Interactive Financial Alerts 2011: Using SMS and E-mail Alerts Bundles to Drive Profitable Banking Behaviors

Interactive Financial Alerts 2011
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Overview

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 e‐mail and text financial alerts climbed at a double‐digit 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?

 

Methodology:

This report is based mainly on data collected online from a random‐sample of 5,494 consumers in November 2010. Responses were collected and weighted. The survey is based on proportions of gender, age and income representative of the overall U.S. population. The margin of error is ±1.32% at the 95% confidence level.

Longitudinal comparisons are based on data collected online from random samples of:

  • 5,494 consumers in November 2010, with an overall margin of sampling error of ±1.32 percentage points at the 95% confidence level
  • 5,211 consumers in March 2010, with an overall margin of sampling error of ±1.36 percentage points at the 95% confidence level
  • 2,779 consumers in April 2009, with an overall margin of sampling error of ±1.86 percentage points at the 95% confidence level
  • 2,350 consumers in March 2008, with an overall margin of sampling error of ±2.02 percentage points at the 95% confidence level
  • 2,800 consumers in March 2007, with an overall margin of sampling error of ±1.85% at the 95% confidence level
  • In addition, Javelin’s five‐year forecast incorporates data from a survey of 3,100 mobile‐phone owners in July 2010, which was an online survey with a margin of error of ±1.76% at the 95% confidence level. The forecast also uses secondary data from public sources such as the U.S. Census Bureau and the Bureau of Labor Statistics.

    The analysis of Moneyhawks is based on data from respondents who received e‐mail or text alerts in the past 90 days.

    Companies Mentioned

    American Express

    Mint
    Apple Nordea Bank
    Bank of America RIM
    Chase USAA
    Citi Wells Fargo
    Facebook




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