Banks are turning to video-conferencing technology to improve service and internal communication.
Though systems to deliver real-time video streams have been available for years, quality issues and pricing kept it on the list of technologies not quite ready for real-world projects. But better equipment and the growing availability of broadband Internet services have prompted a handful of banks to set up video-conferencing systems.
Most of the initial uses are for meetings of employees in disparate sites, but at least one company has a video remote-teller system, and executives predict that video conferencing will soon be more widely used to communicate with customers.
Sovereign Bancorp Inc. of Philadelphia installed two video-teller stations at its Harvard Square branch in Cambridge, Mass., in August. The two-way screens in the branch’s automated teller machine vestibule enable customers to do transactions with live tellers in the basement, using pneumatic tubes to deliver cash, deposit slips, and other documents.
Patricia A. Rose, Sovereign’s president for community banking in Massachusetts, said that the 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. Harvard Square is a busy pedestrian area and not a good site for a drive-through teller, she said.
“It allows us to provide longer banking hours without keeping the whole branch open,” she said.
Video also means improved service, Ms. Rose said. “You can do a lot at an ATM, but you can do more with a video teller.”
But for the most part, customer-facing uses of video conferencing remain rare. The Internet equipment maker Cisco Systems Inc. of San Jose has demonstrated such applications at trade shows, but James Bright, its financial services industry marketing manager, said most banks are not yet ready.
Cisco believes video conferencing will be “the next technology wave” as banks redesign their communications systems to use Internet protocols, Mr. Bright said. Many banking companies already use IP telephone systems, and “they always adopt IP telephony first,” he said, before moving to more advanced communication systems such as video.
To be sure, some big banking companies have used video conferencing for years for executive presentations, training, and team meetings. Bank of America Corp., for instance, has 400 video-conferencing systems. Shirley Norton, a spokeswoman for the Charlotte company, said that the investment banking unit, for example, holds a video-conference strategy session every morning.
National City Corp. has 22 video-equipped locations, which have been in use about 10 years. Terri Wilson, a spokeswoman for the Cleveland banking company, said it saves $200,000 a month in travel expense by holding team meetings over the video systems rather than in person.
But these examples only underscore how limited the use of video is thus far at big banking companies; B of A has 5,800 branches and Nat City has 1,300.
In contrast, a few pioneering community banks and start-ups have been much more aggressive about installing video systems.
Vineyard National Bancorp of Rancho Cucamonga, Calif., has Internet video equipment at all of its eleven full-service branches and three loan production offices.
Robert E. Dieter, a senior vice president and the chief information officer at Vineyard, said the $1.7 billion-asset banking company has used conference room systems from Tandberg, a Norwegian video vendor, since 2004.
Loan committee meetings, employee orientation sessions, executive conferences, and training programs take place via video.
The system uses Internet protocol, allowing participants to share PowerPoint presentations. Like the “Hollywood Squares” game show, Mr. Dieter said, the system can show everyone on a multipoint call at the same time.
Vineyard is also installing desktop systems in the offices and homes of several directors, Mr. Dieter said. “If he doesn’t want to come to Corona,” where many of Vineyard’s executives work, “he can sit in his office and participate.”
Besides saving on travel costs, Mr. Dieter said, video keeps people on their toes. “It keeps people focused on what they’re there to talk about. You can’t do other things, because they will see you.”
Vineyard is still limiting video to internal use, but Mr. Dieter said he envisions customer-facing applications. “Subject matter experts in the branch — that’s the way I see us going.”
In contrast, MagnetBank, a start-up industrial loan company, is already using video systems with customers. The Salt Lake City company opened in September, and many of its bankers are based in the Southeast.
MagnetBank uses video-conferencing systems to connect its loan officers in the field, in markets such as Atlanta, Orlando, and Raleigh, with the loan committee in Salt Lake City. (The Utah ILC requires that loan decisions be made in-state.) Customers sometimes join the video conferences as well.
“We are geographically dispersed in a way that management of the platform becomes problematic from a travel standpoint and a communications standpoint,” said Christopher Worel, MagnetBank’s president and chief operating officer.
“E-mail is a great communications technology, but it’s flat. You don’t have the illumination,” he said. “If 80% of communication is nonverbal, then we would be missing a lot” without video.
Bill Bradway, the group vice president of retail financial services at the research firm Financial Insights Inc. of Framingham, Mass., said banks would eventually view video conferencing as a competitive necessity.
“Does it make sense to put your high-value staff member in a car for an hour to go to the branch for a 15-minute meeting?” he asked. “Banks have to keep pushing that envelope to improve their operational efficiency and to find ways to improve the customer experience.”
