Riding the Wave of Financial Wellness Means Building Education, Community, and Trust
July 22, 2022 | 2 min read
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The convenience of online and mobile banking threatens to dilute the connection that financial institutions have with their customers, who are less likely to enter a branch and hold face-to-face conversations that position the FI as a trusted authority. Instead of being reactive and waiting for customers to come in, FIs have to be proactive and initiate daily conversations with their customers. In a February webinar Javelin made the case that mobile messaging is a way for banks and credit unions to cement their status as the customer’s primary FI and be their go-to option when that customer looks to open a new account or take out a loan. But it will require a change in the kind of messaging FIs employ. “What I see typically at banks and credit unions is alerting that is reporting someone’s status —confirming a transaction, telling that you’ve got a statement available. That’s a fine place to start but that’s not where we need to go,” said Mark Schwanhausser, Director of Omnichannel Financial Services at Javelin Strategy & Research. “Where we want to be going is to a point where we’re delivering advice or coaching or recommendations. Those are the kind of proactive conversations that can be powerful because they can position a bank or credit union in a place of trust.”
Javelin reports that mobile engagement adoption is growing. 40% of banking customers —85 million — received financial alerts in 2014. By 2019, the firm expects 52% — 126 million —will receive some combination of email, text and push alerts from their financial institutions.
While e-mails have the highest current adoption rate at 36%, there’s a high risk that they’ll be ignored or deleted. Only 22% of customers currently receive text alerts from their bank or credit union but text alerts carry a number of positives that could drive higher utilization. Nearly every consumer has a mobile device capable of receiving text alerts, customers respond quickly, can initiate conversations and it’s easier to verify receipt. At 14% penetration, push notifications face some steeper hurdles as customers must download apps, turn on notifications and develop the habit of monitoring them. Fraud alerts sent via push can struggle to stand out, reducing the usefulness of the channel. Putting aside the strengths and weaknesses of each option, Javelin encourages FIs to let the consumer decide which channel they want to use.
Some customer segments are more likely to take advantage of mobile messaging. A third of Moneyhawks®, wealthy, tech savvy customers coveted by FIs, receive all three types of alerts, with 55% receiving text alerts — well higher than the 22% figure across all customers. Moneyhawks® and Emergents, young, mobile savvy customers, both prefer to receive fraud alerts via text. Standing in contrast, 40% of Traditionalists — older online-centric customers — prefer to receive fraud alerts via email, with only 16% favoring fraud alerts via text. “There’s a real opportunity to be introducing online centric consumers to the benefits of mobile banking and benefit them as a consumer,” said Schwanhausser. “We’ll do that in part with things like security alerts and photo bill pay, which help them see a connection to the smartphone and their money.”
Among attendees of the Javelin webinar, 41% indicated that they primarily use mobile messaging for personal finance alerts, 36% favored fraud detection and prevention, and another 23% indicated primary usage for customer service. “I’m surprised that fraud detection isn’t #1 because that’s where we see most of the banks initially starting and consumers having a strong interest,” said Schwanhausser. “I do agree that the personal finance alerts are something that will have to be increasingly woven in here.”
Schwanhausser predicts that FIs will take the lead by moving beyond standard alerts such as balance updates and demonstrating to customers that they have their back, providing personalized messages mined from data about that customer. That in turn will set the stage for cross-sell and upsell opportunities. But FIs will have to provide useful advice before seeking to market to their customers. “We need to be moving into insight, moving into advice. If we can build that kind of relationship then I think we open the door to consumers who will say, ‘I see you’re looking out for my best interest and now you’re telling me about a product that happens to be timed to when I need this product,’” said Schwanhausser, suggesting that such data would be accumulated through aggregation. “I’m telling you about where my accounts are, what my goals are, you’re helping me understand progress toward these goals. You could be preapproving me for offers and putting that in my head as I bank with you. There’s a real opportunity for the marketing but if we do it wrong it will feel like spam.”
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