Face to face interactions in property transactions furthered by video technology
When people are talking about large sums of money - such as a loan for a house or their superannuation - they want to be able to put a face to the person they are talking to.
And the difference between that face to face interaction - and a first-name person in a call centre - is very significant, according to Defence Bank chief Jon Linehan.
“There’s no better example of this than the video centre established by Defence Bank for conferencing between staff, but which is now being used to give a human face to our staff as they talk to our more than 90,000 members.’’
Linehan says this is giving the nine mutual banks the opportunity to secure a competitive edge against their larger brethren. At Defence, he says 86% of transactions are online – reflecting both a diversified client base spread across Defence installations in the northern part of Australia, and a young client base with 62% of members aged between 18 and 45.
“What mutual banks can do is move quickly to offer the availability of options for the consumer varying branch by branch, the online video – a major Defence Bank initiative – and social media, and by doing so be cost competitive with the major banks.”
Linehan says these new avenues for interacting with consumers are obviously open to the larger banks, so what the mutuals have to do is be smarter in how they use this technology.
“There’s no doubt in my mind that Australian banking is a long way behind other sectors of the economy in its use of social media.
“This means there are opportunities that will allow the mutuals to enter this space more quickly as, in many instances, they are less tied to the traditional branch system.
“Not only does technology save on the cost of flying financial planners to remote locations, but it also addresses the critical issue of trust,’’ he said.
“What the video is doing is not only providing access to advice, but also access to trust and personal interaction.”
Linehan says small branch networks complement the mutuals’ potential advantage with technology.
“I am not decrying the branch network. It will remain integral to the banking system with the significant transactions, such as lending and large investments, still the domain of the branches. It reflects the fact that customers still want to see the branches: the bricks and mortar give them a sense of security.
“But, that said, transactions across the counter are expensive, and the banks that move quickly to use the new technologies, while still retaining a core branch network, will gain a competitive edge.”