My thoughts on using video through the ATM channel have been validated by some of the largest banks in the US and now the question becomes whether video is still a viable technology for community banks and credit unions or not. I have not been a fan of video ATMs because I believe it leads to lengthened transaction times with minimal value add, especially at branch locations. Why is this technology failing to gain further traction and is there a better way to solve that problem?
The Original Challenge
Many FIs saw video ATMs as a way to reduce operational expense and extend hours for customers to be able to interact with a "live" person. It’s difficult to find the ROI on a small scale and only becomes slightly better at full scale based on infrastructure needs. One of the goals of video ATMs was to improve customer experience, however that experience isn't great when you don't have the bandwidth to deliver high quality video. You have now replaced a live person at the location who was visible from the car window, with a remote live person in less than standard definition TV who is required to run the ATM and make it dispense money or handle your deposit.
Most customers I know, including myself, are looking for terminal velocity to get my banking done. If I need cash, which still doesn't dispense from my iPhone, I go to the ATM and can normally complete my transaction in a matter of less than 60 seconds. Now with video ATMs the transaction can be 3-5 times longer and I am required to talk to a person when all I need is $60 out of the ATM. Furthermore, the notion that cross selling would happen at the ATM is almost ludicrous if you are trying to pitch that as part of the ROI of video. Personally, I am not looking for a pitch on a great credit card rate or to have someone ask me about a Home Equity Line through video on the ATM. In my opinion, if big Tier 1 banks can't make the solution work effectively at their scale, how are you as the community bank or CU going to profit from that channel?
Where could video be most effective?
I still believe that the sales channel of the institution is the most cost effective and easiest way to gain scale for the bank or CU. Using a nice videoconference room setup with a HUGE HDTV to conduct the initial qualification seems way more effective to me than an ATM. No customer wants to hear that the wealth guy is only in my local office on Mondays and Thursdays and we should come back then (not going to happen). If we are setting up our branch environment the right way and our staff is engaging our clients, we should be able to uncover customer needs and have an initial conversation in the video room RIGHT THEN! Now some further information could be uncovered like assets, investing goals, etc. with setting a formal appointment with the expert at the bank or CU. This allows those "revenue producing" employees to be centrally located, manage a wider area for scale and be more productive from their seats running 10-12 meetings per day instead of trying to catch 2-3 at a location if they get lucky.
I also think that the institutions that can be first to provide video through their mobile and tablet banking app will have a huge advantage to leverage. With more things in this world being about convenience with even healthcare moving to at least a partial virtual model for doctor consultations, I think this could be a powerful tool for financial services. Instead of the bandwidth having to be at the branch level, you can centralize a lot of that video talent in a high speed internet building and then use the customer’s WIFI to deliver high quality video through Skype or FaceTime type video chat in the application.
Now don't get me wrong, video is powerful in a lot of business applications today, but I think the novelty of it through the ATM is beginning to wear off as the costs keep adding up beyond hardware and software expenses. I think a good video program for revenue generating employees like loan officers, wealth management and even personal bankers could be leveraged to deliver higher ROI and a better, more attentive experience for the customer. That should be the end game, in my opinion, a better customer experience and reduced operational expense, neither of which I am seeing come to fruition at the majority of video ATM installs.