Riding the Whirlwind

Strategic Interactive Marketing for the Insurance Industry

Key Points:

Multimedia kiosks are being used by major financial service players. They are situated in branches and in public places.

Kiosks are now usually based on standard multi-media PCs with Internet browser technology.

5 .4 Kiosks

5.4.1 Kiosks are consumer operated machines providing a number of information and transaction services. They are typically situated in public spaces or in open areas within retail outlets. As multi-functional devices, used by consumers without any prior training, the user-interface is critical. Kiosks usually therefore make use of both text and graphical menus, touch-screen selection, and perhaps audio prompting. To maintain user interest, in what is typically an impromptu and casual encounter, they often use all the various forms of multi-media.

5.4.2 Kiosks are today built around a high specification multi-media PC and may operate either off-line or on-line. Besides the PC components they may include a telephone or video camera to allow dialogue with an advisor; a printer to produce hard copy; and a card reader to restrict access to some or all functions. When situating kiosks in public places they need to be robust and able to raise an alarm if under attack.

5.4.3 In the near future it is likely that kiosks will use Internet web browser technology. The same application then runs both on the Internet and on the kiosk, but with the added advantage that the more static information is immediately available from the kiosk's CD-ROM.

Kiosks reach new customers in new locations. They provide interactive services in a novel and easy to use way.

- Kiosk Generate Additional Traffic -

5.4.4 The business benefits of kiosks are:

• they generate additional traffic and services by being placed in new locations.
• they are an alternative where full retail outlets are not cost effective (wider distribution). In an alliance they can be used in the premises of the partner organisation.
• dual use: when not being used by a consumer, they can automatically show adverts and other visual material to attract a user.
• additional sales opportunities: they are attractive to a casual, uncommitted user who will not in the first instance approach a financial advisor.
• ROI: within a branch they undertake transactions too advanced for an ATM but at less cost than a clerk. Expensive expertise at a central point can be disseminated.
• customer accessibility: they can be available around the clock and in places where people tend to congregate.

Kiosks have wide appeal to the larger bancassurers.

- Attractive and Acceptable to Customers -

5.4.5 Amongst the interviewees there was a strong difference of opinion about the usefulness and acceptability of kiosks. Those who advocate them state:

• because they have evolved from ATMs, they are acceptable to a large proportion of the population.
• without a keyboard and placed within a cabinet, they look like a television and therefore appear less intimidating.
• they can present information in a clear, visually attractive way, and can even be fun to use.
• because the user is usually in control of the dialogue, there is an element of self-commitment.
• they can be situated in a wide variety of places such as bus and railway stations, shopping malls, factories and offices, libraries, etc..
• they can reach a much wider population compared to those who have their own PC and Internet connection. Many people have negative feelings about PCs, concerns about the Internet, or just cannot afford them.

The large financial service providers are the most committed to kiosks.

Some interviewees thought kiosks have limited applicability.

- Larger Bancassurers Most Enthusiastic -

Advocates tended to come from the larger bancassurers who already have a substantial investment in retail outlets. In such an environment, security is less of an issue; staff can be on hand to help users; and FAs can use the kiosk as a sales aid (in this case the kiosk is probably a standard multi-media PC). Larger organisations gain economies of scale by spreading the high cost of authoring the presentations over many units.

5.4.6 Interviewees who are less than enthusiastic stated:

• kiosks are too public which deters people from using them.
• they are too complex for simple transactions and for those in a hurry.
• they may help at the formative stages of the buying cycle but they will not create sales conversion - that is a considered decision and needs the right environment.
• in reality they are under-utilised for the substantial investment required for a good system.
• financial services are usually too complex.

Nationwide Building Society probably has the most sophisticated and expansive kiosk programme.

Extensive research produced a familiar "real world" user interface.

- Nationwide Kiosks Much Praised -

5.4.7 The Nationwide Building Society (NWBS) probably has the most advanced and extensive kiosk system in the UK. Called Interact, and first installed in early 1995, it aims to forge new and possibly closer relationships with customers. Interact provides a learning opportunity about FS products and their associated processes (e.g. obtaining a mortgage). Using the kiosk, customers determine what products they need as well as how to obtain them. Personal information is not currently part of the scope.

Kiosk systems can display 3D views of familiar worlds. Customers just touch the screen on the item of interest. (picture of MultiView 2000 kiosk)

Users are not overwhelmed by detail but those who wish to can "drill down".

• The touch activated screens actually show a 3 D picture of a building society branch in which customers browse around simply by pointing to things of interest (e.g. a poster about interest rates). By further selections, customers drill down to the level of detail that they require.

Quality and attractive kiosk system cost time, money and expertise.

Nationwide's mortgage calculator is just waiting to be used! (mock-up)

• Usage is higher than expected and market research shows that customers enjoy using the kiosks.
• NWBS advise prospective users of kiosks not to underestimate the resources required, to deliver applications that customers' value and expect (and this will change), and to ensure integration with business processes.
• For further information see the article in the Seeing is Believing report by M&G Reinsurance [now Swiss Reinsurance].

Other companies are participating in BT's TouchPoint kiosk pilot.

Kiosks look to be the next wave of consumer operated devices. Seen by consumers to be a form of ATM, they present fewer barriers.

5.4.8 The BT-led TouchPoint pilot involves many of the interviewees. The participation fee is £20K but one interviewee said the overall project cost was about £100K.

• TouchPoint consists of 24 London based kiosks providing product information and promotional offers. There are 20 participants and the aim is to learn about consumer's attitude to electronic commerce. The project is running late and is only now going live.

5.4.9 Other kiosk systems include:

• Co-operative Bank's BankPoint.
• Deutche Bank system that allows purchasing of investments
• NatWest Bank & Thomas Cook jointly developed kiosks providing financial services and holidays.
• San Paolo Bank Italy who allows its corporate customers to advertise on in-branch kiosks and to print money-off vouchers for customers.
• Lloyds Bank pilot system LloydsPoint at some universities.
• Barclays Bank & Abbey National are also believed to have pilots.

- Opportunity to Support Community Kiosks? -

• Many governments see public access kiosks providing state services and information, They may well be developed with private sponsorship or partnership.

5.4.10 Regarding suppliers, Anderson Consulting is a lead player in the $10m DaVinci consortium that is developing kiosks and other technology for electronic commerce. NCR has also made substantial investments in kiosk technology.