INTERACTIVE TV-As seen on TV
Where the PC has failed to create a truly mass market for Internet banking, interactive TV may
succeed. The trick is to turn banking into entertainment. But as Paul Skeldon, editor of Computer
Telephony Europe, discovers, this is not the only challenge facing aspiring TV banks
Retail financial services are facing a revolution: the welfare state is declining; the population is
becoming old - and supposedly, therefore, wiser; wealth is transferring; workers are working from
home; and, above all, banking customers are being offered more choice than ever before while
demanding better and better service. The technologists supporting retail financial services are also
facing a revolution. Technology change is accelerating relentlessly and, as the top-level executives
look to meet the challenges laid out above, they are putting increasing pressure on their technologists
to harness the relentless pace of change to meet these challenges. Of course, the Internet has been
seen as one of the main technologies that can effect this change.
It offers 24x7 service, the Martini ('anytime, anyplace, anywhere') principle and, most attractively, it
offers low distribution costs. It is widely thought - as a rule of thumb - that running an internet banking
site costs about £5 per customer per year, compared with around £50 for a bricks and mortar bank.
But the Internet also presents a massive threat to the traditional banking community: the relatively low
start up costs mean that it is ripe for new entrants to move in on their patch. It is estimated by analysts
KPMG that it costs around $6 million to set up an Internet bank. The average 'normal bank' would cost
around $25 million to $30 million; witness Nat West, which is valued at around $27 million. But it is
widely recognized that the Internet, as it stands today, is limited, especially when it comes to
disseminating services such as banking to the mass market.
Currently, it is the PC - and, if you are unlucky, the iMac - that provides the gateway to the web. But
relatively few people have them and, despite the falling price of technology, it is likely to stay so. But
there is another way. Television is the most powerful medium of our century; it is a shared, collective
experience in the way that the web is not and it entertains, educates, informs and culturally binds us
together. And nearly every home has one. A recent survey of 1004 consumers, conducted on behalf of
Pace Micro Technology by Gallup, found that the TV, not the PC, was the preferred method of e-
commerce contact, with 42 per cent saying they would feel more comfortable using television for home
shopping and banking and just 26 per cent preferring the PC and dial up access.
Even the supposed 'PC Generation' - the 16 to 24 year olds that have grown up with PC at home and
in school - appear to also prefer the TV as a means of interacting in an e-commerce environment, with
65 per cent being in favor. The link between this device and the Internet is not a new idea, but it is one
that is gaining credence as the channel for Internet access as a mass market, e-commerce medium.
And the possibilities it offers are endless. It is also interesting to note that, despite minimal marketing
and publicity, one in five of those questioned in the Pace/Gallup survey were aware of interactive TV
and some of the things it could do. The penetration of interactive TV services will increase as the
broadcasting and set top box technologies become more sophisticated. Early applications cover
games and limited 'extras' - such as Sky's football camera angle choices and so forth. But it will be the
embracing of the technology for banking and e-commerce that will see it being propelled into the
mainstream, believes AIT Group, a company focused on customer interaction software for financial
It is also interesting to note that the move towards interactive TV is taking place on two fronts. Set top
boxes are driving the move towards turning the TV into a device that can entertain, as it does today,
as well as giving access to the internet and allowing the sending of emails. Coming the other way, the
PC, traditionally an email/internet access device, is now receiving the processing power and
applications to receive TV broadcasts. Somewhere in the not too distant future the two will collide. And
this will see penetration of interactive TV rise from zero in 1999 to around eight per cent in 2001 and
up to a staggering 25 to 30 per cent by 2005, believes AIT Group. What this means long term is
anyone's guess, but it will see the web as we know it change - similarly wireless internet access will
also change the web as we know it - and the way we use all these access devices. But what does this
mean for the banking community? Well, interactive TV could be what puts the fun into financial
services. KPMG estimates that 80 per cent of people would rather change a nappy than work on their
personal finances. Interactive TV will help to address this, hope many in the banking and e-commerce
The TV is an entertainment device, the challenge is to make the financial services found upon it to
also be seen as entertaining. But there is a caveat: this kind of technology is not aimed at your ABC1s.
This is a channel for the C2s and below. Now these guys are aware of the Internet, but are very
unlikely to have ever come into contact with it. They all, however, have a television. This creates a
major new opportunity for the banks. Depending on how well the interactive TV services are marketed
- and on the strength of how well digital TV has gone so far there should be nothing to worry about - it
has the potential to put some form of e-commerce/web interaction in front of the majority of any
developed country's population. TV also allows banks to build relationships with customers through
the medium. Witness Cilla Black - a UK TV star - her USP is that she has a relationship with the about
10 million people in Britain who tune into Blind Date every weekend.
Harness this sort of appeal and you are looking at a scary number of customers. But all is not rosy. A
survey in the US, says Phil Middleton at KPMG, found that the number one choice of most people to
bank with via interactive TV was Disney. This means that this channel may open up all manner of
possibilities to banks, but they will have to sit quietly in the background - the banking services will be
fronted organizations connected with the world of TV or trusted names, the banks sit behind doing the
banking. This is an approach that could have advantages in the setting up of interactive TV services.
Firstly, it means that the banks are not involved in the hugely complex task of unraveling and working
within our highly complex regulations surrounding TV. There is the interconnection agreements, the
laws of taste and - this is where it gets interesting - the laws governing what you can and can't
broadcast on TV to do with business. How this side of the web/TV world is governed is going to be a
very exciting space to watch.
The banks already have a handle on the 1986 Financial Services Act and soon the Financial Services
and Markets Bill will be debated. But getting into any internet/TV banking tie-up pulls in a cornucopia
of regulations: data protection, intellectual property, trade marks, copyright, unfair competition,
obscenity, defamation and broadcasting laws to name but a few. Soon they will also have to tackle the
e-commerce bill. So how do you go about getting your channel up and running? There are five key
steps to developing and delivering the interactive TV channel, believes Middleton, and they must all be
developed in parallel. First, the consumer proposition is key to its uptake. Fail to get this message
across and you may as well get your coat. Equally important is the development of the operation of the
channel, particularly how it operates within the confines of all the other technologies and channels that
you already have in place - because as we are all well aware, no one channel will ever dominate.
Feedback from these two developments must then be channeled into developing standards and
compliances. Meanwhile the technologies you need have to be co-ordinated with each other and then
with all other relevant technologies you have in your customer facing functions. Finally, you have to
market the service you have developed to make these people want to use it. And technically this
process is fraught. How many technologies does this whole process involve at one point or another:
10, 50, 100? And how readily can you build this into your core customer contact center and
philosophy? The multiple platform conundrums that this throws up are solvable, but it isn't simple.
Admittedly, much of existing infrastructure can be reused and many of the web channel's application
components will still fit - if you use a multi-channel model. But this has to be integrated very carefully
to ensure consistency of service and record keeping across all channels.
Case study Crédit Agricole:on a télé near you
by Victoria Lomax
Crédit Agricole (CA) was an early mover within the digital TV banking field. Launched in October 1998,
the service was the first to go live in Europe on French TV network TPS. The bank additionally has
plans to launch on a second French platform, Canal Satellite, in the next 12 months. As other banks
directed their technical development towards Internet capabilities, CA moved into digital TV banking to
attract new customers to electronic banking. The service was initially launched in two regions and was
accessible to 13,000 existing customers.
Users are able to check their account details and investments, transfer money between accounts,
order chequebooks and send and receive electronic messages from the bank. They are even able to
access the service using their existing Minitel, Internet or telephone ID and PINs. CA found that, by
March 1999, five months after the launch of the service, 30 per cent of its customers were already
using the service. This figure was higher than the customer take-up rates for the Internet or Minitel
service over a similar timescale. The bank has received an extremely favorable response from its
customers. A customer poll revealed that 80 per cent of clients who used digital TV banking in its first
month had not had any previous experience with the other electronic channels already provided by the
bank. One third of users found that it changed the way they managed their accounts. An important
statistic for the bank was that 80 per cent of customers believed that the digital TV launch had actually
improved Crédit Agricole's image.
The bank sees this as proof that customers feel comfortable with digital TV banking. The TV banking
service has since been rolled out to 20 of France's 50 regions where it can be accessed by customers
using five keys on their existing remote control. No other equipment is needed for TPS users other
than the TPS set top box. The design was based on extensive consumer research and testing in focus
groups. French national broadcaster, TF1 (a major shareholder in TPS), and Open TV, the digital TV
operating system provider, came on board to help create the look and feel of the site. One of the
challenges encountered by CA during the implementation of the project was to take account of the
differences between the numerous departments of the bank, and integrate the corresponding
functions into a nationwide service.
It was also necessary to develop the interactive application under tight deadlines and to remain within
budget in a new and unknown area. Andersen Consul ting’s Kevin Barrett believes that CA has been
through a learning curve since the initial launch of its service. 'Crédit Agricole has learnt a great deal
over the past 18 months. It was an important discovery that the digital TV banking service actually
worked without any security problems. The service has proved to be stable and secure as well as
popular.' CA says it has come to realize the potential of the Interactive digital television service to
consolidate its existing customer base and marketing campaigns have become ever more
sophisticated. The bank believes that it has the potential to attract new customers to the service by
targeting them with specific information, demonstrations and offers.
Other French banks are moving fast to enter the digital TV banking arena. Both Société Générale and
Crédit Mutual have projects underway to launch their own services on Canal Satellite. Yet Barrett
believes CA's first mover advantage will be a key differentiator between banks, as it looks to extend its
presence to different service providers and to improve its service and product capabilities.