While financial institutions and billers have saved $2.2 billion since 2010 by turning off paper statements, a surprising number of consumers are hesitant to switch to digital. Javelin's recent study, "Paperless Banking and Billing 2015: Closing The Digital Commitment Gap," found that consumers pay 72 percent of their bills through digital channels but only 39 percent of their bill statements are delivered digitally. And while 83 percent of checking accounts are now accessed online, only 58 percent of checking account statements are received digitally. Double dipping — the practice of consumers receiving both digital and paper statements — has also increased from 20 to 24 percent since 2010.
"There's this gap where people feel they can use online and mobile banking, alerts and online bill pay ... but they still don't have this commitment to the entire online lifestyle by turning off paper," said Javelin research specialist Ian Benton during a September 3 webinar reviewing the study's findings. "They still feel the need to have that coming into their mailbox."
For a myriad of reasons consumers remain reluctant to turn off paper statements. Many worry about losing access to statements if they switch banks and not being able to access older statements online. Some note that FIs have made it too complicated for them to shut off paper. But Javelin also notes that it's up to banks and credit unions to convey the advantages of a digital lifestyle, not just assume that consumers will buy in. "Let's make sure they understand what's in it for them and what's better about this digital lifestyle. One of those things is that you're in a much stronger position to fight fraud if you're digitally engaged and using alerts. Rather than waiting for your monthly statement to come in the mail, be involved with it. Let's focus on how digital monitoring puts them on top of it," said Mark Schwanhausser, Javelin's Director of Omnichannel Financial Services.
Across FIs Javelin estimates that the cost for delivering one paper statement is 50 cents (88-90 percent of which is postage), while digital delivery costs about 5 cents. While turning off paper statements cuts into the costs of printing, postage and processing, the ROI for FIs and billers goes beyond these savings. Javelin notes that digital statements are typically accompanied by an uptick in digital payments, which are less costly to process and reduce the burden on call centers. A Javelin poll of FIs found that cost savings are still the main driver in pushing adoption of digital statements:
Back in the late 2000s FIs led with a green message, appealing to consumers who wished to demonstrate environmental consciousness by turning off paper. Sovereign Bancorp embedded wildflower seeds in direct mail solicitations — printed on recycled paper — so they could be planted in the ground. But now the marketing message has switched to the convenience of digital, or as Schwanhausser puts it, "Making transactions easy, enabling people to do it on any device."
But FIs will have to do even more to drive consumers to digital banking, as many fail to see how it presents any meaningful upgrade in terms of functionality. "How do I stretch my paycheck, save so I can weather a financial shock? Which of my debts should I pay off first? Financial institutions wants to be in that proactive position of helping the consumer through their daily lives," said Schwanhausser, mentioning some of the core features of digital money management.
To learn more about what financial institutions can do improve the digital experience, and drive consumers to more fully utilize that channel see our digital money management white paper.