Video calls are now a standard feature on smartphones but getting customers comfortable with talking to a person on a screen remains a hurdle to the adoption of video conferencing in branch banking Central Texas-based Extraco Banks for instance began using video conferencing 10 years ago But the banks tellers are still busy with walk-in customers on payday Fridays and its high-definition video phones tend to be used more by retail customers than commercial clients We wanted to be able to connect customers to someone thats a product champion that knew a lot of answers and could take a deep dive on issues like a customer dispute on a really busy day said James Geeslin vice chairman of Extraco Banks and CEO and president of Extraco Consulting Even large banks that have invested in the technology have had to actively push it to customers In the past two years Bank of America has built 23 advanced centers small branches ranging from 1 200 to 2 000 square feet in space unstaffed but equipped with videoconferencing and sensors and equipped 850 financial centers with video conferencing technology But Bank of Americas branch transformation team has found that customers are less intimidated by the technology when theyre guided through its entire use said Jon Wolf Bank of Americas senior vice president of consumer business transformation In the past two years Bank of America has built 23 advanced centers and equipped 850 financial centers with video conferencing technology Will Rice for Bank of America To reach its full potential industry analysts say video conferencing in bank branches should be serving the small business customer and customers with complex needs like mortgage origination In a forward-looking study by McKinsey Company published on Thursday researchers predicted that video conference rooms would play a part in helping customers connect to specialists In the old days you would have a mortgage originator get in their car and theyd be at one branch this day and another branch this day said Jim Burson senior director at Cornerstone Advisors They would rove or they do things by appointment In an Aite Group study published earlier this month a survey of 1 000 businesses showed 71 of millennials would be interested in learning about new products and services from video conferencing whereas only 47 of baby boomers expressed the same interest When we talk to small businesses about level of interest said Christine Barry senior analyst at Aite Group were seeing high levels of interest but it does depend on the age of the person Bank of America has opened up video conferencing to retail customers but finds that the technology cuts down time especially for commercial clients in financial centers who more often require a specialist To provide that access immediately without them having to schedule another meeting and come back is really where were seeing the best feedback Wolf said When introduced video conferencing was presented as a way for banks to reduce costs at branches It has potential to reduce or actually increase cost said Mark Schwanhausser director of omnichannel financial services at Javelin Strategy Research The technology could help a bank reduce the amount of employees Schwanhausser said but also could add cost as customers expect to be able to always access higher-paid bankers that are more specialized Its not like you can throw any college kid on the video conference line he said I think theres going to be a bunch of factors that come into play when it comes the cost For Extraco the technology has helped reduce operating costs as the company estimated video phones have contributed to roughly a 30 reduction in full-time equivalent work Bank of America however plans to use the technology to improve employee efficiency At the same time that the bank has been increasing the amount of video-only advanced centers the bank has also been increasing the amount of specialists to its branches Wolf said In the Bank of Americas advanced centers a smart concierge screen turns on and a banker on-screen greets the customer and begins to explain the capabilities of the branch Theyre surprised Wolf said about customers experiencing the branch for the first time They are used to having to wait in the lobby If the conversation at the welcome screen has to run longer customers are directed to a video conference room In that conference room the banks greeter can transfer the customer to a specialist That same person that greeted them in the lobby is waiting for them in that conference room Wolf said Its a familiar face and weve already started the dialogue so you dont have to start all over again