Pandemic pushes customers to give video banking a go

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Video banking has gone from novelty to near necessity in the age of social distancing, and financial institutions are stepping up their mobile and ATM offerings as well as adding on-screen agents.

The video banking provider POPi/o, whose platform allows banks to connect with their customers on a screen set up in a branch or via their computers or smartphones, says its businsess has surged. Calls between an institution and a customer that result in a transaction or service have more than tripled since the coronavirus pandemic started, to about 25,000 per month. The company expects to hit 100,000 calls in June.

NCR, a producer of what it calls interactive teller machines, said that it has observed an increase in use of its devices as well. For example, clients are looking to add to their stable of video teller machines or turning on the video capabilities rather than operating the machine as a regular ATM.

Pioneer Federal Credit Union, based in Mountain Home, Idaho, uses the POPi/o platform for more complex member service queries and NCR’s video-assisted ATMs for withdrawals and deposits in the drive-through. The $500 million-asset financial institution has seen heightened activity on both.

Over POPi/o, video calls to Pioneer have jumped from an average of 30 a day to 130 a day. Meanwhile, transaction volume on the credit union’s video-enabled ATMs rose to 17,000 transactions in March from previous monthly levels of around 11,000 transactions.

Video-equipped ATMs at Pioneer Federal Credit Union
Pioneer FCU members use a video teller machine (before social distancing rules kicked in). Transaction volume on the machines has almost doubled.

Pioneer is only purchasing video teller machines these days, rather than standard ATMs. Tracey Miller, senior vice president of operations, said both video platforms enable the institution to reach more customers and extend its hours, with fewer employees needed on-site.

Although summoning a customer service agent over video on an in-branch monitor, through an ATM screen or on a personal device is not the same as interacting with a bank employee in person, financial institutions that use video technology say it can come close. And as the coronavirus pandemic forces branches to close their lobbies or limit their hours, video banking is providing a flexible alternative for banks that want to offer a full complement of services — from servicing accounts to facilitating loans — without losing the personal touch.

The POPi/o platform, for example, enables financial institutions to replicate many tasks they would normally do in person, short of dispensing cash and coins, according to the company.

Say customers want to apply for a loan through POPi/o’s smartphone app: They can examine the application with their video agent through a shared screen, snap photos of relevant documents with their phone’s camera, and sign the completed application onscreen with their finger. If they have a question they do not want passersby to overhear, they can shoot it over in the app’s messaging system.

Union Bank in Lake Odessa, Mich., rolled out video services through POPi/o in January to smooth out the process of opening accounts and to hold on to young clients who were heading off to college.

More recently, the $200 million-asset bank has found value in facilitating loans over the platform.

“The nice thing about video banking is there are workflows,” said Stephanie Brummette, who manages the virtual branch team at Union Bank. “I can see what the customer sees and tell them ‘You’re at the step where you need to sign’ or ‘You’re at the step where you need to accept electronic consent.’”

It is also convenient for the bank’s customers.

“We have people that call in to do wire transfers when they are still in bed,” Brummette said.

The video teller machines created by NCR allow bank customers to speak with a live teller for help withdrawing or depositing cash, depositing checks, ordering new checks and making account inquiries. NCR currently supplies its machines to more than 500 customers.

Video is proving to be a valuable medium for other initiatives as well. Royal Bank of Canada launched its MyAdvisor service in Canada in 2017, which lets retail customers connect with financial advisers over the phone, over video or in person. Before the pandemic, the video option had the least traction, but it became far more popular as opportunities for in-person meetings receded.

“I think it has to do with video adoption more broadly,” said Michael Walker, head of mutual funds distribution and financial planning at RBC. “All of us are trying to use FaceTime and other applications on a personal basis to talk with friends and family.”

The popularity of video apps among all ages also means that video banking does not discriminate based on age.

“Grandma and grandpa are just as used to using Skype and Zoom and FaceTime to talk to grandchildren, as are the millennial generation trying to find a date,” said Gene Pranger, CEO and founder of POPi/o.

How banks are coping

To meet the higher demand for video calls, banks are padding their rosters of video agents, typically by reallocating the employees they already have.

Pranger said the number of POPi/o’s seat licenses, or number of agents using its system, has tripled over the past five weeks, and his company’s client count jumped from 52 clients at the beginning of March to 84 as of April 21.

At Pioneer, branch staffers are trained to run the video teller machines, and a few have hopped onto the POPi/o platform as well.

“Lucky for us, we believed that was the best way, because we gave some touch-up training and moved staff onto these platforms very quickly,” Miller said.

At Union Bank, which has six branches, the contact center fields both phone and video calls on the POPi/o platform. The staff of five grew to eight (including a lender to process Paycheck Protection Program loans) once the state issued a stay-at-home order and the bank closed its lobbies. Shuffling employees to the contact center meant the bank could avoid layoffs.

As comfortable as customers may be conversing with an agent on screen — even from their beds — agents new to video may not feel the same way. “The biggest issue we sometimes get is people are not used to being on camera and don’t feel comfortable with this type of interaction,” Pranger said. “But we find they get over that initial hurdle about a minute in.”

Video banking of the future

Now that financial institutions are leaning more on video, some are thinking about the next steps as the crisis continues, as well as after it subsides.

At Union Bank, Chief Operating Officer Sue Dahms and her team seem to have mastered the deposit side of video banking. Their next step is to improve their ability to service loans through a screen.

“We want to eventually be fully functioning on the video side,” Dahms said. “This will change how people do their banking — they already realize they don’t have to come in to a bank and can do things online or remotely.”

RBC is planning to equip more advisers with video capabilities, after finding that this medium is, in some ways, superior to the phone for financial planning conversations.

“When you’re doing this interaction face-to-face, you can see the client’s body language,” said Walker. “Video allows you to replicate that in-person experience and adds to the richness of the discussion overall.”

Extraco Banks in Temple, Tex., several years ago began deploying video teller machines from Nautilus Hyosung America that the $1.5 billion-asset bank dubs “Extrabankers." They are mostly located inside the now-closed branches.

But this experience has highlighted the value of their outdoor units, said Misti Mostiller, executive vice president and director of consumer banking and enterprise innovation at Extraco. Executives plan to set up more this year, ideally by the fourth quarter.

Extraco may explore other forms of video banking after it expands its outdoor footprint.

“One thing the pandemic has taught us is we can always work on being more agile,” Mostiller said.

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