Bank of America Corp. is expanding its three-year-old push into video by putting screens in more of its branches so customers can do business with bankers in call centers across the United States.
In an era when more consumers are using video to consult with a physician or talk with tech support, the Charlotte, N.C.-based bank is betting they'll be comfortable buying a mortgage from someone on the other end of a screen.
BofA began installing automated teller machines with video screens two years ago and began testing screens in some of its branches three years ago. The bank's use of video to interact with customers is in contrast to some of its big-bank peers, who are taking a wait-and-see approach to the technology.
A key player in this effort is Charlotte, where BofA this year opened a video call center in the Gateway Village development on West Trade Street. Seated in cubicles with sliding doors to make transactions private, bankers look into a camera as they talk about home loans with customers they can see on a screen in front of them.
The bank's video push underscores the industry's transition to a new era in which consumers conduct more transactions online and make fewer visits to branches. BofA says it's putting the screens inside branches where foot traffic is too low to justify having a mortgage banker or other specialist.
Banks are also eager to make branches cheaper to operate, as they look to blunt profit pressures stemming from low interest rates and high legal costs. BofA's profit in 2014 of $4.8 billion was down 58 percent from 2013 as a $16.65 billion settlement with the federal government weighed on its earnings.
"Banks aren't making a lot of money in the current environment, so they are looking for ways to cut real estate and personnel costs," bank analyst James Sinegal said.
This year BofA plans to nearly double the number of branches equipped with video screens to 300 from about 180 currently. Customers can use the screens to talk to specialty bankers offering mortgages, small business loans or investment products.
The bank also is rolling out more of its video-equipped ATMs this year. Since 2013 it has installed more than 500 across the U.S.
To be sure, the branches and ATMs outfitted with video screens represent just a fraction of the 4,800 total branches and 15,800 total ATMs the bank reported at the end of last year. But the bank is watching closely to see how customers respond to the technology.
As consumers use video to interact with more kinds of companies, they should remember that a video transaction is never as secure as an in-person interaction, said Bill Chu, a professor at University of North Carolina at Charlotte's College of Computing and Informatics. Chu said he's not necessarily against such technologies, but he said moving a complex financial transaction from an in-person exchange to a digital one raises the odds of consumer data being accessed by a hacker.
"From a security perspective, it's never more secure than face to face because there's always a chance that things can be intercepted, a chance that things are not encrypted properly," he said. "You can have the most mature and secure technology in the world, but if people don't use it properly it's not going to be secure and safe."
BofA spokesman Terry Francisco said the bank's video interactions are secure, private and done over the bank's internal network. The bank's use of the technology complies with all laws and regulations regarding customer communication, he said. He said the bank records the audio from the video calls to comply with federal laws but does not record the video itself.
In a call center in Gateway Village, James McKay Jr. is one of about 15 mortgage bankers who speak with customers using a video screen.
McKay, 58, fields video calls from 9 a.m. to 6 p.m., while some of his co-workers work later to accommodate customers in time zones to the west.
McKay says he has six video calls a day on average. Typically a banker in a branch shows the customer to a video screen and connects the customer to the Charlotte call center.
One day in early March, McKay talked on video to customers in the District of Columbia, Florida, New York, North Carolina, South Carolina and Texas.
The bank's other home-lending video call center is in Plano, Texas. Video call centers in other cities house bankers who specialize in investment products and small business loans.
To date, the bank has put most of its video screens in branches in Southeast and Central U.S. markets, as well as the New York City metropolitan area. The bank plans for future screens to go mostly in the Central, Southwest and Northwest regions of the U.S.
In the Charlotte area, Mint Hill has the only branch in which a customer can interact with a banker on a video screen.
Why the Push?
Independent bank analyst Nancy Bush said BofA has been among the most "forward" of U.S. banks in experimenting with new methods to deliver services to consumers.
The bank's video strategy is an extension of that effort, she said, "but I don't see video screens becoming a dominant delivery method for them or for any other American bank any time in the foreseeable future."
The bank's move also comes as other companies give customers the option to interact with them via video.
Carolinas HealthCare System, for example, gives patients the option to have a "Virtual Visit" -- an unscheduled video meeting between a patient and on-call health care providers about minor health problems. American Express and car-rental company Hertz are among large corporations that have introduced video-based customer support.
While BofA's big bank peers aren't rolling out video technology in a big way just yet, some smaller banks and credit unions around the country are experimenting with it.
"They're going to portray it as giving you better service," said Ken Thomas, a Miami-based bank analyst. But in essence, video technology is about lowering expenses, he said. "It's a cost-cutting measure. They can't have 10 to 12 employees in every branch anymore."
BofA declined to disclose how much it is investing on video.
BofA, in some cases, has replaced teller lines with its video ATMs when converting traditional branches into new, smaller "Express Center" branches.
Michelle McLellan, the BofA executive over the home loans video operation, said the video-mortgage program "is not really a cost-saving strategy whatsoever." The screens aren't replacing bankers, she said.
"Video just gives you that added personal connection or personal touch," she said. "You just have a much deeper connection, especially when it comes to an important financial decision like a mortgage.
"And it feels a lot more conversational than it can be on the phone."