After a short but rocky history, banking alerts are poised to become a critical offering for any bank that hopes to attract new customers and retain busy ones. Clients today are connected and tech-savvy; they have an expectation for fast, reliable and secure online services. As consumers increasingly embrace online or mobile banking, banks that wish to retain and expand the customer base must offer related products such as alerts online.
Javelin Strategy and Research warned four years ago that despite growing consumer interest in alerts, their growth was not assured: "Bank and card issuers must continue to make alerts as easy to manage and cull as they are to initially activate. Products should be designed so that alerts don't become 'white noise.' "
Sure enough, two years later Forrester reported waning interest: Only 24% of online consumers of financial services used alerts. Fifty-three percent didn't want alerts for bank balances. And they didn't want to pay for alerts via SMS messages. Due largely to insufficient product design and value, alerts were becoming generic and being ignored, like statement inserts and unsolicited direct mail.
Step forward to today. Fiserv research concluded that online banking could get a boost from mobile alerts. More than a quarter of consumers questioned would welcome mobile alerts about billing, while more than half of them said getting the alerts would cause them to sign up for mobile access to their bills.
What has changed, and how can banks make the most of the opportunity?
Online banking evolved, developing new capabilities such as customized, personalized alerts that create positive, rich customer interactions. Mobile banking turned the corner, becoming increasingly popular among the industry's most attractive customer segments. And alerts themselves changed, becoming enriched, targeted and responsive to customer needs.
Now that no online strategy can be complete without an integrated alerts strategy some guiding rules are emerging:
Make it helpful. Alerts are about enriching the customer experience, not selling bank products. Certainly, tools that do what the customer needs may well lead to more financial activity or higher balances, but alerts have to be about what the customer already cares about.
Make it relevant. The most valued alerts will be those that provide the customer with education, guidance and advice. Clearly, it is a challenge for developers to pack a ton of information into a small package. But what is the point of an alert that customers ignore because of poor design?
Make it easy. "Easy" has a narrow meaning for online and mobile customers. "When I click on the link in your alert, don't make me search or keep clicking. If I'm both a business customer and a personal customer, anticipate what I will need and put it all in one place."
Make it personal. "When I respond to your alert don't make me recall the nickname you've given my account or my status in your customer hierarchy. You have an incredible amount of information about me right there at your fingertips. Show me you know me."
Make it consistent. "Don't make me wonder if I've left your site when the look and feel changes from one line of business to another. Don't give me one interface and process for my business bills and another set for my personal bills." And if standards have taken root among consumers, honor them.
Think outside the bank. Today's customers don't compare their online banking experience to ATMs or bank branches. They compare it to eBay, Facebook, LinkedIn, Amazon or their company's intranet, or scores of sites they use regularly for pleasure or work.
Executing an enterprise alerts strategy, like anything "enterprise," runs head on into the natural barriers posed by siloed lines of business, separate product pricing models, disparate and unintegrated systems, and blinkered views of customers.
But banks that take a dedicated, measured approach will find it worth their investment for these reasons.
Today's economic climate has made customers even more averse to fees they perceive as punitive. Alerts that help prevent them from crossing into fee territory are valued highly. Consumers are especially averse to late payments, now that their credit scores are more vulnerable to smaller infractions. There's real value in assuaging those concerns.
Alerts initiate customer activity that is valuable for the bank. A well-executed alert strategy enables customers to react to the event, such as transferring balances, or making payments.
These activities can either result in additional revenue for the bank or greater stickiness between customer and bank. As one banker put it: "Online is one-way customer communication. Alerts make it two-way."
Timely alerts reduce risk. They can avert fraudulent activity, creating a critical sense of security on the part of customers and a critical protection for the bank's assets and reputation.
Alerts are an essential feature of dynamic savings and budgeting tools that banks are creating to collaborate with customers.
