We’ve been hearing a bit about the 1964 World’s Fair lately because of its 50th anniversary. One of the many fond recollections was the prototype of a video telephone on display in one of the pavilions. By the mid-1980s, some of the big telecoms were trying to bring this technology to market -- but it was a flop with consumers.
It turns out the market didn’t want video phones, even though the technology existed. That episode serves as a lesson to large banks currently exploring how to boost personal banking with features like video ATMs within bank branches. The technology exists. But are consumers ready to embrace it?
[For More On Video Banking, Check Out: Bank of America to Add Video Conferencing to 500 Branches]
Today’s banks have something at their disposal that telecoms of the 1980s did not: big data and pervasive computing. The financial services industry is looking to make banking more personalized, so it would do well to use the right IT solutions -- including those that allow robust predictive analytics -- in order to introduce banking features that will satisfy their consumers and improve the bottom line. Also, a very large and growing segment of the population has access to smartphones and tablets and has the power to communicate with the banks, including over video calls at a time and place convenient to them.
Indeed, the challenge is to understand how to turn the data they have at their disposal into value. They can start by turning things on their head and stepping outside traditional banking platforms in order to engage customers. The paper bank statement, for example, will die. There’s no reason to have it around even now, except for legal requirements. Checks and cash will also become a shrinking market.
Stepping outside traditional platforms will help banks realize that they need to reevaluate self-service and customer engagement in this completely new environment. For the better part of four decades, ATMs have served them well as an extension of a bank branch. In the last 15 years, online banking has also been a popular branch extension. Banks must look at how they can leverage these and other channels as distinct revenue streams as the push for self-service continues. And they need to start soon: Companies like Google and even retailers and grocers like Tesco and Walmart have banking licenses and are looking to redefine the financial services industry.
Banks have to keep ahead of the technological trends that are transforming their industry. In three years, for example, the United States will be home to 115 million tablets. Tablet users are the kind of high-end customers that banks want, which is why it’s vital that the next generation of self-service channels be geared towards that platform. Banks will need fewer employees to help customers navigate online and instead can use them to strengthen customer relationships.
Which brings me back to the video ATM. Will customers really drive to their bank branch for the privilege of standing face-to-face with a video screen? Probably not. To succeed in the financial services industry of tomorrow, banks need to make sure they have a strategy around all self-service devices. Customers are ready to connect with banks over smartphones and tablets and are looking to be able to do it at a time of their choosing and at any location. And for that to happen, they must use their customers’ feedback to find the best ways to personalize their products.
Jasmeet Singh has close to 19 years of professional experience, including business and IT alignment, transformational outsourcing and helping clients achieve their business goals. Jasmeet has extensive experience in the financial services industry and has worked across ... View Full Bio