Everyone knows video rules the world, and more than ever video’s “kingdom” lies in our smartphones. In two years video will comprise almost 80% of the world’s mobile data traffic, according to Forrester Research. And mobile video consumption will grow by 900%.
Okay, so we’re all addicted to bingeing Netflix episodes, watching wacko stuff on YouTube and news clips. But that’s much different from having a face-to-face video chat with our friendly banker or credit union rep. Will the broader video trend drive use of video among financial institution customers?
Peter Wannemacher, Forrester Principal Analyst, says the video banking needle has already begun to move measurably.
Two out of five consumers say they would prefer video for doing at least one financial activity, according to Forrester research. While that still trails the 60% who would prefer to text, talk in person, or speak on the phone, 40% is not a small number. That finding covers any use of video, including one-way (self-serve) video for learning more about a product or a brand, live broadcasts, and two-way video chat.
The research firm drilled down further and asked financial institution customers specifically if they were comfortable using two-way video to speak with an expert or a customer service representative. The findings: three in ten say they’re fine with it. Of the rest, 42% were still not comfortable with video chat and 28% were “neutral.”
Video chat’s not for everyone, obviously, but Wannemacher believes the numbers will rise over the next few years, particularly among Millennials and younger people. But as he observes, 30% being comfortable with two-way video chat, “is nothing to sneeze at.” More importantly, 85% of consumers who used online video chat say they’d be willing to use it again.
Millennials Much More Comfortable With Video Chat
“Sometimes we over-focus on Millennials,” Wannemacher states, “but video is really powerful for that generation. They overindex in their hunger for video.” The analyst, who spoke during a Vidyo webinar, states that 44% of consumers 25-44 years are comfortable using video chat to communicate with a customer service representative. Even 25% of 45-54 year-olds are comfortable with video.
“Financial services customers under the age of 45 are more than twice as likely as those over 55 to feel comfortable using video chat.”
— Peter Wannemacher, Forrester Research
“Financial services customers under the age of 45 are more than twice as likely as those over 55 to feel comfortable using video chat,” Wannemacher observes. Younger customers coming into more wealth, and dealing with more complicated financial issues — buying homes, raising families and in some cases starting businesses — are a key target for use of video chat, the analyst states.
The problem is, most financial services firms offer zero or limited video chat capability. It’s not nonexistent, says Wannemacher, but of 120 financial services companies around the world that Forrester looked at only 8% offer two-way video chat on their websites.
Of the banks and credit unions that have invested in video, most have opted for interactive teller machines (ITMs). Essentially these are ATMs with a video connection to a live person, and are used in-branch or at drive-throughs. Video kiosks are another, lower-cost variation used in-branch. Their experiences will make the transition to mobile and online video chat that much easier, now that more consumers are open to it.
Two-way video, even if not mobile-based, however, can still make a strong case for customer convenience. Illinois-based Consumers Credit Union, for example, didn’t have enough loan officers available at a given location to handle member needs at certain times, resulting in long wait times. The credit union centralized its loan experts at one location and made them available to all branches by video in private rooms in every branch, according to Damien Simonneau, Director, Financial Services Solutions Marketing, for Vidyo. He reports that the average wait time for a new loan application at Consumers Credit Union dropped from 1.5 hours to under two minutes.
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Two Strong Use Cases For Video Chat
Some large financial institutions are finding that two-way video has particular impact with the small and mid-size business (SMB) market. That should prompt other banks and credit unions to reconsider their view on use of video.
As Wannemacher warns, “The fintechs, big techs, and some existing [banking] firms are coming for your SMB customers. Video is one way you can better engage them.” He notes that HSBC is doing this very well, connecting small business customers with its relationship managers by two-way video.
RBC, in addition to using two-way video to assist SMBs, is using it to connect its advisors with investment account customers. Wannemacher says the big Canadian bank is integrating “adjacent services” into the video stream, such as a dashboard that changes in real time as the consumer chats with the advisor.
Another large bank demonstrating measurable impact from video chat is Barclays. Simonneau says the global bank has allowed customers in its premier banking segment to chat by video with banking advisors since 2014. It has recorded Net Promoter Scores from video users 44% higher than for telephony users, and average handling times have fallen 25% as well, Simonneau reports.
“Some people think video sessions will take longer than a phone call,” he says, “Actually that’s not true. The interaction is more efficient by video.”
This level of video sophistication is not exclusive to large banks. Pioneer Federal Credit Union is using two-way mobile video and has found it particularly appeals to the elderly and to parents with children. Pioneer’s solution even has split-screen capability enabling members to see and speak with a representative and also enter data, scan documents, and sign with an e-signature.
Video works particularly well with small business owners and with investment account holders because in both cases they often have complex questions, and live video provides a sense of assurance and also perceived accountability.
“There is a human element and an emotional impact that video brings that non-video communication doesn’t,” Wannemacher maintains. “Banking and financial services have a utilitarian quality, but emotion is the most powerful driver of better customer experience.”
A Great Way to Increase Conversion Rates
Forrester’s Financial Services Customer Lifecycle has six stages: Discover, Explore, Buy, Use, Ask, and Engage.
Two-way video is particularly relevant to four of the six stages, according to Wannemacher:
Explore: As people explore various products and services to meet a need, video, even one-way informational video, can help and increasingly is looked for. Human interaction from two-way video adds reassurance and perceived accountability.
Buy: The decision to purchase and onboarding are probably the two most important uses for video chat, says Wannemacher. At the buying stage, video interaction reduces abandonment rates and increases conversions. For example, when a consumer has explored a new card but is a little nervous before saying yes, a video chat can help overcome that.
Ask: One of the most straightforward and obvious uses of video is when a consumer has a question about a product or transaction and wants to be reassured emotionally that they’re getting the right answer. A chatbot or computer screen is not nearly as reassuring or accountable.
Engage: For complex matters such as taxes or retirement planning — areas where a consumer is not necessarily buying a single product — video chat can help the banking representative better understand the customer’s financial life and do it in a time and manner that is very convenient.