Customers at La Caixa, Spains largest savings bank, are being urged to spurn the queues for automatic teller machines. Instead, as suggested by a campaign being launched today, they should call up a virtual cash machine from the comfort of their 3G telephones. With a few taps on the keyboard, they will have access to most conventional ATM functions, with the obvious exception of cash withdrawal.
La Caixa, Spains largest savings bank, hopes this technology will win new customers in an increasingly competitive fight with other banks.
Until about a year ago, making money as a Spanish savings bank - or caja - was pretty easy.
Low interest rates guaranteed a sea of liquidity that the banks channelled into a booming domestic economy driven by builders, homebuyers, consumers and corporate expansion. However, the good times are over.
Growth in new homes sales - and mortgage lending - in Spain are expected to fall by half this year, while the US subprime crisis has driven up premiums in the securitised mortgage markets favoured by Spanish lenders to raise wholesale funds. Rising unemployment is undermining consumer confidence in Spain.
The cajas resistance to the downturn will depend partly on their ability to win new depositors or fresh custom from existing clients as other funding sources dry up. Gimmicks abound in the battle for customers. Caja Madrid, the countrys second largest savings bank, is raffling new apartments as part of a promotion to lure clients to a new high-yielding account.
La Caixa hopes its technological innovation will help it steal a march over its competitors. It has also run trials, using the video ATM as a portal, linking users to websites and search engines. Customers would be able to recharge pre-paid mobiles, do their banking, watch YouTube videos and book theatre tickets without straying from their 3G keypads.
"This is the sort of convergence model that mobile phone telephone operators have been talking about for years," says Nicols Luca de Tena, the Spanish businessman who patented the idea of using video-calling to access bank services.
He says Spain, with its high ATM and mobile telephone use, is the perfect test market.
"Of the 2.4bn visits made to ATMs in Spain every year, more than a third do not involve withdrawing cash," he says.
The product capitalises on La Caixas strength - it has one of Europes biggest network of automated teller machines, which will be used to promote the service - while exploiting Spaniards love affair with the mobile telephone. Because while the country lags behind the rest of western Europe in household broadband use, mobile penetration, at 112 per cent, is among the highest in the region.
Most importantly for La Caixa, about 90 per cent of all mobiles in the country will be equipped with a video-calling function by the end of next year, according to manufacturers.
La Caixa already accounts for about 80 per cent of the mobile banking market in Spain, meaning many of its clients are accustomed to receiving SMS alerts on, say, account and credit card movements.
However, only a small percentage of these do their banking over mobile phones, mainly because 3G operators portals tend to be slow and clunky.
The focus with the video-calling service, the project manager says, has been on simplifying communication with the bank. Customers who dial in to the service respond to a series of numbered command options - just like a real ATM - by pressing the corresponding keys on their telephone. The services response times are much quicker than with standard calls.
The main problem at the moment is cost: video calls are about twice as expensive as conventional telephone conversations.
The bank is talking to mobile operators about specially-reduced tariffs in return for guarantees on traffic volumes.
It also plans to subsidise call costs to help generate interest in the early days of the service.
Mr Luca de Tena is confident that mobile operators "will be falling all over each other to get on board". After all, he asks, "What better way for them to promote video- calling than through cash machines?"
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