Back to the Future-With Highly Visible Branch Banking: Videoconferencing Technology Has Been One of the Key Technologies Underpinning the Current Shift Back to Retail Branch Banking
Luff, David, Journal of Banking and Financial Services
When the perceived value of the retail branch network was widely disputed in the 1990s, branch banking went into full retreat. The Australian Prudential Regulation Authority (APRA) revealed that one-third of all available bank branches closed their doors in Australia between 1993 and 2001. Since 2002, however, this trend has been reversed--with more branches being opened than closed--as banks have had a change of heart.
Visual communication, or videoconferencing technology has been one of the key technologies underpinning this transformation. This technology is now emerging from the back office, or conference room, into a 'real time' application in front of a customer.
There has been growing re-acceptance within the industry that bank branch networks are an important delivery channel for the services needed by many customers, and therefore play a key role in increasing the share of assets under management. In announcing strong first-half results, both the ANZ Bank and St George Bank, for example, re-confirmed that they have been investing in 'branches and people' with more bank branches planned this year.
The new branch service model
Forrester Research has identified a 'new branch service model' whereby the branch acts as a proactive relationship centre in which staff spend 80 per cent of their time selling, advising or facilitating access to experts.
This is made possible and supported by technology that is open, integrated and meets web standards. Business decision makers and bank technologists are realising they already have the network and infrastructure in place.
The addition of 'visual presence' is emerging as the next strategic technology, and a key competitive weapon, as it becomes a natural extension within four of the five key delivery channels--the branch, advisory team, call centre or self-service (ATM or kiosk). It allows retail banks to provide added horsepower and to leverage their key experts and talent, no matter where they are based, in order to facilitate deeper customer interactions with more clarity, precision and speed.
A 2005 white paper entitled Transforming Branch Banking: Real Time Advice in the 21st Century was recently issued by IDC's independent research services arm, Financial Insights. It suggested that retail banks understand that the branch delivery channel is the real key to relationship building, thus creating greater opportunities for delivering higher quality, more complex/higher margin services.
Videoconferencing--critical in generating customer activity
Many of the world's major banks are realising that videoconferencing technology, underpinned by the increased availability of high quality IP networks and technology, can generate significant customer activity.
Financial Insights research showed that initially many banks used video technology to improve employee productivity, reduce travel time to meetings, replacing onsite face-to-face internal meetings with videoconference face-to-face meetings. In doing this, they achieved a positive return on investment within short time periods.
Operating at the peak of its potential, however, video technology is being used to deliver real-time, personal and expert advice to customers--linking in remote expert advisers no matter where they are located geographically.
The effect of using video over the IP network allows a financial institution to provide 'real time advisers' to a wide range of potentially high-value or profitable customers, offering them the most knowledgeable and personable service.
Financial Insights suggests the effect of using video over the IP network to achieve this level of interaction should be a goal for every customer-focused retail bank. …