Though caught up in the trend toward remote delivery, some banks are reemphasizing face-to-face contact with customers, albeit in a high-tech way.

As the costs of full-motion video technology fall, an increasing number of financial institutions are offering customers access to bank representatives through screens on automated teller machines and other devices.

Videoconferencing is still in its infancy in retail banking. According to companies that track bank purchases of automated delivery devices, only a few thousand ATMs or information kiosks use it, usually for sales or customer service applications.

But as feedback comes in from early adopters, others may be encouraged to try the technology.

Flagstar Bank of Bloomfield, Mich., has deployed it in all 41 of its branches.

Using PCs equipped with video technology from Intel Corp., the bank has been able to centralize its loan underwriting without compromising customers' ability to speak face-to-face with employees.

"There is a need for human interaction," said William Robinson, senior vice president of $2 billion-asset Flagstar. "The video adds the personal touch."

Begun more than two years ago, the service runs on ISDN, telecommunications lines that can accommodate both data and images. The terminals now generate about one-third of Flagstar's $6.2 billion in consumer loans, Mr. Robinson said.

The system, configured similar to one Mellon Bank Corp. is rolling out across its branch network, cost several million dollars to install.

The video images at Flagstar, like those at many other institutions, are not television-quality. On-screen gestures and movements by bank representatives appear somewhat disjointed.

However, bankers said, the cost of delivering higher-quality images is dropping all the time, and even the current mode of contact makes it easier for loan representatives to obtain sometimes sensitive information about applicants' salaries or job status.

Phil Kasper, assistant vice president for self-service branch solutions at NCR Corp., said the video images delivered by his company's terminals fall somewhere between television-quality and the lower resolution of the Internet.

NCR terminals transmit 12 to 15 frames per second, compared with the Web's 5 per second and television's 30 per second.

Huntington Bancshares of Columbus, Ohio, and Washington Mutual Inc. of Seattle, among others, have set up virtual branches with NCR's video kiosks.

The $96 billion-asset Washington Mutual has three video branches inside retail stores.

The nation's biggest thrift, which also operates 100 staffed in-store branches, began using the video kiosks in 1996 because of limited space in certain stores, said Ed Reger, vice president for alternative delivery systems sales and implementation.

Washington Mutual opens the same average number of accounts-40 a month- through video branches as through staffed branches. The staffed offices cost 75% more to operate and are 20% more expensive to build, Mr. Reger said.

Huntington, which opened its first unstaffed, video-equipped branch in 1994, has 18 video terminal locations in Ohio. Users sit in a glass- enclosed, soundproof area equipped with a touch-sensitive screen. People can communicate via a speaker-phone or handset. The kiosks, open 24 hours a day, also have printers so customers can get documents and forms.

"It's like pulling up a chair to a banker," said William Randle, executive vice president and managing director of direct access financial services at Huntington.

At Mellon Bank Corp., customers can sit down with a specialty banker using a video PC. When customers enter a video-equipped branch, a greeter directs them to a video terminal and connects them to a specialist in one of five areas: consumer banking, business banking, mortgages, personal investments, and insurance. The greeter provides any paperwork the customer might need.

Mellon has 285 video computers-one in most branches and two in a half- dozen busy locations-and plans to roll them out to all of its 429 outlets over the next year. The Pittsburgh-based bank, which uses Bell Atlantic's multimedia call center application, started using video for customer connections two years ago. With the video terminals, customers no longer need to make appointments with specialty bankers.

"We don't have the luxury of having all the experts in all store locations," said David Holzman, vice president and retail reconfiguration manager. The video terminals make specialty bankers available at customers' convenience.

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