Use interactive alerts to achieve profits, build customer loyalty
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- Written by Super User
Financial institutions can achieve cost savings and revenue benefits through the smart use of interactive alerts, according to a report by Javelin Strategy and Research.
The firm identified a key customer segment—“Moneyhawks”—who prefer to receive alerts on a regular basis and comprise 27% of consumers who have received an email or text alert in the previous quarter. Javelin compared the banking behaviors of Moneyhawks to non-Moneyhawks and conducted an ROI analysis of alerts and examined savings from cutting costs.
Javelin notes that alerts used correctly can reduce operating costs dramatically. However, alerts done poorly will increase costs for financial institutions and frustrate their customers. Alerts that are unclear or ill-timed, for example, not only create confusion but also lead customers to use more costly channels such as call centers.
It found that FIs can save $868 million in servicing costs by using alerts to direct customers to more cost-effective channels such as online and mobile banking, as Moneyhawks more frequently use these channels to make balance inquiries, pay bills, and transfer money. If FIs use alerts to reduce the volume of CSR calls from Moneyhawks by 25%, the CSR expense would drop by $429 million.
“Well-executed interactive financial alerts offer huge benefits to consumers, as well as FIs,” said Mark Schwanhausser, senior analyst, Multi-Channel Financial Services at Javelin. “Alerts are important personal finance management tools that help consumers manage and track every aspect of their finances, including credit card purchases, fraud detection and prevention, and bill pay. Our research forecasts that adoption of alerts will grow at higher rates than in recent years: 45% of U.S. adults—or 93 million—will receive financial alerts on their personal computers, smartphones, mobile phones and tablets by 2015, representing a 6% CAGR and a real opportunity for FIs to build customer loyalty.”
For more information:
https://www.javelinstrategy.com/news/1219/92/Attention-Financial-Institutions-Use-Interactive-Alerts-to-Achieve-Profits-Build-Customer-Loyalty/d,pressRoomDetail
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