Contributing Reporter

The virtual bank has arrived.

The Galleria at South Bay is set to be Union Bank of California’s testing ground for the West Coast’s first interactive banking kiosk, where customers can perform all of the transactions of an ATM and also apply for loans, discuss investments and speak “face-to-face” to a remote teller on the unit’s video screen.

The unit, to be officially introduced May 3 in the Redondo Beach mall, is the latest way to market financial services to customers who might not otherwise visit a Union Bank branch, while simultaneously reducing the company’s branch-related overhead costs.

“With the video kiosk, a person can do everything in 50 square feet that they now do in a 5,000-square-foot branch,” said Bob Weber, vice president and manager of Union Bank’s product and interactive product development.

A small number of the interactive units are in use in Columbus and Cincinnati, Ohio, but this will be the western region’s first.

Weber said Union Bank will measure consumer acceptance of the Galleria kiosk and then decide to what extent and location they might be deployed.

It is too early to tell, he said, whether the kiosks will replace ATM machines or the 40 in-store mini-branches the bank now operates throughout California.

“Consumer convenience is being redefined, and we’ve looked to see where the next convention will be in that field. It’s not good enough to just have a bunch of branches on a bunch of street corners,” Weber said. “We saw that we could put more banking services in a place where people already visit and combine their tasks.”

“Usually, banking consoles are kind of dopey and high-tech-looking, but we told Union Bank that they are going to be in a place where sophisticated shoppers can tell a product by its packaging and that they’ve got to design the kiosk for some commercial impact,” said Chris Hamilton, a partner at the architectural firm of Callison Architecture Inc. of Seattle, which designed the kiosk.

“(Shoppers) are going to be deciding whether they will spend their money on financial services or on new pants and things like that.”

Other banks operating in the West, such as Wells Fargo Bank and Bank of America, have had prototypes of similar units built for their perusal, but thus far, Union is the only bank here to announce plans for their use.

The unit, capable of handling two customers at a time, will allow them to conduct their banking by touching options on the screen or by calling up a teller, located at Union Bank’s Direct Banking Center in Irvine, its Internet online banking services base.

In addition to discussing investments and making deposits and withdrawals, customers will be able to open savings and checking accounts and receive printouts of their transactions.

Farther into the future, Weber said Union Bank may develop systems with video conference technology that would enable people to conduct “face-to-face” banking from their places of work or even from their homes.

“With the kiosk, we are using the telephone and television, two things people are very familiar with. And we will develop more ways of banking, as we know that consumers are becoming more and more comfortable with technology,” he said.

In choosing Redondo Beach as the site for the first banking kiosk, Weber said a “central area of convergence” was sought. Market studies showing that Los Angeles consumers visit malls an average of three times per month convinced Union Bank officials to choose a mall as the site for their first kiosk.

Malls have an advantage over sites at busy street intersections and other heavy foot traffic areas, Weber said, because people aren’t as hurried in malls and are in a “consumer mode.”

Weber said Union Bank chose the Galleria at South Bay because it found the mall esthetically pleasing and its location ideal with a heavy concentration of aerospace and high-tech workers. Such workers tend to be more willing to try new innovations and more comfortable with technology than the average person, Weber said.

The kiosk uses technology designed by Sony Corp. The technology was originally developed for a “mid-priced” video conferencing/data sharing system called the TriniCom Mini 1000, which Sony is readying for release later this year. But the first commercial use of the new technology will be in Union Bank’s South Bay kiosk.

“The Union Bank kiosk will basically have the brains of the TriniCom Mini,” said Gred Dvorkan, a Sony spokesman.

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