Jul 22, 2019
Today, we're going to discuss when it's appropriate for FIs to implement ATM video solutions. As we all know the banking industry continues to transform and FIs have to transform along with it, but this doesn't always mean that the same solution will work for every FI. Video solutions can be tricky and may or may not be the right solution for your customers. Our panel today will discuss how you will know whether or not video is right for your environment.
Scott Anderson: Hello, I'm Scott Anderson and I'm your host for this episode of COMMERCE NOW. On today's podcast we welcome Diebold Nixdorf's Chris Gill, Senior Director of Global Advisory Services, Dawn Winston, Senior Product Manager DN Banking Teller Products and, Brendan Thorpe, Senior Global Demand Lead for Banking Software.
Scott Anderson: Today, we're going to discuss when it's appropriate for FIs to implement ATM video solutions. As well, we all know the banking industry continues to transform and FIs have to transform along with it, but [00:00:30] this doesn't always mean that the same solution will work for every FI. Video solutions can be tricky and may or may not be the right solution for your customers. Our panel today will discuss how you will know whether or not video is right for your environment so let's dive in.
Scott Anderson: Dawn, I'd love to start with you to sort of set the stage here. Can you give us a quick overview on the video solutions that Diebold Nixdorf has brought to the table today from a product standpoint?
Dawn Winston: Yeah, absolutely and Diebold Nixdorf is committed to [00:01:00] offering several different video teller solutions to financial institutions, banks, and credit unions and really we want to be able to offer what makes sense to a financial institution's business model and branch concept model. So if you, as an institution, are more interested in furthering your customer or member experience and making sure that you have that personal touch or the interaction with an employee at your [00:01:30] institution, then you would be more interested in something interactive video teller.
Dawn Winston: And that interactive video teller, essentially, allows the teller to drive the entire transaction session with the consumer standing at a service device, with the consumer just offering input or approving transactions, and that does allow the teller to have that longer touch time with your customer or your member. So they can do things like [00:02:00] improving that customer's experience or even doing things like upselling to your customer or member.
Dawn Winston: And then we do offer another solution that really is more about switching your staffing model. So maybe you want to transition some of your teller staff to do other roles like selling or marketing some of your products and you're more concerned about efficiency of your financial institution, so in that scenario they're not spending as much [00:02:30] touch time processing transactions. They really are focused on doing things like cardless authentications or overrides and approvals of checks and the transaction at the consumer's end switches back into a self-service mode freeing up more time for your branch staff or your central office staff to work on other roles within your institution.
Scott Anderson: Great stuff, thanks for sharing that. And given some of the capabilities that our portfolio offers today in the marketplace, Chris, I'd like to [00:03:00] ask you from the perspective of our advisory teams and the customers you're speaking with, what are some of the more common use cases for the deployment of video by banks and credit unions today?
Chris Gill: There are really three different categories of use cases that we've seen in the market.
Chris Gill: The biggest one is really around improving branch operational efficiency and in this case the institutions are looking to impact the staffing costs in the branch where they're servicing the drive-up, and they may have certain tellers that [00:03:30] are servicing the drive-up. Whereby replacing the drive-up lanes with ATMs with two-way video, they can impact the staffing levels in the branch and reducing the costs of operating those branches. At the same time, sometimes, there are some branches where the drive-up area is removed from the lobby area, and it creates some inefficiencies in handling branch traffic, so a video solution there can again, help with the operational efficiency [00:04:00] and require less staffing.
Chris Gill: We do see there are some instances where there are certain types of branches where the use case is more compelling. We've had a couple customers that are looking at in-store supermarket branches where they're eliminating the teller counter and replacing it with ATMs with two-way video. That way they can focus in those branches on opening up new accounts and interacting with people in the store and not doing transactions so that's kind of [00:04:30] one use case in this category.
Chris Gill: Another one would be where they have branches in smaller markets or remote markets, where the low transaction volume branches, yet they still have to maintain a certain minimum level of staffing to handle transactional activity. And in those cases again, they could really eliminate the teller role but still provide the routine transaction capabilities but with video agents instead of tellers in a branch. So for the most [00:05:00] part improving operational efficiency is really the primary business case.
Chris Gill: Now, I think the use case around institutions that are looking at expanding their branches into new markets or to fill gaps in their existing markets, but they're looking to do it at a lower cost. So we've had discussions with a number of organizations that the opportunity here is to build a branch where they can still provide routine transactions using video, and they [00:05:30] have a couple people in the branch that are there for customer service and opening up new accounts. So it's perceived as a way of not having to spend as much money on a new branch, but they can still provide that face-to-face service albeit over video.
Chris Gill: And then the last kind of use case that we've seen is around improving customer convenience and hours of operations. So some institutions have video tellers that are available until [00:06:00] let's say 7:00 PM or even 10:00 PM, that provides a competitive advantage in the market where they can provide teller service at longer hours of service. Or we've seen a couple institutions that are in markets where they are competing against institutions that are seen in stores that are offering longer hours and so their competitive response is offering video to match their competitor's hours of operation advantage.
Chris Gill: So in North America, I would say those are really the key use cases. Now in, [00:06:30] outside of the US, we've seen, typically in the Middle East, where they're using video primarily from an expanded transaction set point of view. So for example, the Middle East where they can provide greater withdrawal amounts in cash leveraging video rather than enabling at an ATM, so they can provide longer hours for that but provide that capability leveraging an ATM with video.
Chris Gill: So again, in some markets they're looking at the [00:07:00] ATM with video as an opportunity to provide additional transactions that cannot be done on a standard ATM.
Scott Anderson: Interesting, so lots to think about for financial institutions who are trying to make some decisions around what video might look like as part of the retail banking strategy. What do you think some of the key criteria that institutions need to consider when they're contemplating video as part of their retail banking strategy?
Chris Gill: So I think there are really three different areas that institutions need to consider when contemplating [00:07:30] video.
Chris Gill: Number one, is looking at their customers and members, currently serving or in the markets that they're looking at serving. So we've done some research in this area around consumer acceptance of self-service and video and not surprisingly younger consumers tend to be more self-service oriented and so they tend to have a higher level of interest in video than older consumers okay. So looking at your existing customer [00:08:00] member base, or the markets that you're in, it's important to really look at the characteristics of those consumers and are they more open to using alternative methods to doing their transactions than other segments are, so I think that's number one.
Chris Gill: Secondly, is important to look at what kinds of activities are they doing, are you doing in the branches and again, to some extent, the customer mix. So are you doing fairly routine deposits and withdrawals in your drive-ups [00:08:30] or in the lobby that can be easily moved over to being done over video, or contrast, do you have a lot of business customers coming to the drive-up and they're making large deposits that involve coin, or do you have a lot of check cashing transactions at your branch where customers or members are looking for cashing checks to the penny. If that were the case then that maybe, that would probably, be less attractive as an option for a branch to deploy video.
Chris Gill: And then [00:09:00] I think the third thing is you need to look at branch specific factors from a location and site point of view. So for example, if you have a branch that's located on a high traffic road where there's a lot of road noise, that may not be a good candidate for video just due to some of the issues around the engagement, and the customer experience over a drive-up ATM, maybe less conducive to an area where there's a lot of noise for example. So I think it's important to look at the characteristics of [00:09:30] your existing branches as well when determining whether it's the appropriate location for video.
Scott Anderson: Great, thanks Chris. Brendan, anything you wanted to add to that?
Brendan Thorpe: Just to pick up on some of the points that Chris was making. One of the key things around video is making sure that users have a great customer experience when they're actually using the video solution. There's a couple of key factors that will play into that.
Brendan Thorpe: One of the key messages Chris was making was really you've got to think about what it is that you're actually going to deliver [00:10:00] using video. Typically, it's not going to be your general transactions. It's going to be transactions where something's either gone wrong or somebody needs assistance with something. So straight away you're pushing it down into some of the lower volume transactions, some of the more difficult things.
Brendan Thorpe: So obviously one of the key things is once you get to that point you're either frustrated because you can't move forward, or you're in a situation where you really do need help. The system needs to be responsive, so the teller needs to be available to come online. [00:10:30] So you've got to look at the type of transactions, what the volume is going to be of those transactions, how you're going to staff it to make sure that consumers aren't standing at an ATM blocking it from other people but aren't getting frustrated because it's not getting responded to quickly. But also making sure that the teller on the other end is capable of actually delivering the transaction that they're looking for.
Brendan Thorpe: If you get that mix wrong, you're going to end up in a situation where people will try video and then will fall away. They won't use it again. So for [00:11:00] video to be successful, it's got to deliver something that you can't do with a card and a pen. Something that's a little bit unusual. It maybe at a stress situation where you've lost your wallet, and you need access to cash services quickly, and it's a great way to do it or it could be, as Chris says, drive-up ATMs where typically you may have had somebody using vacuum tubes and a glass tube but now you've got a machine there. They still get the same kind of experience and it's immediate.
Brendan Thorpe: However, you do it have a clear vision of what it is you're trying to deliver, the transactions [00:11:30] that you're trying to deliver, and understand how you're going to staff it and make sure that customers get a good experience.
Brendan Thorpe: I don't know if you'd add anything to that Chris?
Chris Gill: I think it's really important to understand typical consumer behavior and the typical consumer that maybe using video.
Chris Gill: So in today's environment a customer that comes to a branch, their mindset, is they're going to either park their car, walk inside, and do a transaction at a teller or they're going [00:12:00] to drive up to an ATM lane and put their transaction in a tube. So in the latter, the first case, they're expecting to walk inside the branch and so if you've got an ATM in the vestibule that's running video, but you have a teller inside, a consumer is not likely to stop at that ATM and use that for video teller when they can walk inside and use the regular teller.
Chris Gill: So one of the things that we've seen is if you give customers options, one of which they're already very comfortable with, and the other that they've never experienced, they're always going to default to [00:12:30] the option that they're most comfortable with. And we've seen some institutions that have deployed video in the lobby or the vestibule, but they also have full-service traditional teller services inside and that has resulted in very low transaction volume using video because they're giving customers an alternative or different options, one of which they're very comfortable using already.
Scott Anderson: So Chris, with all of these criteria and the different options that FIs have to consider, what are some of [00:13:00] the key drivers to finding an accept rate of investment on video? Can you share some examples of what might be required to achieve an acceptable ROI?
Chris Gill: So there are a couple factors there. One is really around the staffing ratio for the number of video agents per video ATM. So typically, we will see 1.5 to 2 video units per video agent. Going with that kind of a ratio you need to have some cost take out on the teller side in order to balance that. So [00:13:30] quickly we have to say for every video agent you need to reduce this 1.5 to 2 teller staff in order to get the appropriate ROI.
Chris Gill: So the staffing ratio is very very critical into achieving the ROI. Yet, at the same time, critical in that if you don't have the right ratio you could lead to a suboptimal customer experience because the customer will be waiting much longer than desirable for a video agent to become available.
Chris Gill: The other key factor is really [00:14:00] the scale of deploying video terminals. So what we have found is that given the upfront investments for video, it's important to deploy video at a minimum of six to eight locations, if not more, to really get that full ROI on the solution because if not, then you're looking at a much much higher cost per transaction then you would by deploying it at multiple locations.
Scott Anderson: Got it. Thanks so much for that. What in your opinion, Brendan or [00:14:30] Chris, are some of the characteristics of institutions that have been most successful in deploying video to date?
Brendan Thorpe: So from my perspective the ones who've done video the best have all had a clear understanding of what it was they were trying to achieve from a customer experience perspective. They knew the transactions they were trying to deliver and they were very focused about it.
Brendan Thorpe: I think it's also important that at the end of the day video is a multi-channel activity. It's one of those things that generally covers a whole range [00:15:00] of different channels. You can deliver video on mobile. You can deliver video on a self-service terminal. You can deliver video at kiosks in branch.
Brendan Thorpe: However, you do it, delivering something that is purely just self-service, in isolation, and not integrated into the branch environment, which are the ones that have been really successful have done, is leading yourself down a route where you're going to basically build a lot of costs that's not going to deliver the kind of return that [00:15:30] you're looking for.
Brendan Thorpe: Chris, I don't know what you'd add to that?
Chris Gill: The most successful deployments are where it's really an integral part of their strategy and achieve certain objectives and they really have defined the use case most effectively and then deployed the right configuration of video.
Chris Gill: I would say the other characteristics of leading institutions are they really demonstrated a high-level of execution of the video concept. So they thought through [00:16:00] the people that are working that are handling the calls. They well thought through the transaction set and the desired experience. They are measuring the right things in evaluating whether they're getting the return on investment.
Chris Gill: But I think, as a side note, I think what institutions really need to recognize is that most consumers have never had an interaction over video from a banking point of view. So from our experience, the imperative is on delivering a great experience [00:16:30] the first time they use the technology because if they don't have a good experience, they will not use it a second time. So all too often institutions that have rolled out video haven't executed very well and as a result they're not getting the user take up and user adoption that they're hoping for with respect to video.
Brendan Thorpe: As Chris says, that's one of the key symptoms of poor implementations, and we've seen that in some very very large implementations in the US. [00:17:00] Where it's just been deployed for general transactions without having a clear vision of what they're actually trying to deliver beyond the different experience, and it does deliver a different experience, but you don't get the repeat usage and that's critical to making video successful.
Scott Anderson: So with all of this in mind, and as financial institutions are grappling with do I or don't I consider video as part of my strategy, Chris, what other alternatives do we have versus investing in video [00:17:30] that might achieve similar objectives and what should they consider before going down a video path?
Chris Gill: Well, so I think there are a couple different options, and I'm sure Brendan can chime in after as well.
Chris Gill: First, is the objective really is to prove operational efficiency and reduce operating costs at the branches. Then making sure that the institution has appropriately leveraged their existing investments in ATM, online, and mobile functionality that improve customer convenience [00:18:00] and migrate routine transactions to self-service.
Chris Gill: I would say a majority, a high percentage, of institutions that we work with have not fully taken advantage out of investments in deposit automation on the ATM or mobile deposit or things like person-to-person payments for example. So I think the first step is to really make sure you're getting the most value out of the investments you've already made in self-service and digital channels.
Chris Gill: I think secondly, [00:18:30] is if you're again, looking at migrating certain activities to a lower cost channel, is looking at the functionality of your existing ATMs for example, and it maybe a better use case to increase the functionality of your existing ATMs, which could therefore move additional transactions to that channel, rather than laying in the additional costs of the video infrastructure. And to that end, we're seeing institutions that are doing core integration, [00:19:00] adding additional functionality to their ATMs, that can achieve that objective.
Chris Gill: And then last but not least, I would say some institutions are looking at tablet integrating where for certain kind of exception transactions like over the limit withdrawals or enhanced funds availability on a check deposit for example, that could be enabled via tablet integration. Where someone in the branch could get alerted that there's someone [00:19:30] at the ATM and wants to get a thousand dollars in cash. They can approve that transaction without requiring a customer to interact with a video agent.
Chris Gill: So I think there are a number of alternatives to investing in ATMs, video ATMs, that actually offer a more compelling return on investment than the video route.
Scott Anderson: Brendan, anything to add to that?
Brendan Thorpe: Yeah, just to pick up on a couple of points Chris made because there's some really good good ones that he made there. If you look at, let's [00:20:00] just pause video for a second. Let's look at branch.
Brendan Thorpe: Branch, at the end of the day, irrespective whether somebody's coming in via self-service, somebody's coming in via another mechanism, the most powerful thing you can do within that environment is start to link up those systems so that they can all work and adding video to that adds another dimension to that system in terms of the ability to make sure that customers are getting service quickly, easily. They can use the channel of their choice, and they can interact with the financial institution [00:20:30] in the way that fits them best.
Brendan Thorpe: Now, for some demographics that means going to the teller. For other demographics, that means they'll always choose self-service. Others will do everything they can through mobile. There will be a very strong place within that for some form of self-service transaction whether somebody is doing that through mobile, somebody's doing that through a traditional self-service device in the form of an ATM, where they need assistance and that assistance can be provided either by somebody walking up to them saying hey, can I help you, without [00:21:00] using a tablet, or it could be provided remotely by somebody using a video solution.
Brendan Thorpe: One of the things that DN brings to this, and I think this is absolutely unique in the market, is that when we look at how we deliver that solution, it's delivered using the same base technology. To give you an example of this, if you were at a self-service device, and you hit a help me button and that help me button is connected into our systems, it goes into the same queuing mechanism irrespective of whether it's being directed to a tablet, because the [00:21:30] branch is open, and you're going to get assistance from somebody walking up to help you, or if it's out-of-hours, it's going to go in that same queuing mechanism and then get allocated to a video teller who can then interact with you.
Brendan Thorpe: So all of this technology is connected and integrated into a solution that's focused on one thing and that's giving consumers a great experience within that financial institution's systems and that's really important.
Scott Anderson: That's great. That very important point Brendan and a wonderful segue. Dawn, I wanted to sort [00:22:00] of present you with the last question. We have some fantastic perspectives and needs in this marketplace around assisted service, video in particular, so what does the future look like for video solutions within our Diebold Nixdorf Portfolio?
Dawn Winston: Yeah, so we are not really changing what we will be offering from a consumer standpoint so what the customer or member necessarily will be seeing. We'll still be offering both incarnations of the solution that I mentioned at [00:22:30] the top of the podcast. Either the full interaction throughout the entire session if a teller or a representative at the FI or just the video assist option where the teller or the employee comes into give overrides or do that cardless authentication.
Dawn Winston: What we really will be focusing on the future at Diebold Nixdorf is our, kind of our Commerce Now slogan, Beyond Omni-channel. So we want to make sure that, as [00:23:00] Brendan mentioned, if they want to start a transaction on a mobile device or start it on their online banking or what we've been mentioning so far here, start it in a self-service channel. We can easily pause a transaction or hold on to that transaction and resume it in another channel, and because we have the advantage of a common transaction processing engine, we have the infrastructure built in order to be able to easily move [00:23:30] seamlessly from one channel to another so that you can pre-stage transactions.
Dawn Winston: You can start out with a transaction you think is not so complex but suddenly becomes very complex, and bring in that financial institution employee, so the Teller or the Customer Service Representative, to do those assistance type functions or completely take over the transaction and complete it for your customer or your member.
Dawn Winston: So that's what we're focusing on now and for the future [00:24:00] is making sure that we are making that omni-channel or that multi-channel experience seamless to your end users, to your customers and members and providing a better experience because we can have that common transaction processing engine and common infrastructure on the back side connecting all of our channels together.
Scott Anderson: That's great. Thanks so much Dawn. Really interesting, that from a Diebold Nixdorf perspective. We [00:24:30] thought long and hard about this and we've got solutions in place that aren't just single use alternatives here. That we've really thought about how we can leverage this across the infrastructure and enterprise up in FI. I do think this is a great place to wrap up and thanks again for all of you joining us today.
Scott Anderson: To learn more about topics like this logon to dieboldnixdorf.com or click on the link in the podcast notes shown below. Until next time. Keep checking back on iTunes or however you listen to our podcasts for new topics on Commerce Now.