In a survey of opinion-leaders within Australia’s domestic retail banking market, the KPMG study encountered widespread investment in interactive video, including customer research, pilot projects and full program rollouts. In fact, 22 per cent of respondents indicated that they had already implemented a video advice channel and another 44 per cent will do so within two years.
This growing acceptance of real-time digital technology reflects bankers’ view that – while physical, face-to-face dialogue is the best way to share and sell advice – video enables more efficient use of experts and sales talent, and could transform revenue/cost ratios. As a result, most survey participants indicated that their strategies focused on video as a sales channel, rather than for routine service or transactions.
They also presently envision video advice specifically for niche customer segments, such as SMEs, mortgage seekers or rural customers, rather than targeting relationship businesses like high net worth, corporate or institutional clients.
What prompted this resurgent interest in video? The arrival of decentralized, lower-cost models for video delivery shifted perceptions, particularly since Skype appeared in 2006. Since then, the popular internet-based video calling site has integrated itself with major brands like Microsoft and Facebook, bringing easy and mobile video to the masses. Now, individuals and organizations of all sizes expect user-friendly video capabilities from the companies they deal with. The key question for bankers will be: are customers ready to embrace this channel at scale?
Despite growing acceptance that video will be a real force in retail banking, Australian institutions point to a wide spectrum of unresolved challenges. These include questions of security and privacy and how to integrate video with existing processes and performance cultures. Among survey respondents, 56 per cent worried that costs of video advice could outweigh benefits, and 39 per cent contemplated possible channel conflicts. The challenges highlighted centered less on the technology and more around process, people & change management challenges to bring this channel to life.
Due to the typical S-curve adoption of new technologies, it’s difficult to precisely pinpoint when Australian consumers will routinely access video advice at home or work. Regardless of the outstanding hurdles, the ambitious efforts by Australian banks will undoubtedly prompt the entire financial sector to sharpen its lens focus on how video can transform advice delivery, branch networks and business models.