent a bank's brand values perfectly all the
time. Consider this: it is a call centre, and it is two AM. The staff
have worked maybe six hours of an 8 hour shift. They are tired, and
they probably don't look perfect."
That's why this will be such a challenge for the banks of the future.
The process means changing hiring policies and structures and processes ... it will be as revolutionary as telephone banking and internet banking; if not more so, because it demands avatar servicing and strong human skills for when customers want to engage remotely via video.
But James's point that there are very few banks who do this today is a key one, because when customers do engage and have this available to them, they will want to see it being available from all banks.
That's what happened with telephone banking in the UK, when First Direct found they were dealing with 100,000 new account openings per month, as people defected from other banks to get their better services which just happened to be remote.
With video banking, it will be tough to deliver because the banks are not geared up for this channel and, in my view, it will take them at least two years to gear up for it, to understand the processes, the hiring policies, the structures and the idiosyncrasies.
Many will fail.
So, give it a few years and most banks will connect with customers through remote branches and in the home over HDTV. Then we will see some clear winners, as in the next First Direct (UK, telephone banking) or eBank (Japan, internet) appears, and some clear losers.
A few more years and we will be in the world of truly magnificent communications as demonstrated by this excerpt from Star Wars versus Star Trek (for those who like this stuff, like me, this is well worth watching):
Mind you, even that's out of date already.
Ladies and gentlemen, let me introduce you to the next generation of banker.
The holographic one ...
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...