Paperless banking is a no-lose, self-funded initiative that benefits all parties involved.
More than half of U.S. households are banking online. Of these, almost half (47%) are paying bills online. But eight out of 10 households still get paper statements for their primary checking and savings accounts.
The industry has already seen its lowest transaction costs for check processing; fee income from this side will only shrink as checks migrate to electronification and banks are saddled with investments in new fixed costs while maintaining their legacy systems.
Therefore, it is crucial for financial institutions to move toward initiatives that will pay off in lower variable costs. Here's why:
It's good for your brand.
Approval ratings for financial institutions dropped sharply in the last two years as data breach notifications soared. Refocusing the paperless decision on environmental benefits encourages adoption, and it helps repair brand and reputational impact by engaging customers and their financial institutions in a mutually positive partnership for the environment. The positive image bump holds especially true for first movers.
It's good for your bottom line.
Switching customers from paper statements and checks to online statements and online check imaging generates significant cost savings. Paper-based processes are inefficient; they require paper, ink, postage, and handling costs that can easily reach $1 per statement. Banks can also improve top-line results through better targeted marketing at lower online costs, based upon more refined variables than are available with paper statements.
It's good for your customers.
For years, financial institutions have been emphasizing that clutter can be tamed by using online banking. Even more important are the security benefits associated with paperless banking. My firm has estimated (based on those consumers who know how their fraud was perpetrated) that the average person can cut his or her chance of suffering identity fraud by as much as 9% simply by shutting off paper statements and bills.
It's good for the environment.
U.S. Postal Service data show that the typical household sent or received an average of 26 bills, statements, and checks per month last year. By viewing and paying bills online, people not only reduce the amount of wood pulp, water, and energy that would otherwise be consumed in making paper but also divert waste from landfills and make a nearly effortless contribution to the environment.
Each ton of paper saved measurably cuts energy consumption, net greenhouse gas emissions, hazardous air pollutants, wastewater, solid waste, and wood consumption.
Upward of 50 environmental contaminants are associated with the paper and pulp industry. More than one-third of the waste sent to municipal landfills is paper, which, when broken down, creates methane, a major component of greenhouse gas.
If all U.S. households viewed and paid their bills online, each year this would:
Reduce fuel consumption by 26 million BTUs, enough energy to provide residential power to San Francisco for a year.It's easy.
Unlike the environmental awareness that requires curbing the use of conveniences or comforts, replacing paper with online transactions imposes no such tradeoff. Single sites that allow multiple statements to be viewed, paid, and archived make it easiest for people and businesses to stop using paper. Online billing and payment save time and money, are more secure, and produce significant benefits for water, land, and air.
Many people have never considered the environmental payoff for shutting off paper bills and statements, so reframing the decision in this way highlights a new way to improve our communities.
Paperless banking is a rare find; it makes sense for consumer and business customers, for financial institutions, and for our environment.
