Why banks need mobile messaging to complement their apps

Banking and finance app adoption has soared in recent years – with downloads up 75% between 2016 and 2018. And the COVID-19 pandemic will likely send these numbers even higher.

But there’s a fundamental problem banks need to look out for overconfidence in their customers’ acceptance of apps and app notifications.

CX leaders like Revolut in the US, or Starling and Monzo in the UK, haven’t fallen into that trap.

Despite the excellence of their banking apps, they offer SMS as an alternative notification option for customers.

Why? Because CX leaders let customers communicate on their own terms.

It’s important for every finance brand to realize that a digital transformation is taking place – but people are joining it at their own pace.

In the UK, fewer than one in ten people have gone “digital banking only” – and a quarter are still uncomfortable with digital banking in 2020.

In the US, less than half of baby boomers use mobile banking.

For those who are just using online banking rather than an app, SMS can be a crucial line of communication.

Let’s assume a customer has downloaded your finance app. They’re a regular user.

They’re on holiday and they make a purchase – or try to. The size of the purchase and the location flag it as a potentially fraudulent transaction. So you need to authenticate it.

But because they’re on holiday, your customer has their data turned off. So they won’t get an app notification until they’re back on the hotel WiFi.

Which is too late. You rejected the payment, just to be safe – and your customer had to endure an embarrassing situation in the market.

This is just one example where a simple SMS fallback message could have cut through and resolved things in a much more effective, empathetic way.

When you can’t rely on app notifications, SMS messaging is the obvious channel for urgent interactions like two-factor authentication and payment alerts. An overwhelming 98% of mobile messages are read – 90% within three minutes. Email open rates are nearer 20%.

But mobile messaging is much more than SMS. Apple Business Chat and RCS messaging for Android are the future of mobile messaging.

Your customers get video-rich, app-like experiences right in their messaging inbox – no need for an app download.

Rich messaging can be far easier to interact with than SMS. Instead of replying to a ‘press Y for yes’ message, they can tap a ‘Yes’ button.

Plus, you get the benefit of improved data collection via delivery receipts, read receipts, and engagement tracking.

Richer, branded messaging is great for trust and security too. Registration of RCS and Apple Business Chat channels is strictly controlled, making it nearly impossible for fraudsters to imitate your brand.

Automated mobile messaging isn’t a replacement for app notifications. It’s a complementary channel that helps you deliver great CX at scale.

We’ve created a mini-guide about the opportunity, and what you need to do to grab it. It’s got lots more messaging use cases for banking and finance, and it tells you what you need to take your messaging to the next level.