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Interactive Financial Alerts 2011: Using SMS and E-mail Alerts Bundles to Drive Profitable Banking Behaviors
Javelin Strategy & Research, March 2011, Pages: 48
Financial alerts have the potential to serve as a customer’s nervous system for checking and savings accounts, credit cards, bill pay, investments, loans, collections, fraud prevention, customer service and more. They also can improve how customers monitor and control every important aspect of their finances. Javelin consumer survey data indicates that adoption of email and text financial alerts climbed at a doubledigit pace in 2010 and that nearly half of households will receive alerts by 2015.
But the potential of alerts to become more widely used is hobbled because financial institutions and technology vendors think too narrowly about them and serve up alerts that are flawed in seven significant ways. (The report critiques examples from American Express, Bank of America, Chase, Citi, Mint, USAA and Wells Fargo.) In addition to examining the use of alerts, this report explores the return on investment (ROI) from leveraging their potential. The ROI starts with annual servicing costs that are $19 less per regular alerts recipient, dubbed a Moneyhawk, than those for consumers overall. But the report also builds the business case for five types of alerts bundles, including four that could generate new revenues from convenience fees, subscription fees and revenue-sharing with merchants.
Primary Questions
- Is adoption of financial alerts increasing?
- How fast will adoption of alerts in general — and e-mail and text alerts specifically — grow over the next five years?
- Who receives alerts on a regular basis, and why should banks covet these recipients?
- Are alerts recipients less costly to serve?
- Will Americans pay for alerts?
- What’s wrong with today’s alerts?
- What can financial institutions do to boost adoption and make alerts more valuable?
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