Messaging Matters In Retail Banking

Russ Green

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 overall mobile customer experience is something consumers want. I invite you to read about how IDC views the role of messaging within retail banking, and about the steps banks should take now to deliver this important service to all consumers simply, securely, and reliably.

Mobile has become a key component in the overall retail banking customer engagement strategy. The technology has had starts and stops, but the overall trend continues to show that customers are flocking to their mobile device 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.

The success of mobile in banking will be key in grooming long-term relationships between banks and their retail customers. Mobile adoption is almost entirely driven by age, where the younger demographics have a much higher propensity in being 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. Having a strong mobile offering is a key reason why younger demographics are choosing larger banks for their financial needs.

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

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 want. This goes beyond alerts, as customers are looking for more two-way interaction using their mobile device and SMS. This 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

For more information, I encourage you to download the IDC white paper “Mobile Messaging in Retail Banking: Platform Approach Across Multichannel Provides Scale and Amplifies Impact,” sponsored by SAP Digital Interconnect.

Please also register for my upcoming webinar “What’s Next in Creating Intelligent, Interconnected Customer Relationships in Retail Banking.”

Russ Green

About Russ Green

Russ Green is CTO and General Manager of Interconnect Products for SAP Digital Interconnect at SAP. In this role, he leads the drive for innovation in new products and cloud services that intelligently connect and engage enterprises with people and things. Russ has a broad technology background ranging from database internals to telecom and is passionate about new technology solutions to real business problems. Prior to joining SAP, Russ held executive positions in product management and development at two startup companies in data management and mobile communications.