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Virtual bank branches get Facebook boost 

Facebook has announced the launch of a 'video calling' feature for its 750m active users. Meanwhile Google has launched a beta test of Google+, its social network platform, adding video conferencing services to enrich the emotional and social experience. Such announcements are potential game changers in how people interact, not just within their social networks but also in the wider business and banking environment.

So how are such developments relevant to high street banks? Major retail banks have always relied on branch networks to reinforce the essential elements of their customer relationships: trust, convenience, trusted advisor status. The challenge for banks has been how to use technology to provide a rich one-to-one customer interaction that can compare to the branch experience in terms of providing information, advice and cross sale opportunities, yet at a lower cost.


The advent of Facebook's video chat capability could, in time, help change customers' acceptance of a virtual branch offering and enable banks to enhance the quality and value of remote customer interactions.


Certainly, banks have not been slow to spot the potential of 'virtual' branches:

  • ASB Bank in New Zealand has one of the most developed virtual branch experiences – it recently launched its 'virtual branch' on Facebook, allowing people to 'talk' to selected staff about their finances.
  • In February, Bank of America announced plans to close its lowest performing branches and trial video conferencing rooms for high net worth individuals.
  • BBVA in Spain launched a virtual chat agent, 'Nathalie,' as part of a project to promote innovation internally with staff. 'Nathalie' uses artificial intelligence to build on her ability to answer staff queries. BBVA is evaluating its potential with consumers.
  • Russian Standard Bank is planning to launch a new online customer service through video chat.
  • NAB in Australia has launched 'Virtual Terminal', an online portal which provides real-time responses for credit and charge card transactions.

For existing high street banks, virtual branches offer a means to extend geographic reach, reduce costs and build relationships with Generation C, the connected generation. At the same time however, they present new entrants, retailers and established brands with a real opportunity to connect directly with this demographic and to steal a march on traditional providers.


By Hugh O'Reilly, Associate Partner in the UK

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