By Richard Manfredi on Feb 16, 2016 8:38:00 PM
According to the Millennial Disruption Index, banking is the industry most likely to be transformed by millennials (people born in the 1980s or 1990s.) One in three millennials surveyed said they were open to switching banks within 90 days and a similar amount believe they will no longer use a traditional bank within five years.
Millennials are rapidly turning to technology for their banking needs, as evidenced by increased reliance on apps and other digital solutions from companies such as Digit, Level Money, and Goodbudget. Traditional banks need to modernize their approach to attract and retain these customers, who are clearly open to these types of offerings. A 2014 survey by Accenture showed that 58 percent of millennials want their banks to let them know about financial products or services – 12 percent more than customers 55 or older. The challenge for banks is to provide millennials with digital options for connecting with their bank account that matches their preferences.
Text Messaging as a Touchless Digital Banking Solution
Text messaging is an effective solution to connect directly with millennials. Many banks offer text alerts triggered by events such as a low account balance or suspicious activity. In many cases, customers can also send a text to perform standard banking tasks including transferring funds, viewing their account balance, reviewing their most recent transactions or starting the process of reporting a lost or stolen card.
Text messaging is effective for the financial services industry because of its immediacy. Instead of having to open an app and navigate to various pages to perform banking tasks, users can accomplish the same tasks by texting a few characters to a dedicated number or by “opting in” to receive information about their accounts automatically. With text messaging, customers can manage their accounts in places without WiFi or 4G.Text messaging is a particularly powerful way to reach millennials who text frequently. A 2014 Gallup poll showed that text messaging is the dominant form of communication for Americans under 50, with 68 percent of people from 18-29 reporting that they text “a lot” each day. This behavior holds true for online banking, as a 2014 FICO survey showed that millennials prefer receiving text messages over mobile app notifications for bill payment reminders and notifications of suspicious charges.
Improving Customer Service Through Text Messaging
Banks and other financial institutions can use text messaging to improve customer support – particularly among millennials. Many customer care transactions can be handled automatically through mobile messaging. Migrating common customer care services to SMS is a “win-win” for banks and customers. Banks can reduce their expenditures on customer support while devoting more personnel to handling complex or sensitive customer care issues. This improves efficiency for banks and provides customers with a quick and easy way to get answers to basic questions and experience shorter wait times before speaking to a live agent.
Offering customer service through SMS speaks to how millennials want to communicate with businesses:
Mobile websites, email, apps and text messaging can help to fulfill the needs of individual customers in a myriad of ways, and financial institutions should explore the right mix of tools to deliver services to their customers. Text messaging can be a vital part of their mix of platforms – particularly with millennials who consider text a primary form of communications.
Few solutions offer the speed and intimacy of text messaging. Around 90% of all text messages get read within three minutes of delivery. Banks that find innovative ways to use text messaging – such as allowing customers to be placed into a queue via text and receive a call back from a support agent rather than waiting on hold – will have a distinct advantage with the powerful and influential generation of millennials.
The information included herein is distributed for informational use only; it does not constitute legal advice and should not be taken as such. All clients are responsible for meeting legal requirements and other rules that apply to their messaging programs. Consultation with legal counsel is strongly recommended.