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In-branch video banking: why and how should banks invest?

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In-branch video banking: why and how should banks invest?

By Mark Aldred, banking specialist at Auriga

To survive in today’s market, banks have to think differently. Investing in innovative technologies such as video banking – as part ofa digital transformation – is one way financial institutions are adapting.This means that in addition to the changing use of technology, the roles and contributions of bank staff will also change.

Why video banking?

Video banking is a highly cost-effective service that enables banks not only to increase operational efficiency but also to boost customer engagement, satisfaction and sales. It is available in two main forms – online via a consumer’s own mobile device over the internet and in-branch, whereby customers use an ATM, ASD or kiosk to communicate with a remote teller.

In the UK,Barclays, and more recently NatWest, have started offering online video banking services enabling consumers to access customer services from their own mobile devices, but in-branch video banking is less common. According to 2018 Kantar research on behalf ofEfma, CUNA and Vidyo, it is in-branch video banking that more respondents (90%) said they would be willing to use than online video banking. But why else should banks consider investing in in-branch video services?

Cost-effective for the bank and improved access to cash and services for the consumer

Video banking can help improve access to financial services. Falling demand for physical money has prompted banks to close branches and cash machines causing rapidly declining access to cash in the UK. This is despite the 2019 Access to Cash report, warning that 17% of the UK population (8m people) say cash is an ‘economic necessity’ to them, and the Which? research suggesting people living in rural and remote areas as well as in poorer neighbourhoods are likely to be hit hardest.

Video banking enables banks to offer financial services in rural areas in a more cost-effective way than they could by maintaining a regular bank branch, as the bank can service customers remotely via a central teller rather than hiring or retaining the number of staff required to service multiple branches in person. For example, someone in rural mainland Scotland or the Highlands and Islands can access face-to-face support setting up a bank account by remotely accessing a video teller based in Edinburgh, not only making better use of existing staff members’ time but also keeping the branch open and profitable.

This is also a benefit to customers as it means local access to financial services is protected. In fact, video banking can make for an even more convenient experience than that of a traditional bank branch. With a remote teller available via video link, banks can service customers beyond the usual opening hours and even keep branches open 24/7, seven days a week with the resultant opportunity to increase branch productivity

Improve customer experience and customer retention 

Video banking can enhance the customer experience and increase client retention. According to the same Kantar research, over half of organisations that had deployed video banking reported improved customer satisfaction(56%).This is unsurprising as in-branch and online video banking give consumers increased choice over how they bank. This is without losing any of the benefits of person to person interaction required for more complex, time-consuming activities such as securing a loan or applying for a mortgage.Furthermore, video banking means better access to assistance for consumers seeking help with self-service technology or product advice. Video banking goes hand-in-hand with technologies such as AI, chatbots and robo-advisors, however, to successfully improve the customer experience it must be part of an omnichannel strategy.

Best-in-class remote banking experience 

Both in-branch and online video banking can be combined with new technologies, such as AI, to deliver higher-value conversations at a low-cost and in half the time. Biometrics and facial recognition can also be used to identify callers accurately and faster, videos can be analysed to provide rich insights for improving the customer experience and historical data can be used to predict the best contact centre agent for which to route the call.In addition,in the same way that AI is applied to chatbots to understand a customer’s emotions, AI can be applied to video banking to understand customer sentiment and decide how to communicate with them. If the consumer looks frustrated, the AI can notify a human being to take over. If they look happy and relaxed, the bank could use this as an opportunity to offer a new service or upsell.

Video banking must be part of the omnichannel experience

However, it must be said that video banking should not be viewed as simply another channel to add to the mix – it should become part of the full omnichannel banking experience. Customers don’t view video calls as separate from the rest of the brand, so banks shouldn’t either. Therefore, organisations need to invest in a unified data- and service-sharing platform to ensure seamless transfer across all channels and technologies, including video, AI, chatbots and robo-advisors, so that information exchanged via one channel is available on all other platforms.

Top Five Recommendations For In-Branch Video Banking Implementation

  1. Undertake a cost-benefit analysis: It’s important to understand what banks want to get out of video banking and how it can be applied to maximum effect
  2. Refer to the data: Measuring against KPIs is vital to successful video banking implementation
  3. Invest for the future: Banks should consider the vendor carefully and opt for a platform over a one-off solution
  4. Think about audience: Customers of all demographics can benefit from video banking, not only Millennials or Gen Z. There’s low resistance to accessing services over video links so long as they are secure and private. Never hesitate in making video a mainstream banking option.
  5. Train your staff: Staff will need to be taught how to fix technical issues, deliver support via video link and show customers how to use video banking. They also need to be equipped with broader knowledge and expertise of services and products

Video banking enables banks to effectively bridge the gap between brick and mortar branches and purely digital services like mobile and online banking. Investing now can help banks improve profitability, customer loyalty and grow sales, but in order to fully reap the benefits, it must be seamlessly integrated.

Banking

SoftBank telco unit rotates CEO, Son steps down as chairman

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SoftBank telco unit rotates CEO, Son steps down as chairman 1

By Sam Nussey

TOKYO (Reuters) – SoftBank Corp, Japan’s third-largest telco, said on Tuesday Chief Technology Officer Junichi Miyakawa would become its chief executive officer, effective April 1.

The change at the top of one of SoftBank Group Corp’s largest assets comes after two years of deliberation, with the telco emphasising the need to “pass on the strengths of its current management system to future generations.”

The rotation is likely to lead to speculation over SoftBank Group CEO Masayoshi Son’s own succession plans. The 63-year-old billionaire abandoned a previous plan to hand over the reins and went on to launch the $100 billion Vision Fund.

The son of a Buddhist priest, 55-year-old Miyakawa is a technical whizz driving projects including the wireless carrier’s 5G build-out. He replaces 71-year-old Ken Miyauchi, a key lieutenant of Son, who took up the post in 2015.

Miyauchi will take the post of board chairman from founder Son, who will remain on the board. A household name in Japan, Son joins business leaders such as former Apple CEO Steve Jobs in being the face of the company he runs.

During Miyauchi’s tenure, the telco had a bumper IPO in December 2018 to feed cash to SoftBank Group as it shifted its focus to investing in tech companies. Son has since further reduced the group’s stake after a series of high-profile stumbles.

Miyakawa takes the helm as the industry faces unprecedented political pressure to cut fees, potentially eating into fat margins in its core business.

Looking to grow sales beyond selling mobile and broadband subscriptions, SoftBank is integrating a hodgepodge of companies including online fashion retailer Zozo and message app operator Line Corp into internet business Z Holdings.

Known for blue sky thinking including flirting with the idea of making cars, Miyakawa’s pet projects include an attempt to deliver broadband via drones. Alphabet Inc said last week it was abandoning its own balloon-based attempt.

(Reporting by Sam Nussey; Editing by Tom Hogue, Shri Navaratnam and Subhranshu Sahu)

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Banking

Over 60’s turning to digital banking up by 90% during pandemic

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Over 60’s turning to digital banking up by 90% during pandemic 2

More than 90% of people aged over 60 have used online banking for the first time during the Covid-19 pandemic, according to a poll by iResearch Services, highlighting the importance of banks getting digital right in 2021.

In comparison, 17% of people aged under 30 said they were accessing services via an app or web browser for the first time.

The findings show how banks must adapt to help service the influx of new digital users and gain their trust, accelerated by the Coronavirus pandemic. With 97% of 18–24-year-olds trusting their bank with their data, compared to only 33% of people aged over 66.

Commenting on the findings, Gurpreet Purewal, Associate Vice President, Thought Leadership, at iResearch, said: “Our study demonstrates the lasting impact of Coronavirus on how people will access banking services from now on. Banks will be required to refocus on really understanding customer needs in order to engage with the different requirements of each individual customer.

“More than half (54%) of respondents said they are less likely to attend a physical branch after the pandemic. This demonstrates a seismic shift in the way people will access banking services now and into the future.”

In other findings, 63% of respondents said their bank acted in their best interests during the pandemic, but a third said they would consider switching their bank for better, more personalised communication.

Purewal added: “On the whole, High Street banks have emerged with great credit from the pandemic for the way they have supported their customers. As the economy rebuilds, it will be more important than ever that they communicate in the right way to help consumers through 2021 by leveraging digital platforms and understanding their needs fully.”

Asked how banks can improve their communication with customers, ‘connecting on a personal level’ ranked highest, followed by ‘more honest and open dialogue’, a ‘demonstration of how they are helping customers’, ‘more creative campaigns’, ‘consistent messaging across channels’ and finally ‘responsiveness to major events’.

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Banking

Banking on the cloud to create a crucial advantage in financial services

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Banking on the cloud to create a crucial advantage in financial services 3

By Rahul Singh, President of Financial Services, HCL Technologies

Once considered a revolutionary technology, cloud is now at the heart of agile and innovative businesses. The financial services industry is no exception, and has been a major adopter of cloud-based Software-as-a-Service (SaaS) for its non-core applications. Functions such as customer management, human capital management, and financial accounting have progressively shifted to the cloud. Several banks have also warmed up to using cloud for services such as Know your Customer (KYC) verification. IDC analysts say that public cloud spending will grow from $229 billion in 2019 to almost $500 billion by 2023, and a third of this will be spent across three industries: professional services, discrete manufacturing, and banking. The time is ripe for an increasing number of financial services providers to consider moving more of their core services to cloud.

Adoption is already on the rise

Earlier reluctance to move core activities to the cloud has softened, and many banks have put strategies in place to migrate services, including consumer payments, credit scoring, wealth management, and risk analysis. This significant change is driven by factors such as PSD2 and open banking, which require secure and cost-effective data sharing.

Regulators too were once cautious in their approach to cloud technology, but this is also changing. The Australian Prudential Regulation Authority (APRA), for example, whilst acknowledging the risks associated with cloud, also recognised the risk of sticking to the status quo. ARPA trusted the enhanced security offered by the cloud, and updated its cloud-associated risk advice. Wisely, APRA recommended that banks must develop contingency plans that allow cloud services to be provided through alternate means if required.

Rising pressure from new challengers

The other pressure for incumbent banks is from next generation fintech firms. These are cloud-native organisations, and are able to onboard customers remotely in minutes, roll out new services in days, and meet compliance requirements at lower costs.

As a result, the need for traditional banks to upgrade core systems and integrate the latest technologies is stronger than ever. The COVID-19 pandemic has been an additional driver, highlighting the importance of upgrading and migrating core systems to the cloud. Financial services organisations have been forced to rethink their approach to digital transformation, and pay special attention to a cloud-aligned culture. The industry is recognising how the cloud can address new and ongoing regulatory changes, meet different demands from customers, support the roll-out of emerging technologies, and enable incumbent providers to respond to the relentless competition from fintech firms.

New year, new priorities

As we enter 2021, financial services providers will need to reset their priorities, and go beyond using the cloud for scalability and cost efficiency alone. The new areas to focus on will include:

  • Creating a robust digital foundation: The cloud market is expanding fast, and there is an ever-increasing number of services on offer. Whilst the big three hyper-scalers are the obvious choice, various other players are also gaining traction, such as IBM, Oracle, and Alibaba Cloud. Organisations will need a robust digital foundation to adopt cloud at scale in a secure and compliant way. A well-architected digital foundation, supported by resilient operations, ensures that organisations have continued access to their systems and data, regardless of where employees are located, or what device they are using.
  • Adoption of technology platforms: Enterprises are finding ways to reduce complexity by embracing a platform approach, and increasing the speed of business IT consumption. Physical infrastructure is being abstracted into cloud-based platforms, with data consolidated into data lake platforms. Software products like Apigee are being offered as capability platforms to drive better analytics and intelligence.
  • Enhancing IT security: Cloud offers organisations greater security than on-premises servers, if implemented correctly. Financial services organisations have relied on control and compliance-based security for years, but these practices are increasingly vulnerable to cyber threats. Whilst service integrators create robust cybersecurity solutions for financial services organisations, cloud providers are also looking to provision industry-specific security and regulatory measures like end-to-end data encryption – making it easier for financial services organisations to be compliant whilst migrating to cloud.
  • Driving innovation: Cloud is the fundamental factor behind the ability of fintechs to innovate rapidly. Using cloud, financial services can leverage new technologies and tools like augmented reality (AR), virtual reality (VR), natural language processing (NLP), machine learning (ML) and the Internet of Things (IoT) to unlock new processes that improve customer interaction and experience with portable real-time services. Whilst fintechs have led the way in cloud-based innovation through open banking platforms, some of the leading banks are also adopting cloud to simplify their business processes, including KYC as a Service, to enhance customer experience.
  • Enterprise synchronisation: Effective collaboration, both internally and with external partners, is crucial to success in the ever-expanding financial services ecosystem. Cloud allows businesses to integrate collaboration through shared tools and platforms. This is a critical ability as it leads to faster decisions and improved innovation cycles.

Legacy systems hold banks back from improving revenue generation and restrict their ability to build a responsive and resilient business. Cloud is a key factor in the success of challengers: traditional banks have no time to waste in migrating their core systems to cloud and building a secure future.

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