FaceTime is Money: The Digital Lag in Video Banking

The Need for Better Branch Technology

It’s a far cry to call traditional retail banks innovative. Even more concerning is the growing gap between customer interactions and a nearly unachievable consumer demand from their virtual services, from apps to artificial intelligence. An unavoidable reality exists in the fact that in-person consumer banking is being conducted less overall and being used more specifically for higher complexity transactions. 

 

Read More: Reva, a Chatbot Powered by Artificial Intelligence

 

What's Driving the Digital Lag in Banking?

The base of the problem isn’t dictated by any digital lag, but the implicit lack of opportunity to resolve issues that could once be handled in person. Traditional retail banking environments thrived due to the awareness that a customer may choose to give their business to another institution if at any point they deem their experience unsatisfactory. As these environments have virtualized, institutions that fail to recreate the service recovery opportunities through novel features such as video banking are likely struggling with customer retention.  

The reality and rise of digital banking, when viewed in isolation, wholly outperforms any crystal ball expectations that could have been set by traditional retail bankers ten years ago. As digital customer service and digital customer experience evolve into a required conversation topic, a gaping hole still persists in the era of Alexa; banking apps still don’t allow consumers to do everything they need. Technological complexity and digital interaction management invariably reach a tipping point which can only be remedied, if it can be remedied, by video banking. 

 

How Soon Will Digital Banking Eclipse Physical Branch Banking?

Across Australia, the UK and the US already nearly 1 in 20 consumers are using voice-assisted devices to handle financial transactions. Enterprise giants such as Chase were quick to enable voice commands, yet artificial intelligence only goes so far with highly nuanced, explicit commands that can only be handled by advanced artificial intelligence voice or chat bots. Forward-thinking institutions don’t only implement these piecemeal practices, they iterate continuously to navigate conversational complexities as quickly as they arise in a test-and-learn environment.  We've seen this transition from in-person banking to direct mail, phone calls, asynchronous chat (followed by live chat) and now video banking.

 

Is it worth it?

The question of implementing artificial intelligence and video banking technologies does not exist in a void. The real cost of banking contact centers and customer experience is high. Offsetting even a fraction of a percent of inbound or outbound call volume quickly recovers the cost of any technologies required to induce such a reduction. The race to go digital doesn’t only reside within banking, but also between individual banks. Shaving inbound call volume and customer abandonment rates is an issue that each bank addresses in relative isolation, yet the compounding effects of the varied rate of virtual banking and digital customer service can’t be compared. Slowly but surely, banks are coming to terms with a future where the principle of 'listen to the customer' is evolving into a practice of 'listen to how the customer wants to talk'. 

What banks must address first is the inherent distinction between the circumstances within which they are acquiring and losing customers. The broad arena of traditional retail banks are selected by consumers for their perceived convenience; what most banks fail to recognize is that consumers are leaving at an alarming rate due to a lack thereof.  

Further Reading: 3 Best Practices for Selecting a Video Banking Solution

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