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Improved technology and higher fuel prices are causing more Central Iowa bankers to consider videoconferencing as a way to better connect their increasingly far-flung branch offices.

Billed as a way to reduce “windshield time” by executives and trainers traveling to branches, the technology can do more than increase operating efficiencies, however. One industry expert says he’s now working with banks that have begun using videoconferencing to instantly connect customers with product specialists in other locations to explain complex products or provide financial advice.

Local bankers are listening – and watching – to determine how they might use the technology. AVI Systems Inc. in Urbandale, for instance, recently hosted a live videoconference for representatives from four Central Iowa banks that are considering investing in videoconference systems. The bankers participated in a live videoconference presentation by David Luff, a finance and banking practice leader for Tandberg Corp., a Norway-based company that sells videoconferencing systems worldwide.

“I think what’s driving it is just more and more demand from customers to have the ability to go to the bank and get the services they need,” Luff said during a videoconference with the Business Record at AVI’s conference room from his office in Portsmouth, N.H. “They’re not coming in to cash a check; they’re coming in for information about complex products, for financial planning, retirement, estates and trusts.”

Luff said a New York-based bank client that installed a videoconferencing system has doubled the rate at which it is cross-selling financial products by using videoconferencing to connect its clients with remote experts. But it may be a hard sell for Iowa bankers to adopt that use of the technology for its customers.

Videoconferencing systems now range from relatively inexpensive desktop-camera systems to “telepresence” systems costing hundreds of thousands of dollars that can make participants feel as though they could shake hands.

The Tandberg system that AVI used to connect the Iowa bankers for their demonstration, which is not considered a telepresence system, costs about $11,000. A similar system would have cost about $56,000 just a few years ago, said Les Hofland, a system sales specialist at AVI’s Urbandale office. In addition to the actual videoconferencing system, it would cost about $65,000 to outfit a conference room with the 98-inch screen, projector, camera and microphones that AVI has set up.

Videoconferencing enables participants to see subtle nonverbal communications cues not possible with traditional teleconferencing, Hofland said. “The expression, the eyes, whom they’re communicating with, you can’t get that on a telephone,” he said.

Bankers Trust Co., which has used videoconferencing for about the past four years to communicate with its branches outside Greater Des Moines, hasn’t discussed using it for customer transactions, said Randy Remington, the bank’s information technology director.

“If we had the right business reason, we certainly could do it,” he said. “We’ve recently gone through some technology upgrades with (Voice Over Internet Protocol) telephony and our wide area network which significantly improves our ability to deliver this type of utility.” The bank currently uses the system to conduct branch training, hold board meetings and conduct loan approval meetings, he said.

Luff said it can be difficult to convince conservative banking and financial service executives that the technology has sufficiently ma-tured to use it for customer transactions.

“The biggest obstacle I have to overcome is that people still think of video as a pretty bad experience, that it’s not ready for prime time, that’s it’s still an island technology,” he said. “Three things have come together to our benefit. The technology has gotten better, bandwidth availability has gotten better, and costs have come down.”

Using an internal network with high bandwidth, a videoconference connection will experience no picture breakup and high-definition picture quality, he said.

That’s not necessarily the case, however, with connections made over the Internet. The videoconference in which the Business Record participated experienced some occasional breakup of the picture, and a slide presentation that Luff attempted to make would not load properly.

A representative from VisonBank, one of the banks that viewed the Tandberg presentation, said providing customer access to experts through such a system isn’t on the horizon. The bank is considering installing a system next year, said Matt Jenkins, the bank’s vice president of cash management services. However, it plans to use the system only for internal communications, not for customers to access financial expertise.

“I see the advantage of having an expert available at every point of sale, but I’m not sure our clientele in Iowa, particularly rural Iowa, would view that well,” Jenkins said. “I don’t think it’s something that our clientele would receive very well.”

However, the ease of talking with a peer or accessing charts and spreadsheets sold him on the system. “It made it clear that if you put the technology in place, it practically runs itself,” he said.