Time to Turn Off the Paper (Statements), Bankers: Report
Banks have struggled for years to get customers to accept electronic statements rather than printed statements.
But while banks have convinced some people to receive statements or bills online, half of these users also receive the paper version in the mail, according to new research published by Forrester Research Inc.
"The average bank is driving down paper but not doing so at the rate we believe they could," says Peter Wannemacher, one of the report's authors. "Banks have not failed here, but we think they can be more successful."
Even as e-statement and e-bill adoption trend up for checking accounts, savings accounts, credit cards, mortgages and home equity lines of credit, all the products share one stat: actual paperless adoption remains under 50% for each product.
Among the top reasons people still want paper, according to the report, include: "I want the paper version for my records" (48%), "I'm used to paper and see no reason to change (29%), and most interesting to banks, "my provider doesn't require me to switch" (26%).
Forrester drew its results from surveying 10,359 individuals.
To be sure, there are reasons for banks' paperless results gap. Regulatory concerns. Bigger digital fish to fry (e.g. keeping up with mobile demands). And the holdouts, a.k.a. customers who prefer paper. "You can't turn off paper for all the folks," says Wannemacher.
Still, there's one really good reason banks should spend more time convincing more of their e-statement customers to give up receiving paper statements: a clear ROI. Indeed, it costs a bank about $0.60 per month to mail just one customer document, says Wannemacher. Those cents add up for banks struggling to make money given the undercurrents attacking the industry: namely, high compliance costs and low interest rates.
Forrester's data implies, then, that banks need to provide some tough love for individuals who already receive e-statements . There's no silver bullet, but there are ways for banks to improve the paperless rates. Here are four Wannemacher outlines in the report:
- 1. Banks should set their default statement options to "online only" for new customer recruits. In other words, embed paperless adoption into the onboarding process but make sure to include a prominent opt-out for customers who prefer paper.
- 2. Banks should disable paper statements altogether and charge consumers who still want to receive statements in the mail. Some banks, including U.S. Bank, PNC and Citizens Bank, are already charging fees to people receiving paper statements.
- 3. They should better feature the customer's e-statement within a secure website to grow usage rates. Wannemacher highlights Discover as a good example of a company that has recently revamped parts of its secure site to make the statement, which displays seven years of data, more visible to a customer.
- 4. Banks could expand their mobile and email alerts to ease certain people's concerns they will forget to pay a bill. Bank of America, for one, alerts customers when they have a new e-bill, as do young companies like Check (formerly Pageonce).
In the years to come, as more customers bank through mobile channels, statements will likely get a makeover. GMC Software Technology, a customer communications management provider, demoed a better-looking statement for the mobile channel at Finovate in New York, for example. A better design could encourage a consumer to give up his desire for a paper one.