How an Idaho credit union is using live video banking
- An Idaho-based credit union is piloting mobile video banking to reach customers who live far away from its branch network based in southwestern Idaho.
- Mobile video banking is a way to develop trust with customers making critical financial decisions, a move bigger institutions are also considering.
For a credit union with just 14 branches confined to southwestern Idaho, reaching 52,000 members across all 50 states and overseas military bases is a challenge. For the past two months, Pioneer Federal Credit Union has tested a live mobile video banking feature called myPioneer Personal Assistant that will let customers recreate the in-branch experience from afar.
“It’s essentially FaceTime for your banking relationships,” said Tracey Miller, vp of branch operations. “If you can imagine a mom with three kids who can’t make it to the branch — she can use her iPhone or Android phone, go to our app and call one of our employees based out of our contact center and see their face as she goes through a loan application.”
The credit union has tested the feature with employees and plans to make it available for all customers in the coming weeks.
While the top half of the video chat window will display the banking agent communicating with the customer, the bottom half will feature a form where the customer could review a loan application and sign with a fingertip. Pioneer sees mobile video banking as a natural extension of the Personal Teller Machines it launched two years ago. The machines are drive-thru ATMs that let customers video conference with credit union staff.
“It’s the way younger generations are communicating,” she said. “We thought it would be beneficial for Pioneer to look at mobile video banking to be able to handle corporate questions, new accounts, loans or just to talk about loans or payments.” Customers will be able to do video banking for extended hours, from 7 a.m. to 7 p.m. Monday to Saturday.
Pioneer is using a mobile banking video application called BankOn, developed by technology company Financial Town. In addition to mobile video, customers will be able to use tablets and desktops. For launch, video banking will be available on a standalone app, but the credit union says it plans to eventually integrate video chat into its mobile banking app.
As fraud prevention is a concern, Miller said the ID checks for video banking have an extra layer of security because Pioneer agents can ask customers authentication questions face to face in addition to a username and password. She added that when video chat is integrated into the mobile banking app, customers will be able to authenticate with a choice of methods, including a username and password, iris scan or fingerprint.
By launching a video chat feature, the credit union is balancing the need for digital banking tools that can resolve issues quickly, while maintaining a human touch that many customers want. A recent survey from Accenture highlights the notion that the bank branch is alive and well, with 87 percent of customers polled saying they plan to use their branch in the future and interact with a human when they go there. While video chat for banking is not yet mainstream in North America, some overseas banks are making inroads. For example, Citi is using video conferencing with gold plan customers in India and reportedly plans to expand use of the technology to U.S. and European markets, and European banks have used Skype and Skype-type services for a couple of years.
Financial Town, which is working with other credit unions on video banking solutions, said it boils down to nurturing trust with the customers who aren’t using a brick-and-mortar branch.
“For a certain segment of the population, when they’re making life-critical decisions, they would like to have a face-to-face interaction to give them that emotional connection,” said Gene Pranger, CEO of Financial Town.
One analyst who spoke to Tearsheet said the move is pro-consumer, but the tough part will be to nurture enough interest to justify growth of the channel. “From a member perspective, this is a great idea,” said Ron Shevlin, research director at Cornerstone Advisors. “The challenge is cost and return on investment. Will the credit union see enough interactions through the channel to support the investment?”
Photo courtesy of Financial Town