How Banks are Using SMS to Increase Convenience

OpenMarket – April 7, 2016

The banking industry has grown a lot in the 21st century. In particular, the development of mobile banking options has transformed the bank-client relationship. Along the way, it’s been interesting to watch how both national and local banks are leveraging SMS banking.

What is SMS Banking?

SMS Banking Defined

As the name suggests, SMS banking is a service that allows clients to access information from their financial institution via their mobile phone’s push and pull text features. Push messages refer to the messages that the bank sends to the client’s phone without request for the information, while pull messages are those that the client initiates by requesting certain information.

Both push and pull messages can be valuable for clients and their banking partners. Clients are able to determine which types of messages they want to sign up for and can always opt out of a particular service if they feel it’s unnecessary.

Here’s a little more information about both:

  1. Push Messages

An example of a push message would be a bank sending a client an SMS notification after a large amount was withdrawn from their account. This gives the client a timely warning, should the withdrawal be the result of fraud.

Other types of push messages include things like periodic account balancing reporting, successful payment of issued checks, insufficient funds notifications, password authentication, large payments on credit card balances, and other related notices.

  1. Pull Messages

An example of a pull message would be a client sending a text message to the bank asking for an update on their current account balance. The bank would then send an automated message back saying something like, “Your checking account balance is currently $975.36.”

Other types of pull messages include things like electronic bill payment, transfer between accounts, stop payment instructions, foreign currency exchange rate request, ATM card suspension, statement request, and more.

The State of Text Banking

Depending on which financial institution you ask, the role and value of text banking varies. Some look at it as a critically important core feature of their business model, while others view it as a beneficial, yet auxiliary component of client relations.

Tom Trebilcock, the vice president of mobile and payments at PNC Financial Services Group in Pittsburgh, falls into the former category. “There’d be a real gap in our capabilities if we didn’t offer it,” he firmly says.

Perhaps the most interesting thing about the current state of text banking is that both large financial institutions and small local banks are using it. The technology doesn’t correlate with size; it can be scaled accordingly. While large banks have been using it for years, smaller banks are learning that text banking can be an effective part of their own strategies.

The Key Benefits of Text Banking

For financial institutions on the outside looking in, everyone wants to know what the specific benefits of text banking are. Is it worth adding SMS to your current services? Well, consider the following key benefits and then make your decision.

  1. Convenience for Clients

Perhaps the biggest benefit of text banking is that it provides additional conveniences to clients. When a client can control things like transfers and balance inquiries straight from their mobile phone’s SMS platform, they’re able to streamline complicated tasks and focus on other important tasks in their personal life.

Convenience is a big deal when individuals are searching for a bank. People expect a bank to offer simple, yet safe services. If they have to go through a long, drawn-out process just to find out how much money is in their account, they’re going to take their business elsewhere. Text banking is only one aspect of offering convenience, but it’s an important one.

  1. Time Savings for Institutions

From the institution’s point of view, text banking is a significant time saving technology. Since the majority of phone calls and emails are associated with simple issues and tasks, there’s no reason for a bank to distract employees with these time-consuming tasks.

When clients are able to send a simple message and receive automated updates for their requests, this reduces call center volume and frees your customer service reps to focus on clients who are physically present in branch locations.

Ultimately, this ends up being a major cost-saving benefit, as institutions are able to better utilize their employees’ time on the job.

  1. Enhanced Customer Experience

Ask any individual who has used text banking about the underlying benefit of the technology, and most will tell you about how it significantly reduces frustration. Whether it’s a real-time notification that someone has withdrawn money from their checking account or the ability to verify account balances without logging into a cumbersome online account, text banking dramatically enhances the customer experience.

  1. Increased Loyalty

Finally, all of these factors lead to increased loyalty between clients and their banks. By offering convenient service and security, banks find it easier to facilitate relationships and build long-term client loyalty. This loyalty enhances customer lifetime value and enhances the institution’s chances of selling more products and services to clients over time. It’s a win-win situation for everyone involved.

Contact OpenMarket Today

As a bank or financial institution in 2016, you have to consider SMS and the role it could play in your organization. As more and more banks adopt this valuable technology, it’s becoming less optional and more of a requirement to stay competitive.

At OpenMarket, we understand the many demands and pain points that exist in the banking industry. Chief among these pain points is the need to build stronger relationships with clients and enhance trust. Text banking helps with both of these issues.

If you’re looking to take your bank to the next level, then consider establishing a relationship with OpenMarket. Our SMS messaging solutions can help you engage clients, decrease fraud, and deliver a better experience. Contact us today and we’d be happy to provide you with more information and strategic advice.


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