SMS is among the most ubiquitous communication tools on the planet-three billion users worldwide according to Portio Research-but banks are struggling with how to fold it into their operations. Today, many banks offer text-based alerts around account balances, but two-way interactions are generally limited to transactional information; and capabilities have not progressed much in the past year.

Now there are signs that consumers are growing disenchanted. A recent Javelin study forecasts a big slowdown in the number of new households receiving SMS alerts as they conclude that alerts fail to deliver timely information, are too generic and are too difficult to tailor. "Consumers are trying it and not finding it as helpful as they'd hoped. Customers want SMS, but they want it better," says Mark Schwanhausser, a research analyst at Javelin. For the institution to entice customers and make the most effective use of SMS, Schwanhausser and other analysts say banks need to transform texting into a two-way engagement.

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