Will the Pandemic Catapult Mobile Video Banking Into the Big Time?
April 7, 2020
This release was featured in The Financial Brand
By Bill Streeter
As recently as December 2019 fewer than one in five consumers were using online or mobile video chat with their financial institution. Now, branch restrictions have put the technology in the spotlight as a safe way to meet with a banker. Vendors are offering license deals to enable institutions to move quickly.
So far, two-way video hasn’t made it into the big leagues of retail banking delivery channels. The financial institutions that offer video banking tend to love it, however, and so do consumers that use it.
Data backs that up. A survey in December 2019 by Phoenix Synergistics found that while just 17% of consumers polled have used video chat through a website or app with their financial institution, almost nine in ten (89%) of the users found the service valuable (of these, 55% found it very valuable). Notable too is the finding that while few consumers over 50 use online/mobile video chat, a third of 18-34 year-olds do.
Two developments suggest that there is now at least a good possibility that video banking, especially on mobile devices, could at last come into its own: 1. the development of increasingly capable mobile apps that enable almost all transactions that a branch can do, and 2. the coronavirus pandemic.
Of the two, the pandemic is having the strongest near-term impact. Financial institutions that use video chat have seen a sharp rise in usage, according to Peter Wannemacher, Principal Analyst at Forrester. One bank the firm works with reported a 40% spike in video chat sessions while another reported an increase of over 50%, he states.
Idaho-based Pioneer Federal Credit Union, a long-time user of video banking, has seen an even bigger jump on a percentage basis since closing its 14 branches on March 23. “On average we typically do about 30 two-way video calls across our myPioneer Personal Assistant platform,” says Tracey Miller, SVP. “On the day we closed our branches, our video call volume increased to 134.” She says that they are also seeing an increase in downloads for their mobile video app.
The platform used by Pioneer is from POPi/o. The vendor tracks usage of its cloud-based platform and for two weeks in March, 2020, during the massive ramp-up of COVID-19 responses across the U.S., the volume of video calls jumped 30%-40%, according to CEO and founder Gene Pranger. He told The Financial Brand that for the month of March they would easily surpass 10,000 video calls, and that April’s call volume was expected to jump by 200% over March.
Further evidence comes from Vidyo, which provides a video banking platform offered through Invo Solutions. Bernard Desrosiers, National Account Executive — Financial Services for Vidyo, estimates their number of video calls in March was double the normal, pre-coronavirus level.
Vendors Roll Out License Deals
In mid March, POPi/o took the unusual step of allocating 10,000 video-seat licenses free for 60 days. (“Seat license” refers to a contact center seat.) Pranger says the company saw the trend of branches closing and realized they had “the ideal tool” to help ensure that consumers have access to their financial institutions.
Online and mobile video gives access to more than account information or even the ability to move funds and pay bills, Pranger notes. It gives people live access to lending officers and other bankers who can help them renegotiate an auto loan or mortgage payment.
Vidyo’s Desrosiers confirmed that his company is also offering a free temporary license for its cloud-based banking solution. The company currently has 20 banks and credit unions in the U.S. using its platform and expects to double that number in the next few months, according to Desrosiers.
POPi/o has 53 financial institutions using its platform of which about 80% are credit unions. Within three days of launching the seat-license offer, Pranger says three institutions had signed up. He says he anticipates signing 20-30 a week.
Pranger says that the company purposely kept the offer focused on the website (computer-based) video solution versus their mobile app because it is quicker to set up. He says it takes about a week, but Jeff Cain, Vice President of Marketing at Rio Grande Credit Union in New Mexico, says they had it working in a couple of days.
“Integrating our processes and training our people is the part that requires some attention,” Cain tells The Financial Brand. With most employees working remotely right now, training is a bit more difficult, he adds.
Why Video Is a Good Fit at This Time
The need to substantially restrict in-person contact as part of complying with social distancing requirements was a key reason why Rio Grande Credit Union decided to act on the POPi/o offer. “We saw what other states were doing in response to the virus and anticipated the situation would probably necessitate branch lobby closures,” says Cain. “Adopting this solution now versus later seemed to be a logical choice.”
Both Vidyo and POPi/o say that their platforms enable video bankers to operate either from a contact center or from their homes. Because the solutions are browser-based, the main requirement is a secure virtual private network connection to the institution’s database.
Pioneer’s Tracey Miller says her video team is not currently working from home, but they have tested that capability and it worked well. “We could relocate video employees home very quickly,” she states. “We already have VPNs set up.”
As noted earlier, modern browser-based video applications enable complex transactions to be handled on a mobile device. That includes signatures, document exchange and other functions while maintaining the video connection between the parties. This is helpful with remote check capture, for example. As Pranger notes, various issues crop up with mobile deposit capture where having a banker right there to help is useful.
Another aspect of live video in the coronavirus situation is that it enables a personal, human connection — safely — at a time when that is hard to come by.
“There is a human element and an emotional impact that video brings that non-video communication doesn’t,” Forrester’s Peter Wannemacher pointed out during a webinar on video banking.
Will the Surge in Interest Last?
Gene Pranger believes that the mobile channel is the most logical place to engage with a financial institution. And while he sees the need to deal with a human banker in person continuing, the pandemic is causing everybody in banking to rethink how consumers access their services when branches aren’t open. It’s an open question, many feel, whether consumers will come back to branches to the same degree as before the virus arrived.
After nearly 25 years of working on video banking technology, Pranger believes video — particularly mobile video, which generates the most interactions now — is becoming an integral part of omnichannel delivery. As he sees it, a consumer will begin a conversation with a text for simple queries and elevate it to a voice or video call for more complex issues. The key is a simple and immediate handoff.
Jeff Cain doesn’t see video banking and mobile banking as an either/or situation. “We are promoting all of our self-serve, remote channels — online and mobile banking, ATMs, our Text Concierge as well as the call center,” he states. “Video banking is a great additional delivery channel.”
Forrester’s Wannemacher is less certain that video banking’s bounce will last. Services like contactless payments and some digital self-service tools will continue to see increased usage after the pandemic, he believes, but it’s not certain video banking will have the same staying power.
More clear to the analyst is that after the pandemic, “leading banks will push very hard to ensure that a customer can complete any task through digital touchpoints. We’ll also see a major shift towards enabling a remote workforce, including contact center workers.”Back to Explore