Kinect for Xbox 360, a controller-free, $150 gaming device thatallows users to operate their Xbox consoles solely through bodilygestures and voice commands, has made a splash among video game andelectronics enthusiasts. But is there a practical application forKinect outside the gaming world–say, in credit union branches?

The concept isn't as far-fetched as you might think. Microsoftis warming financial institutions up to the idea of using Kinect inbranches to develop hands-free, interactive video marketing tools.In a demo video Microsoft Financial Services posted to Facebook, aman interacts with a large screen inside a bank branch to learnabout auto financing, which then directs him to an employee forfurther discussion.

A Microsoft Xbox 360 spokesperson who asked her name not be usedsaid that while the company had no information to share regardingthe use of Kinect in credit union branches, they're piloting aproject this spring that will explore Kinect's value outside ofentertainment. Microsoft is launching a noncommercial Kinectsoftware development kit that will allow academic researchers andenthusiasts to explore the device for potential applications intheir respective fields, she said.

Several overseas banks, including the Bank of Moscow, arealready utilizing the technology as part of their marketingefforts.

The spokesperson said Kinect's capabilities includeadvanced audio, skeletal tracking of persons moving within theKinect field of view and an XYZ depth camera that measures thedistance of objects from the Kinect camera. “We believe thecombined creativity of Microsoft and the academic research andenthusiast communities will lead to new experiences that willrevolutionize our relationship with computers,” shesaid.

Financial industry analysts expressed mixedfeelings about whether Kinect has potential value to credit unions.Celent Senior Analyst Bob Meara said if Kinect made its way intocredit union branches, he envisions CUs using it in conjunctionwith Microsoft Surface, a large multi-touch screen that allowsusers to manipulate digital content through movement and touch.Several banks, including Royal Bank of Canada, have launchedSurface in their branches to provide customers with an interactivebanking experience.

But Meara doesn't foresee credit unions pouncing on Kinect anytime soon. He said he's not aware of any proven market share gainsfrom in-branch, interactive video marketing tools and that creditunions should sooner invest in technologies with knownbenefits.

“I'm doubtful it will be an impactful investment,” Meara said.“Credit unions are challenged with doing more with less, and thereare other technologies that have very solid research behindthem.”

Credit unions are better off investing in mobile, Web and socialmedia channel technology, said Aite Group Senior Analyst RonShevlin.

Shevlin also believes using Kinect for in-branch marketing might be cutting-edge, but it won't promisecredit unions a return on investment.

“There's a coolness factor there, and there's something to besaid for that,” Shevlin said. “But the vast majority of creditunions have got to have better things to do with their time andmoney.”

Meara said Kinect would likely only be tapped by a select fewcredit unions–those ahead of the game in innovation and technology.

“There will be some examples of early movers, but it won'tbecome commonplace any time soon,” Meara said. “It's an amazingdevice, but I wonder about its value beyond entertainment.”

Matt Davis, implementation advisor for FileneResearch Institute, said he sees value in the use of gaming devicesto educate consumers and liven up branches, but believes thetechnology would be too expensive for most CUs.

“Launching something like this in a credit union lobby is goingto be expensive,” Davis said. “But that doesn't mean it wouldn't beeffective. Lobbies are generally kind of boring places, so why notuse the space to teach and to excite people?”

With the majority of credit unions looking for ways to attractyounger members, could Kinect be a Gen Y magnet? Maybe. Davis saidGen Yers might use educational, in-branch gaming devices if they'refun and entertaining. But analysts say the primary result of Kinectimplementation would be a message to Gen Y that says, “Look at us,we're tech savvy.”

“It communicates that they understand and are willing to try newthings,” Davis said. “It makes them look professional andmodern.”

Shevlin added, “If credit unions are truly serious aboutattracting Gen Y, they have to realize this is a generation thatvalues technology. Implementing game consoles may not attract amillion Gen Yers, but it demonstrates that 'Hey, we're going to beforward thinking.' It reinforces the branding effort.”

Still, credit unions should have their eyes on other technologyinvestments to impress Gen Y, analysts said, the first being mobilebanking technology. Davis pointed out that Gen Y conducts most ofits banking on smartphones, not inside branches, meaning thatKinect-powered, interactive animations may not even be seen by theyounger generation.

“Mobile banking innovation would win over Gen Y more than asnazzy experience in the branch would,” Davis said.

For credit unions considering Kinect as a means to engage theircustomers on an interactive screen, Shevlin said if the cost werelow, it wouldn't hurt to try. Kinect probably won't close the saleof a new product, but it would certainly spur interest, hesaid.

“It's catching someone's attention and making them aware of anoffer, and in the selling process, awareness is first,” Shevlinsaid. “If it's cost effective, then sure, put them in and see whathappens.”