Video calling has become the new normal for businesses worldwide. That's one clearly established consequence of the pandemic. And companies are not just using video calls for internal meetings with colleagues and partners - they're also video calling with customers a lot more frequently than they used to.
During the first 3 months of the pandemic alone, our clients in Banking saw a spectacular +400% average increase in the number of client video calls they did. Now the question is: will the growth of CX video calling be a temporary development?
We say video calling is a trend that’s there to stay - Covid-19 has only accelerated the adoption of interacting with customers via video. Here are 5 reasons why.*
(* We’ll mention research in Banking & Insurance mainly, but the trends apply to customer interaction in all industries).
1. The trend toward digital started long before Covid-19 [+ the numbers to prove it]
Even after the lockdowns are over, video calling will remain one of the leading channels for customer interaction in banking - next to face-to-face client meetings, phone contact, and mobile/digital banking.
That’s because the pandemic has only accelerated an already-existing trend of moving toward digital contact and using video calls for interacting with clients. And these are the numbers on digital banking to back up that statement:
Digital Banking statistic #1
The shift from branches and brick-and-mortar to digital started a long time ago. In 2017, 80% of all customer touch points in banking already occurred via digital channels (McKinsey & Company).
Digital Banking statistic #2
Over 90% of customer interactions in the banking industry have now shifted to digital channels such as online, mobile banking, digital wallets and call centres (Accenture 2019).
2. The trend toward video banking already started years ago, too
Video Banking statistic #1
In general, in the B2C market too, consumers have widely adopted video calling. Regular use of apps for live video chat increased by +171% between 2015 and 2018 (vs. a +200% increase for messaging apps). Today, 1 in 3 are video calling with friends and family at least once a week.
Video Banking statistic #2
Talking B2B and video calling for customer experience. In 2018, 80% of financial institutions were already offering video banking or planning to offer it in the near future (The Financial Brand & Vidyo 2018).
Video Banking statistic #3
Research showed that in 2017 already, over 60% of insurance professionals were planning to use video chat for at least one of their services (Efma 2017).
Video Banking statistic #4
Banks already using video chat solutions for interacting with customers report these top 3 benefits (The Financial Brand 2018) :
- Video CX positions your organisation as innovative (65% of banks mention this benefit)
- Increased customer satisfaction (56%)
- Faster service (56%)
Video Banking statistic #5
A study in Wealth Management & Investment revealed that even affluent investors - a customer base typically considered ‘traditional’ - saw the benefits of video calling with financial advisors. 61% of ultra-high-net-worth investors reported they were open to using video chat with their advisor, eliminating the inconvenience of travel while still developing personal relationships (Spectrem 2016).
To sum up all these banking statistics, video calling is running at speed for a huge expansion in the coming years. Some market research predicts the global video conferencing market will grow by +7.9% annually until 2026. So it's the perfect timing to hop on the trend of CX video calling and start creating a competitive advantage. Or, to put it differently - if you're not offering clients video banking now, you're already lagging behind.
3. The pandemic has accelerated consumer adoption of digital contact channels
The trend towards video customer contact, from before COVID-19, is currently accelerating and consolidating due to lockdowns and social distancing.
A very recent study by Kearney among banks throughout Europe shows that at the moment, only 47% of European banking customers still choose physical channels to research and buy new products. In other words, more than 50% of consumers prefer remote contact channels for their banking customer journey.
Percentage of banking customers using physical vs. remote channels now and 2025 (Kearney 2020)
Based on the increase in video banking started during the pandemic, Kearney predicts that from 2025 onwards, remote channels will grow to be the preferred channel for 65% of banking customers - while physical bank branches will continue to decline. So European banks will need to adjust to this trend and focus on further developing their digital channels. The decline in branches leaves a gap which can in turn be filled partially by video calls as a new remote channel for customer interaction.
These statistics are backed up by similar research results from McKinsey: in Italy, Spain and the US, 5 to 20 percent of customers are expected to increase their use of digital channels when the Covid-19 health crisis is over - or 5 to 13 percent of consumers in other countries.
If the forecasted rise in consumer preference for digital banking turns out to be true, McKinsey concludes that this will accelerate customer adoption of digital channels in retail banking by up to 3 years.
4. Physical bank branches will continue to close
These statistics deserve a paragraph of their own. Bank branches - and physical offices in all other industries - have been closing long before COVID-19. And they will continue to do so, now that the pandemic is accelerating consumer adoption of digital & mobile banking.
The graph below tells it all. For the last 12 years already, the number of bank branches throughout Europe has been decreasing. Where Western Europe has seen a branch decrease of 24.6% - Southern European bank branches have declined by almost 50% since 2008.
Source: 'A new normal: Fortifying your distribution channels in a world post-COVID-19', Kearney 2020
Although the rate of branch closures depends on the region that a bank is in, these statistics show a crystal clear trend. The study leads Kearney to predict: “we are likely to see as many as 40,000 branches (25 percent of all branches in Europe today) close across Europe in the next 3 years.”
5. Video calling brings great benefits to your customers and your business
We mentioned earlier how in 2019, 90% of customer interactions in banking had already moved to digital channels (according to Accenture). However, the same study showed that for discussing more in-depth topics, 77% of financial customers prefer to communicate face-to-face with their bank.
Call it a coincidence, but video calling is the perfect channel for combining both digital and personal customer interactions.
It’s fast, convenient for your customers (they pick a time) and just as personal. For discussing complex topics, it can even be more personal or clearer than meeting face-to-face, as it allows you to share your screen or co-browse with clients.
These are 3 major benefits of video calling that we have established, over meeting with clients in person:
- Save time
Video calls not only eliminate travel time, they are up to 30% shorter than face-to-face meetings.
- Sales conversions go up
Video calls make the whole customer journey more efficient. Our client ING, for example, raised sales conversions on business loans by +33%.
- Improved NPS scores
Customer satisfaction is consistently higher for video calls than for in-person meetings with clients. With the help of video calls, our customers have reached NPS scores ranging from +63 to +78.
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Conclusion | A new omnichannel strategy: pick the right channel for each type of client conversation
The corona pandemic has shown that big organisations like banks and insurers can innovate fast digitally if they have to.
The next step is to stay on this wave of innovative speed and start looking critically at your omnichannel and digital transformation strategies for the years ahead. Whatever happens, there’s no going back to the old days before COVID-19. As this article has shown, the pandemic has advanced the future of customer interaction like we’re in a time capsule.
An example of how to add CX video calling to existing channels for customer interaction
Your customers have widely adopted remote, digital channels for interacting with your business. And once consumers get used to doing things digitally, they won’t return to physical channels. So you will have to do the same - adjust your channel distribution accordingly and make the move toward digital too.
How? It will not have to be a shift to 100% digital. For every type of customer interaction, pick your channel(s) wisely. Video calling, for example, is perfect for more complex or ad hoc queries.
As we like to say: there’s a right channel for the right moment.