Michael Wright, founder and CEO of global paperless communication specialist, Striata
Just 20 years ago, if a bank wanted to communicate with high-volumes of customers or vice versa, there were only two options: mail or telephone.
Today, there are myriad communication technologies available at the touch of a button: from websites to email, social media to secure messaging, we can access communications any time, any place and via a whole range of digital devices.
According to ‘The Outlook for UK Mail Volumes to 2023’, a Royal Mail commissioned report from PWC, transactional mail declined by just 4.5 per cent between 2005 and 2012, despite digital technology making communication quicker and more efficient.
With 25 per cent of transactional mail in the UK sent by the top five banks and other financial services companies accounting for a further 10 per cent, the sector as a whole needs to consider why customers are reluctant to take up these new technologies, with all the speed, convenience, cost and environmental benefits they offer.
Though paperless current accounts are now 40 per cent of the total, statements constitute roughly half of all mail sent by banks.
Royal Mail’s report found that 34 per cent of consumers who receive financial statements by post do so as an official record and that concern over security prevented a further 42 per cent of consumers from using internet banking at all.
To accommodate customers’ desire to keep records, banks need to make statements and correspondence accessible to customers for the long term and where that is already the case, they must make customers aware of the online resources available to them. Sending the statements as a secure attachment to an email is a simple way to achieve this.
At the same time, with 55 per cent of consumers who receive online financial statements saying convenience was the main reason for stopping paper, banks should emphasise the ease and additional benefits of going paperless with email statements. Sharing experiences from customers who have already made the switch could be one way to do this. Emphasising the value added features such as interactivity and analytics are also good ideas.
They also need to do more to raise awareness of the robust security measures in place to protect customers’ accounts and data – in the US, the Federal Reserve’s ‘Consumers and Mobile Financial Services Report 2015’ found that 62 per cent of consumers cited concerns about security as the reason they don’t use mobile banking.
But beyond accommodating customers’ needs and allaying their fears, banks need to look at the actual process of switching customers from analogue to digital communications and find ways to make it faster, easier and more appealing.
As consumers, we’re slow to commit to decisions about things that we don’t perceive to be urgent and one of the barriers to customers adopting paperless statements is the physical act of ticking a permission box.
Studies have shown that having to opt-in by ticking a box can negatively impact the number of people who will decide to act, with opt-out requests proving more effective than opt-in requests.
If customers have to spend time following links or updating their details, they will often choose to ignore requests to turn off paper statements altogether.
Banks need to rethink the methodology, the execution and even the copy they use to try to get consent from customers to move from paper to email statements.
It should only take one click, but instructing customers to ‘click here’ or ‘follow this link’ is unlikely to lead to positive action. More descriptive phrases, such as ‘Yes, I want email’, are more persuasive and obtain better results.
Asking customers to make a choice, not a decision, is also key in convincing them to act. If customers are asked to choose between ‘Yes, I want to save paper’ and ‘No, I want to keep paper statements’ they are likely to select one of the options, rather than postpone making a decision and potentially forget about it all together.
There are many steps banks can take to encourage better digital take up among customers and successful digital adoption strategies will see banks reap the benefits financially and, more importantly, in terms of customer experience and satisfaction.
Email statements are also a key stepping stone to a fully digital (and profitable) banking relationship.