On-Line Banking: Company Aims to Bring Video to PC Banking Series: 12
(American Banker; 04/09/98)
Putting a fresh face on an old vision, one of the pioneers of banking by
kiosk is promoting a new place for video-conferencing: the privacy of the
Richard J. D'Agostino hopes his current venture, Videogate Technologies
Inc. of Charlotte, N.C., can meld the appeal of self-service remote banking
with the benefits of a face-to-face sales pitch.
Videogate's Web site will offer free software and a listing of businesses
ready to receive video calls.
Immodestly comparing his idea to the Yahoo search engine, Mr. D'Agostino
said he has the key to making "video on demand" live up to its long-ago- dashed
Among the obstacles have been the difficulty of handling data, voice, and
video information through conventional call centers, the absence of video
directories, insufficient telecommunications bandwidth, and high costs.
"We are not developing for yesterday's market, we are developing for now
and tomorrow," Mr. D'Agostino said, conceding that in at least one key area,
high-speed telecommunication, his technology may be ahead of its time.
But even that should change significantly in the near future. After a
series of false starts, cable television operators, including Tele-
Communications Inc., have begun offering access to the Internet via cable
modems. They handle data at rates ranging from 2 to 40 megabits per second, or
36 to 700 times faster than the 56-kilobits-per-second computer modems that
are the highest-speed on the market today for telephone lines.
The race for more bandwidth accelerated in January when leading personal
computer technology companies announced an agreement with regional Bell
telephone companies to increase the capacity of telephone lines.
Under the generic name of digital subscriber line (DSL), this embryonic
system is expected to transmit data at rates ranging from 1.5 to 9 megabits
per second, or 27 to 162 times faster than 56-kilobit modems.
Although slower than cable, the DSL specification is being hammered out by
Microsoft Corp., Intel Corp., and Compaq Computer Corp. These PC modems are
expected to be easier to install and cost less than cable modems.
The faster rates of data transmission should bring television-quality video
to computer screens at the same time that financial and consumer- technology
industry observers are heralding a convergence of PCs with TVs. Developing a
technological infrastructure for rich video communication between consumers
and businesses is the next logical step, Mr. D'Agostino contended.
Videogate intends to offer free access to its software and Web site when it
comes on the market in July, and to charge businesses between $1,000 and
$4,000 a month for a listing and a video-enabled link from its Web site.
Competitive professional-quality video conferencing systems cost up to
Videogate is touted as a dramatic new approach to electronic commerce, but
detractors express doubt that a market exists for it. They point to numerous
disappointments in video kiosk developments-including Mr. D'Agostino's former
company, Personal Financial Assistant Inc., which was bought and then closed
down by New York Life Insurance Co. The message may have been that high-tech
and high-touch do not mix.
David D. Strunk, vice president of NationsBank Corp.'s strategic technology
group, describes Videogate as a "compelling" product that "meets a real
"It opens up a whole new realm that has not existed before," he said. "It
offers high-quality graphics and text from the Web with a live agent that can
guide a person through" a complicated transaction.
Unlike conventional call centers that preserve computer data and telephone
lines in separate telecommunication links, Videogate's system converts video,
audio, and other data into digital packets that travel across the Internet to
By placing experts in mortgages, insurance, mutual funds, and other
products in a central location accessible by video link, financial
institutions could be on call to address highly complex and specialized
consumer needs around the clock.
"The ability to near-instantly connect to an expert and potentially close
the deal on the spot is a compelling vision," said Mr. Strunk. "As a consumer,
you are probably as hot for the deal as you are going to get."
Three financial institutions, one insurer, and an automobile company are
currently negotiating with Videogate, as is banking software vendor Broadway &
NationsBank is not among this group, Mr. Strunk said, but the bank has used
Personal Financial Assistant's kiosk technology.
Although having a customer service representative on hand is probably not
necessary for routine transactions, Videogate's system enables businesses to
combine information from their Web sites with any consumer software they are
running on their computers.
For example, a tax preparer with H&R Block could talk over the phone to a
customer while demonstrating, remotely, how its Tax Cut software works.
"This allow more sophisticated forms of human interaction to occur
electronically," said Tony Plath, director of the University of North
Carolina's Center for Banking Studies and a member of Videogate's board of
"You don't need to leave home to buy a mortgage or solicit investment
advice, and you have the choice about whether to turn the camera on or off,"
Consumers don't even need a camera unless they want to be seen by the
person they are talking with. That kind of visual intimacy may provide the
support that time-stressed consumers need when wavering over a financial
Mr. Plath said the technology is most useful "when you need some kind of
emotional reassurance that you are doing the right thing," which can come from
eye contact with a sales representative.
Other observers are concerned that these ideas will collapse under the
bandwidth requirements that can tax the telecommunications and Internet
"When you pick up the telephone, it is only on Christmas and Mother's Day
that you find 'all circuits busy,'" said Kevin T. Flanagan, company spokesman
for PictureTel, an Andover, Mass., company that makes video conferencing
systems using private phone lines.
"With the Internet, just logging on at lunch time is sluggish," Mr.
Flanagan said. "It isn't capable of business-caliber video conferencing."
"It is going to be a long time before consumers have the equipment to have
two-way video streaming into the home," said Robert Davis, managing director
in the competitive strategy practice of Dove Associates Inc., Boston.
At a time when many banks view home banking as a way to "drive down
transaction costs, it seems like this would drive them back up again," Mr.
"It is only going to make sense for a small segment of customers who are
willing to bank from home," said Edward L. Neumann, director in Dove
Associates' Washington office, who has extensively researched the interactive
Even if 10% of bank customers are conducting some form of home transactions
by 2000-at least double the current level-Mr. Neumann estimated that few of
those would be receptive to the service.
Mr. D'Agostino said he would be more than happy with a single-digit-
He said he learned while developing video kiosks that banks generally never
knew whether the person who walked up to them was a millionaire or a homeless
"All people who use this and who call banks have a common bond," he said.
"They have money." Copyright c 1998 American Banker, Inc. All Rights