Study Examines Motivators In Moving To Paperless Statements

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JupiterResearch has released findings indicating that 53% of online banking users would make the switch to electronic statements from paperless statements if they were made aware the e-statements were available and they were notified when the statement was ready for viewing.

Currently just 17% of online consumers have selected paperless statements. JupiterResearch said adoption would jump to 67% if online consumers were offered some small-value gift to make the move, and to 74% if a fee were involved in receiving paper statements.

"Although either or both of these scenarios might materialize in the long term, banks in the short term should focus on convincing customers to go paperless, rather than imposing it on them," said JupiterResearch's analysis.

According to JupiterResearch, paper statements have limited immediate value for consumers. It noted it interviewed one major bank that had found four of five banking customers do not even open their mailed paper statements, although they might keep them for future reference.

JupiterResearch said it found many financial institutions have booked strong returns on investment due to the switch to paperless statements from paper statements.

"In one case, Navy Federal Credit Union counted savings in paper and mailing costs of $0.53 per statement. In another, a major bank said that if indirect costs are considered, the savings is more than $1 per statement," the firm said. "Both institutions said these savings offset the costs of introducing and marketing the online-statement service. At the same time, there are potential losses of advertising revenue and messaging opportunities posed by the elimination of monthly mailings. However, unless banks are selling ad space in these mailings to third parties, these do not constitute real losses, because banks have many messaging opportunities available in their e-mail communications and on their websites."

In its analysis JupiterResearch said it found there is a natural gap between the declared intentions and the actual actions of consumers. To convince their customers to take action (i.e., by choosing to replace paper statements with paperless statements), banks must build and market electronic equivalents that afford those customers the same levels of comfort and security as do the ink-on-paper versions, the company said. In doing that, it also recommended:

* Offer access to historical data. Despite their apparently limited immediate value to consumers, paper statements are resources for future reference.

* Notify customers/members when their online statements are ready for viewing. According to a recent consumer survey's results, more than one-quarter of online banking consumers cited such notification as a requirement for them to swap paper statements for paperless statements.

* Enable functionality in paperless statements that is unavailable in paper statements. To enhance adoption of online statements, banks should develop features that stand in stark contrast to any available in paper statements.

JupiterResearch said its interviews found the following three main points in effective messaging about the positive aspects of paperless statements versus the negative aspects of paper statements:

* Convenience. The main appeal to consumers choosing online statements over paper statements is convenience. On one hand, they will be able to avoid receiving useless mailings every month, and on the other hand, they will be able to immediately access historical account data.

* Security. E-statements reduce the risks of identity theft.

* Conservation of natural resources. In one promotional campaign, Wells Fargo sent customers spruce seeds and suggested that replacing paper statements with paperless statements would save trees. In another campaign, Bank of America let customers making the switch choose between either accepting one-time compensation of $5 or contributing it to a conservation fund.

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