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Are you ready for video banking?

Sharon Fisher//July 13, 2018

Are you ready for video banking?

Sharon Fisher//July 13, 2018

photo of mypioneer personal assistant
The myPioneer Personal Assistant application lets customers communicate with tellers over live video. Photo courtesy of Pioneer Federal Credit Union.

It’s still a nascent technology, but Idaho financial institutions are looking into video banking.

Video banking falls into three categories: interactive teller machines (ITMs) that include video in the ATM, video in the branch office, and online video via smartphone or PC.

Of the Idaho financial institutions that offer some form of video banking, the aptly-named Pioneer Credit Union, based in Mountain Home, is the leader. The company has used NCR ITMs – which it dubs Personal Teller Machines or PTMS – since 2015. It has 18 now, primarily in drive-throughs, such as the State Street branch in Boise, said Tracey Miller, vice president of operations. “It’s mainly so employees can help members with high-level questions” such as mortgages and loans, she said. The machines also let Pioneer service customers during extended hours, from 7 am to 7 pm, and they can handle most transactions. “Anything where we don’t have to physically hand them something,” she said.

photo of itm
Interactive teller machines, which Pioneer calls personal teller machines, give users video access to tellers. Photo courtesy of Pioneer Federal Credit Union.

At Pioneer, PTMs completed 40,000 transactions by the end of 2016, and 86,128 in 2017. By the end of May, they are already at 55,489, Miller said. “We’re on pace to do more than 100,000 by the end of the year,” she said. Pioneer has also added six people to its original team of five to the department, which works 12-hour shifts, she said. Essentially, it provides an extra branch, she said.

More recently, Pioneer is using software from POPin Video Banking Inc., of Sandy, Utah, for its myPioneer Personal Assistant online video banking smartphone application, which it launched earlier this year, Miller said. Like the PTMs, it is serviced from 7 am to 7 pm. (POPin was founded by Gene Pranger, who originally developed Pioneer’s PTMs.)

“Pioneer is one of the first in the country to deploy that,” said Scott Fieber, vice president of strategic solutions for Cook Security Group, a Portland, Oregon company with an office in Boise that installs ITMs. “It allows you to talk to someone face-to-face, in your pajamas and on weekends and after hours.”

Other Idaho financial institutions are taking a look at video as well. East Idaho Credit Union, in Idaho Falls, is working with Invo Solutions, a value-added reseller for banking that uses software from Vidyo Inc., and is expecting to deploy the service this year, said Cindy High, executive vice president. “We are actively seeking how this would work for our members,” she said, emphasizing the company doesn’t intend to use the technology to replace staff.

National financial institutions, such as Citibank and Wells Fargo, are testing or deploying video banking, though they have not yet made it to Idaho.

photo of tracey miller
Tracey Miller

For example, Wells is piloting video banking, but it has not yet been implemented in Idaho, said Julie Fogerson, assistant vice president of Idaho regional communications.

Some Idaho credit unions have bought ITMs but have not implemented video banking, said Fieber. In fact, over the past three years, his company has sold more ITMs than standard ATMs, he said. Idaho financial institutions that he said have installed the machines include Malheur Credit Union, an Ontario, Oregon-based credit union with two Idaho branches, and Chubbuck-based Idaho Central Credit Union (ICCU). Malheur expects to roll out video functionality in Q3 2019, said Bobbi Alcoser, vice president of operations and chief operating officer. ICCU is “actively working on implementation” but doesn’t have a timeline, said Laura Smith, director of public relations.

Other Idaho financial institutions tested video banking and decided it wasn’t for them. For example, in 2013 Mountain America Credit Union, which at the time operated 75 branches throughout five Western states including Idaho, tested Diebold Inc. ITMs. But the credit union decided not to go through with the project, said Mike Jacobsen, senior director of corporate communications for Diebold Nixdorf, in North Canton, Ohio. Mountain America confirmed it wasn’t going through with the project but didn’t provide details.

Jason Smith

In Idaho, credit unions are generally ahead of banks in video banking. “We see a lot of early adopters being smaller institutions, and especially credit unions,” said Damien Simonneau, director of financial services marketing for Vidyo, in Hackensack, N.J.

In addition, the original ITMs, from uGenius Technology from Sandy, Utah, were sold only to credit unions, though that changed when NCR bought uGenius in 2013, Fieber said. “We do find credit unions are more retail-focused, and banks are more commercial-focused, and it’s more of a retail solution,” he said. Video banking with document sharing can also help credit union members in rural Idaho with more complicated interactions such as completing mortgage documents, said Jason Smith, vice president of strategic resources for the Northwest Credit Union Association (NWCUA), which represents Idaho credit unions.

How people feel about video banking

According to Video Banking Report 2018, a worldwide Vidyo survey, 82 percent of financial institution respondents said they already offer or plan to offer video banking – a figure the company said has been consistent for three years. Of that figure, 9 percent said they planned to offer only branch video, while 10 percent said they planned to offer only online video. But the majority, 63 percent, said they planned to deploy both. (Vidyo did not include ITMs in its survey.)

Also of that figure, 35 percent said they have already deployed or are piloting a video banking service, while 20 percent already have a fully operational service. Of the ones who had deployed it, 75 percent said the outcome was as they expected or better, while 77 percent said their sales close rate was the same or better.

For the 18 percent of financial institutions that said they are not planning to offer video banking, 62 percent said it was not a business priority while 40 percent blamed a lack of information technology resources.

On the consumer side, a four-country Vidyo survey found that only 15 percent of consumers had been invited to either kind of video banking, while fewer than 3 percent had tried both. However, of the consumers who had tried it, 85 percent of online video banking users and 90 percent of branch video banking users said they would be willing to use it again.

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