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Last week, the Bank of England indicated that interest rates may stay at rock bottom levels until 2017 and many UK borrowers are breathing a sigh of relief. However so will many mortgage executives, who have been worried about losing ground to more agile brokers able to respond to the nearly two million UK house mortgage holders who have never experienced a rate rise.
When a rate rise does hit, many consumers are expected to review their existing mortgage. This presents a real challenge for lenders to cope with unprecedented volumes whilst ensuring that customers are provided with the right advice. Providing a large network of high skill and expensive advisors across the branch estate is expensive and inefficient, whilst reliance on telephony delivers a poor customer experience.
Banks can experience 32% revenue leakage due to unavailability of mortgage advisors. Customers having taken the day off to have one of the most important financial meetings they will ever have, march next door to a competitor when there is no mortgage consultant available to see them.
The industry is responding in many ways, including developing and improving execution-only channels, but also looking at efficient, customer friendly methods of providing advice. Video banking or remote adviser solutions are emerging as the leading alternative to face to face advice.
Video can be delivered to the branch, the ATM or the home. Branch-based video advice is already proven and here to stay, but is only the first step in making advice digital. Market leaders are already piloting video advice direct to their customers' home.
Video banking is a transformative moment in high value banking advice. It has the potential to achieve the impossible; reduced costs together with improved sales, customer experience and compliance. In the industry-leading example, Nationwide deployed a high quality video mortgage customer experience.
This allowed a small centralised team to cover hundreds of video enabled branches. Advisors are in a mortgage centres of excellence, delivering a consistent, customer friendly experience. The audio can be recorded and each document time stamped when it is shown to the customer.
Fears of customer opposition have proven unfounded. Customer experience research suggests that immersive solutions are capable of providing as high or higher NPS scores. In fact, our research suggests that customers actually prefer digital engagement and on demand services.
Ultimately, it is competition that will push the adoption of video banking. Already under pressure from the broker market, lenders unable to develop effective video banking propositions will lose out. Nationwide NOW, the Building Society's video proposition, could be a bigger digital disruptor than any FinTech start up in the silicone roundabout.
Video advice is coming, if your organisation isn't investing, isn't ready to go soon, where will it be in five years? Will you even be around?