Smarter banks have started using video technology to connect the customer with the right expert and provide quick and personalized service. Many banks are still in the nascent stage of embracing video technology. Even so, they cannot ignore the power of video technology in providing customers better access to more services, while bringing more human touch into digital banking.

1. Image Area
View Point
Video For Financial Institutions -
from novelty to necessity
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2. Video for financial institutions from novelty
necessity to
Visualize a situation where a customer goes to a bank
and asks for a particular service, but has to wait for a long
time due to the unavailability of an expert or because the
branch does not offer that particular service. The customer
will simply switch to a new bank. Every bank wants to
fulfill most of the requests related to financial services,
be it lending, mortgage, wealth management or trading
request in all its branches. But this is simply not possible
due to the high costs of staffing experts in each branch.
This revenue spillage is something that most banks are
concerned about. Smarter banks have started the use of
video technology to connect customers with the right
experts in a very short span of time to provide quick and
personalized service on-demand. Banks are in a nascent
stage of using video to carry on various businesses with
their customers remotely. Through video-enabled Web
conferencing or branch office videoconferencing, banks
conduct high-risk, high-return businesses of discussing
purchase and sale of stock, selling mortgages, structuring
investment portfolios and advising on loans. Compared
to telephone banking, there is a high cross-sell rate
business case for video banking. For example, Banco
Comercial Portugues had seen cross-sell ratios improve
from 3.5 products per customer to 3.8 from 2001-2004.
Differentiation with peers is a built-in factor for banks
offering video-enabled banking.
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3. How video technology is being integrated with the various banking channels?
Video technology can be integrated with almost every banking channel to enable a personalized banking experience for remote as well as
branch banking customers. Branch banking, phone banking, self-service and online banking have already seen video-enabled services provided
by different banks. Video-enabled mobile phones, web-conferencing and online chat have been fresh ways of attracting new customers and
retaining the existing ones. Banks like NAB (online loan processing through video chat), SNS Bank (video web conferencing for instructing the
customers through multi-media presentations) and Bank Sabadell (video-enabled phone banking for addressing customer queries) have been
using video technology successfully.
Customer
Video Phone Bank Branch Self Service Online Service
Video Call Call Center Kiosk Chat
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Video technology integration with banking channels
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4. Challenges for banks implementing the video technology
High bandwidth cost and latest technologies required
To achieve good quality video interaction the bandwidth required is 700 kbps and above; which will enable smooth audio and video
flow without any interruptions. Also requirements like video device, audio device etc., involves huge cost implications, which makes it
challenging for the banks to implement this technology.
Training
Web conferencing through video technology is new to the industry hence; the customer service representatives will not be well equipped
with the knowledge base of handling such calls. Considerable amount of training will be needed to deal with or respond to these calls,
which again is associated with huge costs.
Physical environment
Specialized meeting rooms are required for installation of the video and audio equipment without any visual distractions. This room should
not be noisy to provide the customers with pleasant experience. This again involves a separate setup and may be cost consuming.
Financial Industry - regulatory compliance for video conferencing solutions
Video communication will be subjected to the same regulations which are applied to voice and email communication. For specific
conversations, financial institutions will need to capture and archive records which may be required by the investigative authorities. Also video
communication consists of not just verbal but also non-verbal communication like facial and hand gestures and hence there is a need to record
not only the audio but the video part as well. Financial institutions will have to put in place a robust video compliance system which should be
able to deliver an integrated solution consisting of recording verbal as well as non-verbal communication like hand signals, facial expressions,
documents and white-board presentations. See Figure Below.
Audio Hand-signals
Video
White-Board Technology Facial
Presentations Regulatory Expressions
Compliance
Documents Eye Contact
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5. Business drivers
Optimization of the cost/income ratio
Cost/income ratio (also called the efficiency ratio) is the standard benchmark of bank efficiency. In some cases, bank balance sheets and
cost/income ratio are in an unhealthy state. Reducing the operating costs while increasing revenues is critical. Video banking will help in
reducing the cost/income ratio by decreasing branch banking headcount and improving revenues effectively.
Regulatory compliance
Regulatory compliance of the financial services sector has amplified greatly in the past decade. A key issue is that individual staff members
need to be accredited for certain transactions and this means that lot of time is spent in travelling between branches to meet customers.
Having that expertise ‘on tap’ over high quality video could save costs and provide better service to the customer.
In trading, higher levels of collaboration will result in fewer delays due to compliance issues resulting in a more successful trading process
and video technology can provide that. Portfolio managers can collaborate with research analysts across geographies to discuss investment
decisions. Traders can create peer-to-peer trading desks and the head trader can check all the trading sessions individually or at one go.
Integrate disparate business processes
Early banking concepts and pilots of video technologies were more interested in understanding the technology than the role to be played
within the bank by that technology. Video technology paves way to integrate the disparate processes in the enterprise and bring synergies
between business teams across geographies
Some of the benefits that banks gain from the use of video technology are:
Customer Facilitates in seamless onboarding of new customers after a merger or an
Acquisitions acquisition
Real-time Enables real-time access to expert bankers located remotely. Improves the
remote access quality of interoffice interactions
Video technology implemented in retail branches can provide high value
Value to
product information to customers
customers
Decreases turn around times for closure of customer queries
Enhances
Expansion of video across branch networks helps in information dissemination
branch banking and cross-selling
interactions
Used to connect customer with product experts when selling higher margin
Visual connect products.Allows wealth management experts to maintain visual contact with
clients spread across the branch network
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6. Usage of Video technology in financial services
Video Technology is acting as an enabling tool in driving innovation in the financial services sector, majorly in retail banking, investment
banking (sales and trading) and private wealth management.
Video Video teller technology
services in
Usage: Ideal where financial organizations seek to offer personalized transactional services to customers more
retail banking flexibly. Ideal for one-to one conferences with customers.
Benefit: Optimizes branch resources by focusing on higher value, non-transactional advisory work and permits
wider range of services at branches and unstaffed locations
Sovereign Bancorp of Philadelphia installed two video-teller stations at its Harvard Square branch in Cambridge,
Massachusetts, in August 2006. The two-way screens in the branch’s ATM enable customers to do transactions with
live tellers, using pneumatic tubes to deliver cash, deposit slips, and other documents. These video tellers are open
after the branch closes, enabling the company to offer extended-day services, much like other branches offer at
drive-through windows.
Video chat innovation
Usage: Ideal for engaging contact centers in a video call dialogue via Skype or live messenger. Good for home and
mobile sales force staff to access customer facing systems.
Benefit: Permits Sales managers to oversee advisory or sales sessions during quote/apply processes
Coastal Federal Credit Union has implemented video banking services and created a differential factor for its
customers. This also helps the bank to focus on sales operations by providing increased hours of service at more
locations. Through implementation of video service, CFCU has reduced the teller cost by 40% and increased the
branch service hours by 87%.Their video tellers are open from 7 am to 7 pm, 7 days a week.
Social media innovation
Usage: Ideal to support a ‘virtual branch’ online to support enquiries regarding advice on mortgages, foreign
exchange, setting up payments etc.
Benefit: Helps in providing personalized services to the customer and enhancing customer relationship.
Citizens Financial Group launched video banking pilot in four states wherein it collaborated with Cisco
(TelePresence and collaboration technology) and LongPen (Signature solution) which enables it to provide its
Customers with on demand advice in the branch locations. CFG pilot provides the participating customers with on
demand live interaction with the bank representatives in various locations.
Personal Teller Machines (PTM) used for video banking
The PTM operates in a similar manner to ATMs; PTM’s let the consumers contact an agent through a video screen which
reduces the use of agents in the bank branches. To initiate a transaction the customer has to touch the screen of the PTM
which will then connect them to the agent or teller who is placed remotely to service the customer’s transactions. This is
where the teller actually handles the transaction even beyond the regular banking hours. The only difference between
ATM and PTM is that; at PTM a customer can actually deal with a live teller.
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7. Video Usage: It is now common for traders to collaborate with other market participants such as analysts, risk managers,
services in economists, researchers, private wealth managers and other off-floor support teams to discuss each stage of
trading the trading process .This collaboration will increasingly contain real time video collaboration between market
systems participants.
Benefit: Video conferencing service allows customers to carry out two way interaction with the trader throughout
the transaction.
Commerzbank has been using video systems across North America, Europe, Asia and Africa to connect their
trading-floors. Video systems are used to create several peer-to-peer trading desks spread across geographies.
The Head Trader can talk to traders individually or as a group to arrive at better trading decisions.
Video Usage: It is expected that self-service applications, automated portfolio management tools, and video-enabled
services in webinars will provide mechanisms whereby banks could provide mass affluent clients with significant value
private wealth through a richer interactive experience.
management Benefit: The video conferencing service enables wealth managers to connect with the High Net Worth Individuals
(HNI’s) to enable them to take advantage of more bank resources.
In May 2010, HSBC launched instant video consultation service for customers, which enables the lender to provide
premier customers instantaneous assistance from the Customer Representatives. HSBC was the first bank in Hong
Kong to launch video conferencing service to its premier customers. LIVE Connect enables premier consumers to
conference the RM’s promptly, and look for financial advice.
As on March 2012, ANZ introduced video technology from Cisco in Australia, letting the clients in wealth
management to meet the staff remotely through the video conferencing. Following a four month trial, ANZ has
introduced its ‘Wealth Presence’ service in Sydney, Perth, Adelaide, Melbourne, Newcastle, and Brisbane. ANZ’s
video technology is based on Cisco’s TelePresence technology that comprises of high quality video, 3D audio,
meeting rooms with good technology and several other interactive components to create a real time virtual
meeting capability.
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8. Conclusion:
Video Banking is being introduced to bring the customer in contact with a real life person i.e. moving back from virtualization to human touch.
Banks can’t ignore video technology because it helps in:
• Lowering operating costs and long term infrastructure costs which will help in containing the cost-income ratio
• Video technology is scalable, maintainable and accessible to customers as well as banks.
• Ensuring better servicing of customer expectations through alternative and innovative channels
• Enabling consumers better access to more services and locations through PTMs compared to traditional ATM facilities
• Equipping branches to be more personal, full-service locations
• Providing better compliance monitoring of trading activities and regulated advisory services
Financial Institutions need to embrace video technology and make it an integral part of their multi-channel strategy to offer enhanced services
to customers and employees alike. With the all-encompassing nature of video technology, financial institutions cannot afford to lose out on
implementing video technology whether it is to turn obsolete bank branches into lively sales channels, to improve collaboration between
traders or to deliver high quality advice to wealth management clients.
Abhinav Kishore Jaipuriar is a Senior Associate Consultant with the Financial Services and Insurance Vertical in Infosys.
Author Profiles
He has 5 years of experience in Banking and finance, pre-sales, Supply Chain Management and product development. His
areas of expertise include banking, capital markets and risk and compliance. He has worked on developing business cases
and building strategic solutions for banking, capital market and supply chain management clients.
He can be reached at Abhinav_Jaipuriar@infosys.com
Naga Madhavi Chintalapudi is a Consultant with the Research Center within the Financial Services and Insurance vertical
in Infosys.
She has overall 7 years of experience, with her work revolving around researching various companies, industry/market
analysis, vendor/peer analysis focused on FSI and overall IT. She has worked for a leading UK based telecom player prior to
working with FSI Research Center for conducting Market Analysis for various Telecom products and Company Research for
various Companies in UK markets.
She can be reached at nagamadhavi_c@infosys.com
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© 2012 Infosys Limited, Bangalore, India. Infosys believes the information in this publication is accurate as of its publication date; suchinformation is subject to change without notice. Infosys acknowledges
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