The coronavirus pandemic has forced banks to adjust the way they interact with their customers, and many have boosted their digital platforms to better serve their clients at a distance.
Several banks have found success in their video banking platforms. The technology, they say, allows them to serve customers in a safe and convenient way, while still providing a personal touch.
Toms River, New Jersey-based OceanFirst Financial has been using video banking to connect with its customers for the last five years — an investment the bank says has paid off amid 15 months of social distancing and lockdowns.
"We have been on a multiyear path to make sure that we are pivoting our investment into digital and out of retail as our customers make those choices themselves," OceanFirst CEO Chris Maher said. "[Digital] is where the transactions are going, that's where our customers are going, and that's where we're making our investments."
The $11.6 billion-asset bank operates 58 retail branches in New Jersey, metropolitan Philadelphia and metropolitan New York City. In 2019, the bank had double the number of branches it has now, a testament to the magnitude of the bank’s shift to digital products, Maher said.
Customers have made 220,000 transactions over video in the past five years, Maher said.
"We're doing thousands each month," he said. "That's a highly efficient way for us to deliver extraordinary service across a wide geography with very few branches."
The bank is extending its video banking services to mobile devices, and plans to provide full video chat capability in its call center by late this year.
The service, however, requires a significant investment in training the bank’s employees, Maher said.
"It's not the technology that is a barrier. Having a video session is a pretty straightforward thing. It's not a big deal to add that function," Maher said. "Adding dozens of bankers at OceanFirst who know how to do video and how to connect in a professional and engaging manner, that's the barrier, and that takes years of hiring and development and recruiting to build up a cadre of people that are good in that medium. Not everybody's comfortable with that. You have to be able to look through the camera and connect with people and listen."
OceanFirst operates a specialized call center where it normally staffs its video bankers, but amid the pandemic, its video bankers have been working out of their homes, Maher said.
The bank is expanding its Toms River headquarters, building a six-story, 80,000-square-foot space that will act as the hub of its digital activities.
The bank has also grown its technology staff more than 11-fold over the past six years — from seven in 2015 to 81 now.
Maher said the bank’s investment in digital and video is a necessity as it scales back its brick-and-mortar presence.
"You cannot consolidate a branch without investing in a new infrastructure to serve your customers long term," he said. "I don't think the majority of banks are going to jump into [video banking], but they may be forced to, down the road. We're very pleased with the customer satisfaction scores and the responses we're getting from our clients, and we think it's a wonderful model. But it is a rare thing today."
The bank has also enhanced its mobile banking app in recent years, adopting payments platforms such as Apple Pay and Android Pay, and a hybrid robo-adviser called Nest Egg, a digital product that customers can access via video session.
One bank that shares OceanFirst’s embrace of video banking is Minneapolis-based U.S. Bank. The $553 billion-asset bank recently added video to its co-browsing service, a feature the bank introduced about a year ago that allows a customer to remotely share a screen with a U.S. Bank employee.
"We're doing thousands of these co-browse sessions every week, and now we’re doing them with video," said Tim Welsh, U.S. Bank's vice chair for consumer and business banking.
The bank also recently added virtual appointment scheduling. Like many other retail banks, U.S. Bank has leaned heavily on appointment scheduling for in-branch visits amid the pandemic, making banking by appointment the default option in how it interacts with its customers.
For customers that want to interact face to face, Welsh said the bank decided to give them a virtual option.
For the most part, bankers are taking the video appointments out of the branches, while some operate out of a call center, Welsh said.
Welsh said the bank makes an effort to connect customers to a banker working at a nearby branch.
"What we’re finding is that even though people are connecting by way of technology, they like the fact that the person they're talking to is local," he said. "That's not universally true, of course, not everybody needs that. But there is something about being able to say, 'Are you enjoying the nice sunny day that we're having here in Las Vegas?' — or whatever city you're in. That breeds a level of comfort that seems to be very helpful."
The branch is still relevant, for now
Despite the investments in digital and the engagement their new video services are getting from customers, Maher and Welsh said they still think the branch has its place in banking.
"Our efforts to secure digital customers are more successful in markets where we have a branch. So, there's value to the brick and mortar," Maher said.
However, he said, the bank has realized it doesn’t need the same concentration of branches in particular areas that it once had.
"The branch trading area has gotten much wider, so the branches are important, but they can be spaced much farther apart," he said.
While some customers may continue to come into branches for simple transactions, such as to cash a check, Welsh said he thinks rudimentary in-branch transactions will decrease as digital adoption grows. The majority of those who choose to come into a branch will likely be seeking more tailored and personalized services from their bankers, he said.
"I think what is exciting is the fact that you can now do those transactions in a more simplified manner. It’s creating the opportunity for people to ask questions about either technology or their finances that they may not have been able to ask in the past," he said. "The fact that you don't have to run in to just cash a check is now creating the opportunity for them to have more significant conversations, and I think that's going to continue. I hope it continues."