SMS Marketing in the Banking and Financial Services Industry
Nowadays a company’s ability to connect with its customers efficiently by providing an outstanding user experience is one of the most important and essential factors of business success. Financial services have become a necessity, and customers want to get the best service out there. With a dense competitive environment, banks and financial institutions have a tough mission to stand out from the crowd. One of the fastest-growing methods of standing out from the pool of competition in the banking and financial sector is SMS marketing.
SMS is one of the most powerful direct response marketing channels available on this day and age, which is why it has been a growing trend among financial institutions as well. The reason behind this is that SMS is a quick and effective way to deliver clear and concise messages to recipients. This is especially crucial in case of anything finance-related. These matters are usually of great importance and, sometimes, urgency. Moreover, SMS is easy to track and can be easily verified for quality assurance.
There are many ways banks and financial institutions can utilize SMS marketing for customer care or promotional purposes. These include sending out alerts, reminders, allowing customers to monitor their accounts and transactions without lines at the bank, remotely, etc. Here are more detailed examples of how SMS marketing is best used by banks and financial institutions:
SMS Mobile Banking
With the use of SMS technology, businesses in the banking industry have an option to provide services on the go, which is very user-friendly and convenient for customers. SMS banking is quite quick and efficient, very simple to use, and, most importantly, doesn’t require a smartphone or active internet connection. SMS banking enables customers to make quick adjustments to their bank accounts without having to call, go online, or wait in lines at their local banks, which significantly simplifies their life and saves time. All the customers need to use mobile banking is to send simple codes from their mobile device to a designated number provided by the bank, from which they can receive messages as well. Mobile banking has certain advantages for banks as well. With an automated system, it's much easier to manage higher volume of traffic and customers, than it would be possible to do live, or via phone. Due to multiple layers of authentication, mobile banking helps to ensure security standards are met properly.
SMS Marketing Uses Cases For Banks Mobile banking is a great way to occasionally manage administrative tasks on the go efficiently. This is especially convenient for small or midsize business owners, as mobile banking saves so much time.
There is a range of information that can be accessed through mobile banking and actions an account holder can perform without having to visit a bank, go online or make a call. All this can be done quickly and efficiently, by sending out simple messages. By using mobile banking customers can do the following through shortcode commands:
- Check their account balances, on all sorts of accounts
- Check their transaction history
- Check bill payments that are due
- Transfer funds to designated accounts
- Get information about the location of a nearby branch or ATM
One of the ways SMS transforms into an essential tool for companies operating in the banking and financial industries to build better and stronger customer relationships - while avoiding loan defaults, is sending SMS reminders. SMS reminders are a fast and effective way to remind customers when their bill is overdue, or when they have unpaid transactions. Informing the customers efficiently is great both for the banks and the customers since the banks are more likely to get loan payments in time and the customers are less likely to have additional fees piling up for being late. Besides this, SMS payment reminders have an option of personalization, which means that banks and financial institutions can incorporate an email address or a contact number to directly discuss any arising payment issues with the customer.
Another way that SMS can be used effectively, and for an important cause, are confirmations (payments, adjustments to accounts, etc). The customers have requested confirmation for completing a deposit or a purchase through a credit card. This is crucial in the modern age of cybercriminals and helps to protect customer’s interests, their money, and information. By ensuring that the customer is protected, asking for a payment confirmation via SMS, banks can build a trusting relationship with their clients and make them feel cared for.
As customers are becoming increasingly demanding about online security, especially online banking security, two-factor authentication is one of the most common and secure ways to ensure the customers are protected. Essentially, two-factor authentication is made to ensure that the customer is in actuality the person logging into their account. A great way to incorporate two-factor authentication in the security package is to implement it through SMS. This adds a layer of security for the customers as, once again, SMS is a very quick and effective way to reach out to them. There are other ways to perform two-factor authentication (such as using fingerprints or security questions), however, SMS is especially convenient both for the banks and the customers, since it doesn’t require any advanced technology, smartphones or much time.
Real-Time Payment Notifications
One of the main concerns of any customer of any bank is the safety of their funds, accounts, and information. As a quick and easy way to pass a message through, SMS is very handy for handling time-sensitive, important information. Banks use SMS to reduce fraud and alert the customers of any suspicious activity on their accounts. Real-time payment notifications ensure that customers are aware of all the activities on their accounts and can immediately take action, if something doesn’t seem right. These notifications also usually include automated alerts about ATM cash withdrawals, as well as negative or minimum balances. Notifications like this help to build a trusting and strong relationship with customers and, once again, make them feel safe.
Key Advantages of Text Messaging for Banks
SMS has many advantages for banks and financial institutions, both from the service provider’s and the customer’s perspective. SMS is a marketing channel that offers a whopping 98% open rate and 36% CTR, with 75% of customers prefer to receive text messages over any other communication. Besides these, there are some of the key benefits to keep in mind:
Directly Tracking Account Activity
Since it’s a matter of great importance, customers always look for the most reliable and effective way of receiving banking notifications. And, SMS is known for its high open rates, meaning that the customers are most likely to receive a notification containing the information they need on time and actually see the notification. SMS can include all sorts of information, as discussed above. Alerts, application updates, transaction notifications, information about balance and many other types of important information can all be sent to the customers directly through SMS. This ensures that customers are always able to monitor their accounts, are informed and up to date on their due dates. In other words, SMS can be turned into a record-keeping platform between the financial institutions and their clients.
Using SMS marketing services can help banks and financial institutions not only to develop a stronger and more intimate relationship with their clients but also maintain a high level of security, a crucial factor in customer care in such industries. This can be easily achieved both through payment notifications and confirmations via SMS, but also, as described above, through two-factor verification to protect each customer’s information and funs. Customers who receive such a level of security and feel that their bank or financial service provider prioritizes their interests and security are more likely to be satisfied with the provided service and have a higher level of communication with the financial service providers than it would be achievable without incorporating SMS.
Increased Customer Loyalty, Engagement and Satisfaction
With the feeling of security and satisfaction comes customer loyalty. A simple text notification that warns a customer about a low-balance, or a payment that is due, which they may have forgotten about creates a bond between the financial service providers and customers like nothing else. Sending an SMS about a suspicious transaction, which can save a customer from fraud, pays off in that the customer will be more trusting and loyal to the bank/ financial institution, and likely be more open to receiving targeted promotions. Humans are creatures of habit, and once they find something (in this case – a service) they can trust and which is convenient to them, they are very likely to stick around for a long time.
SMS as an Innovative Channel to Promote New Deals and Services
Once the bond with the customers is created, SMS is also a great way to promote new deals and services. Whether it’s a special offer or a new feature, SMS is an ideal way to pass the message through and reach a wider audience. And if there is a strong relationship between the customers and the financial services provider, the customers will be more interested in receiving such offers via SMS, and thus, will be more engaged, which can drive the conversion rate up.
Examples of Text Messages for Financial Services
Received payment notification
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