How texting could transform bank services

How texting could transform bank services
By Peter Tanner, managing director of Boomerang SMS Solutions

Published: November 12 2009 17:48 | Last updated: November 12 2009 17:48

Growing numbers of banks and financial institutions are adopting text messaging as part of a raft of measures designed to improve customer communication, enhance service levels and attain competitive advantage.

However, the constraints of traditional text technology have limited the range of services that can be delivered to customers.

But using an auditable, two-way texting solution will enable banks to transform the relevance and quality of their customer service, from ordering new cheque books to checking transaction patterns in a bid to reduce the impact of fraud.

Critically, I believe that by integrating this solution into core banking applications, workflow can be automated, significantly reducing costs by removing the need for manual intervention.

Financial institutions are looking to transform customer interaction with new innovative services and a wider range of communication options. For these institutions, however, economic pressures dictate that such services must be delivered without big investment or ongoing costs. The delivery method must also be simple and widely available to ensure banks can reach as many customers as possible.

As a result, growing numbers of banks recognise that investing in SMS offers excellent value, while enhancing the quality of the service provided. Quick, simple and used by the vast majority of customers, SMS is a useful tool to update customers on account balance, for example, or raise an alert for unusual transaction patterns.

However, this method of communication is still one dimensional: traditional SMS technologies do not enable a customer’s reply to trigger action. If there is a problem that demands a response from the customer, such as confirming if a transaction is fraudulent, the bank will be burdened by the time and cost associated with manually handling that customer response, whether at the call centre or in branch.

Next generation technology, however, can guarantee that multiple outbound messages are specifically matched with their appropriate response. This is key, as it enables banks to integrate SMS reliably into their workflow processes, transforming the potential range and nature of services available to customers

Automating the production of texts, just as standard letters are produced today, and triggering database actions on the basis of a customer SMS response eliminates the need for manual intervention at local branches or the call centre, greatly reducing the administrative burden.

For example, a bank sends a text to a customer reporting a suspicious transaction and the customer’s response is automatically recognised by the core software. If the customer responds “Yes” to the question: “Is this transaction genuine?” the system will process the transaction as usual. If the response is ”No”, the database will suspend the account and move automatically into its anti-fraud process.

Critically, as long as there is no problem, the bank will need to undertake no manual administrative process: the entire process is handled automatically by the system, providing a quicker, more efficient and less costly means of communicating with the customer.

With 80 per cent of texts being received within 60 seconds, this full circle texting technology provides the fastest way to communicate efficiently with customers.

Critically, these messages are inherently secure; texts are extremely hard to intercept and, in the unlikely event that a phone is stolen, actions such as money transfers can be additionally secured via the use of variable PIN codes.

Fears of mobile phishing can also be allayed through the use of specific text number ranges by the bank and supported by additional personal information.

For customers, the appeal of a two-way text solution is clear. Information from the bank is instantly retrieved irrespective of location and where a response can be made by SMS, the inconvenience of a lengthy phone call or branch visit is avoided.

The two-way approach also enables customers to access a range of services offered by the banks, starting perhaps with simple options such as a text-based chequebook ordering process.

Indeed, further down the line customers may well be willing to pay for some of these more sophisticated services, such as potential fraud alerts or notification of nearing overdraft limits.

For the customer travelling abroad, the fact that the bank raises a text-based alert of an overseas transaction provides a high level of confidence. The ability to respond via text confirming that the transaction is genuine, in seconds, removes the risk of the account being suspended which is an inconvenient by-product of today’s transaction tracking technology.

If the transaction is fraudulent, the immediacy of the communication and the automation with core systems to suspend the account boosts customer confidence while also minimising their exposure to financial distress.

Indeed, the provision of real time transaction information via text improves confidence in the quality of service and enables the customer to take control. It can also be applied to a range of financial services. From loan applications to insurance policy renewals, as well as the added value services increasingly being offered by card providers such as booking flights, financial institutions can empower customers to take control of their finances.

Those financial services organisations that have already embraced texting to improve customer services are providing better, more immediate information. But the next generation of texting technology enables banks to transform the quality and immediacy of these services.

Critically, by fully integrating this technology into core applications, this transformation in service and communication can be achieved while also streamlining processes, increasing automation and driving down manual intervention to achieve significant cost benefits.

By closing the loop with two way SMS communication, tightly integrated with core systems, financial institutions can improve customer service while also driving down administration overheads and reducing the financial and personal impact of fraudulent transactions both on the institution and the customer.

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