Citi tests long-term viability of video banking

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Zoom and the like have stood in for countless in-person meetings during the pandemic, but videoconferencing's appeal may not run deep with bank customers.

Only 10% of consumers plan to contact their banks by video after the health crisis subsides, compared with 38% who would prefer to call the regular customer service line and 28% who would favor a return to face-to-face encounters, according to a survey conducted in June by the research firm Javelin.

Yet Citigroup and other financial services companies would be reluctant to ditch a technology that balances efficiency and personal service as well as video chat does. For that reason, Citi is conducting a pilot project to better determine exactly how much screen time customers will tolerate in the long run.

At the end of 2019, Citi emailed customers about the availability of video banking services at one branch in Manhattan after customer feedback revealed that customers want to use digital platforms but appreciate the human touch. The results were promising, so Citi accelerated plans to expand that trial as lockdowns set in and social distancing measures saw video permeate school, work, medical appointments and socializing.

“We thought video might be an interesting and convenient way in which we could remotely connect with our customers but still maintain the important relationship-building element they have with their banker,” said Mindy Mercaldo, head of Citi’s U.S. retail banking branch network.

This mode of communication is easier to make available outside of traditional branch hours and accommodates those who have relocated from their primary homes during the pandemic. It also carries some of the same benefits of a face-to-face interaction. If successful, Citi’s experiment could help indicate whether there is long-lasting viability to simulating the branch environment in a virtual realm.

Some financial institutions offer remote servicing through interactive teller machines and other video platforms. But in general, “video banking barely exists,” said Emmett Higdon, director of digital banking at Javelin Strategy & Research in Pleasanton, Calif. “It’s a novelty.”

On Oct. 1, Citi launched its pilot involving 200 personal bankers, relationship managers and branch managers in 50 branches across the country. The service is not formally marketed; instead, bankers typically reach out to customers and offer Zoom as one way to meet.

One draw is that customers can replicate a fair number of branch tasks over Zoom: opening new accounts, getting advice, learning about digital capabilities, applying for loans. Where needed, employees will email customers a link through the electronic signature company DocuSign to get a signature. Bankers typically log on from their offices using an iPad and may introduce the branch manager during the call.

The main limitation of video is the inability to handle cash. At this point, Citi is also not taking mortgage applications and handling investments over video.

Citi chose Zoom as its platform because its employees were already comfortable using it internally. Pilot participants still underwent training, including with 10 role-play scenarios. Eventually, the company may roll out a more sophisticated audio, chat and video experience, similar to what it offers customers in parts of Asia.

“Those integrated tools are on our road map, but we felt like we wanted to go ahead and use Zoom because it was our platform and we could bring it to market right away,” Mercaldo said.

To strengthen security, Citi worked with Zoom to implement several features, including two-factor authentication and unique passcodes for each meeting so that customers can’t reuse their credentials to sneak into another meeting.

Mercaldo is pleased with the feedback that Citi has received so far.

“The customers say things like ‘I think it’s really cool, I love seeing my banker face to face, I feel like I was in the branch, this was very convenient for me,’” said Mercaldo. Employees helped coach first-time Zoom users through the platform.

The bankers like it, too, especially the opportunity to be more prepared for meetings.

“We’ve met babies, we’ve met pets, we’ve met significant others,” said Mercaldo. In one case, a banker helped a mother open a savings account from home while meeting her newborn.

Higdon thinks that video banking is best used for high-value interactions, such as opening a new account, or for delicate issues, such as estate-planning matters, rather than routine questions. He points out that video is a real-time, on-demand digital communication channel that can address personalized customer needs without forcing them to wait on hold (or in person), deepen relationships and escalate customer concerns efficiently.

His research also shows that consumers are largely comfortable with video interactions in a general sense, with 84% using video before or during the pandemic.

“I think the ball is in the banks’ courts right now,” he said.

The results for Citi have been encouraging. At the end of October, Mercaldo and her team decided to extend the pilot. The next stage will focus on customer adoption in Manhattan, a market that normally sees a steady stream of commuters who are now working from home.

The hope is that popularity among customers will spread.

“We think video banking allows us to expand our reach into markets where we don’t have a traditional footprint and help us grow,” said Mercaldo.

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