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Text alert from consumers: Mobile messaging matters in retail banking

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Retail banks need to get the message: Short message service (SMS) technology is a critical component of mobile customer engagement. The integration of SMS into the comprehensive mobile customer experience is something consumers want.

Mobile has become a key component in the overall retail banking customer engagement strategy. While the technology has had starts and stops, the trend continues to demonstrate that customers are flocking to their mobile devices to interact with their bank. Analysts and banking experts agree that mobile has seen significant year-over-year growth and influence in banking engagements, where now most retail banks are seeing anywhere from 50-70% of their customers using mobile banking and other mobile-related services.

Enhanced CX: The future of banking

The application of mobile in banking will be crucial in forging long-term relationships between retail banks and their customers. Mobile adoption is driven almost entirely by age, with younger demographics having a much higher propensity to be active mobile banking users than older demographics, who slightly favor the online channel over the mobile one.

For now, larger institutions are doing a better job attracting and retaining younger customers, and have a higher percentage of mobile users than community banks and credit unions. Being able to provide the flexibility expected by consumers in the digital age by offering a strong mobile experience is a top reason why younger demographics are choosing larger banks for their financial needs.

Despite the success of mobile over the last few years, some challenges exist. Only a small percentage of individuals are willing to use their mobile device to open a new bank account. While screen size and form factor pose obstacles for adoption, the process needs to be simplified to take advantage of the integrated technology of the mobile device, utilizing the camera and messaging to help streamline account opening, user authentication, transaction validation, and other processes.

Beyond alerts: Engaging the banking customer

When it comes to customer engagement in retail banking, there are three distinct offerings: The downloaded app, the mobile browser solution, and SMS/text messaging.

While adoption of SMS is growing, the integration of SMS into the overall mobile experience is something that consumers desire. This means moving beyond alerts to deliver customers two-way interactions via their mobile device and SMS. These engagements can be delivered as a self-service tool, or even when a customer is on location in a branch.

Here are some key thoughts specifically around messaging within retail banking:

  • Contextualized and personalized messaging is most effective when delivered through SMS or other highly accessed apps, as opposed to in-app bank messaging or e-mail
  • The secure platform of SMS is an excellent way for banks to provide next-generation security as well as true multifactor authentication
  • Enterprise messaging can improve operational efficiencies by shifting consumers to a lower-cost channel
  • Bankers need to work with vendors in an environment that understands the complexity of delivery of SMS across a global environment; this is not an afterthought of the mobile banking offering
  • Random, uncoordinated touchpoints are ineffective—there must be an overall solution that coordinates efforts across the entire ecosystem (for both customers and employees)
  • Safe, secure, and reliable interactions using SMS are critical for success and confidence
  • Transparent, seamless and “intelligent” engagement simplifies lives and builds loyalty, and that in turn improves overall customer satisfaction
  • In-branch messaging can be a very effective tool in assisting customers waiting for an appointment, validating a transaction, or conducting routine banking activity such as address changes, new accounts, or closing on a loan
  • Consumers more likely to stay with a bank that makes their lives easier in closing, focus on the “last mile” with customers and drive conversions and customer satisfaction upward and onward

Learn the steps banks should take now to deliver this important service to consumers simply, securely, and reliably, and how International Data Corporation (IDC) views the role of messaging within retail banking.

This post was originally featured on The Digitalist, and has been republished with permission. 

Russ Green
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November 28, 2017
Russ Green

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