Putting a fresh face on an old vision, one of the pioneers of banking by kiosk is promoting a new place for video-conferencing: the privacy of the home.
Richard J. D'Agostino hopes his current venture, Videogate Technologies Inc. of Charlotte, N.C., can meld the appeal of self-service remote banking with the benefits of a face-to-face sales pitch.
Videogate's Web site will offer free software and a listing of businesses ready to receive video calls.
Immodestly comparing his idea to the Yahoo search engine, Mr. D'Agostino said he has the key to making "video on demand" live up to its long-ago- dashed expectations.
Among the obstacles have been the difficulty of handling data, voice, and video information through conventional call centers, the absence of video directories, insufficient telecommunications bandwidth, and high costs.
"We are not developing for yesterday's market, we are developing for now and tomorrow," Mr. D'Agostino said, conceding that in at least one key area, high-speed telecommunication, his technology may be ahead of its time.
But even that should change significantly in the near future. After a series of false starts, cable television operators, including Tele- Communications Inc., have begun offering access to the Internet via cable modems. They handle data at rates ranging from 2 to 40 megabits per second, or 36 to 700 times faster than the 56-kilobits-per-second computer modems that are the highest-speed on the market today for telephone lines.
The race for more bandwidth accelerated in January when leading personal computer technology companies announced an agreement with regional Bell telephone companies to increase the capacity of telephone lines.
Under the generic name of digital subscriber line (DSL), this embryonic system is expected to transmit data at rates ranging from 1.5 to 9 megabits per second, or 27 to 162 times faster than 56-kilobit modems.
Although slower than cable, the DSL specification is being hammered out by Microsoft Corp., Intel Corp., and Compaq Computer Corp. These PC modems are expected to be easier to install and cost less than cable modems.
The faster rates of data transmission should bring television-quality video to computer screens at the same time that financial and consumer- technology industry observers are heralding a convergence of PCs with TVs. Developing a technological infrastructure for rich video communication between consumers and businesses is the next logical step, Mr. D'Agostino contended.
Videogate intends to offer free access to its software and Web site when it comes on the market in July, and to charge businesses between $1,000 and $4,000 a month for a listing and a video-enabled link from its Web site. Competitive professional-quality video conferencing systems cost up to $40,000.
Videogate is touted as a dramatic new approach to electronic commerce, but detractors express doubt that a market exists for it. They point to numerous disappointments in video kiosk developments-including Mr. D'Agostino's former company, Personal Financial Assistant Inc., which was bought and then closed down by New York Life Insurance Co. The message may have been that high-tech and high-touch do not mix.
David D. Strunk, vice president of NationsBank Corp.'s strategic technology group, describes Videogate as a "compelling" product that "meets a real consumer need."
"It opens up a whole new realm that has not existed before," he said. "It offers high-quality graphics and text from the Web with a live agent that can guide a person through" a complicated transaction.
Unlike conventional call centers that preserve computer data and telephone lines in separate telecommunication links, Videogate's system converts video, audio, and other data into digital packets that travel across the Internet to call centers.
By placing experts in mortgages, insurance, mutual funds, and other products in a central location accessible by video link, financial institutions could be on call to address highly complex and specialized consumer needs around the clock.
"The ability to near-instantly connect to an expert and potentially close the deal on the spot is a compelling vision," said Mr. Strunk. "As a consumer, you are probably as hot for the deal as you are going to get."
Three financial institutions, one insurer, and an automobile company are currently negotiating with Videogate, as is banking software vendor Broadway & Seymour Inc.
NationsBank is not among this group, Mr. Strunk said, but the bank has used Personal Financial Assistant's kiosk technology.
Although having a customer service representative on hand is probably not necessary for routine transactions, Videogate's system enables businesses to combine information from their Web sites with any consumer software they are running on their computers.
For example, a tax preparer with H&R Block could talk over the phone to a customer while demonstrating, remotely, how its Tax Cut software works.
"This allow more sophisticated forms of human interaction to occur electronically," said Tony Plath, director of the University of North Carolina's Center for Banking Studies and a member of Videogate's board of directors.
"You don't need to leave home to buy a mortgage or solicit investment advice, and you have the choice about whether to turn the camera on or off," he said.
Consumers don't even need a camera unless they want to be seen by the person they are talking with. That kind of visual intimacy may provide the support that time-stressed consumers need when wavering over a financial decision.
Mr. Plath said the technology is most useful "when you need some kind of emotional reassurance that you are doing the right thing," which can come from eye contact with a sales representative.
Other observers are concerned that these ideas will collapse under the bandwidth requirements that can tax the telecommunications and Internet infrastructures.
"When you pick up the telephone, it is only on Christmas and Mother's Day that you find 'all circuits busy,'" said Kevin T. Flanagan, company spokesman for PictureTel, an Andover, Mass., company that makes video conferencing systems using private phone lines.
"With the Internet, just logging on at lunch time is sluggish," Mr. Flanagan said. "It isn't capable of business-caliber video conferencing."
"It is going to be a long time before consumers have the equipment to have two-way video streaming into the home," said Robert Davis, managing director in the competitive strategy practice of Dove Associates Inc., Boston.
At a time when many banks view home banking as a way to "drive down transaction costs, it seems like this would drive them back up again," Mr. Davis said.
"It is only going to make sense for a small segment of customers who are willing to bank from home," said Edward L. Neumann, director in Dove Associates' Washington office, who has extensively researched the interactive banking market.
Even if 10% of bank customers are conducting some form of home transactions by 2000-at least double the current level-Mr. Neumann estimated that few of those would be receptive to the service.
Mr. D'Agostino said he would be more than happy with a single-digit- percentage market.
He said he learned while developing video kiosks that banks generally never knew whether the person who walked up to them was a millionaire or a homeless person.
"All people who use this and who call banks have a common bond," he said. "They have money."
