SITD? RSN Yr POV on TXT MSG z GONNA B Changed (FWIW)

“Cell phones are the latest invention in rudeness.”  – D.H. Mondfleur

For anybody that blinked a few times at today’s title, get ready – you’re looking at the new shorthand and slang your employees may need to use with customers a lot faster than you think.

There are some very basic truths banks have learned when it comes to new customer banking channels:

1. The adoption rate for every new channel is faster than for the previous one.
2. Customers don’t care how good a bank’s integrated channel delivery strategy vision or design is. They flock to anything that’s easy to use. There is no logical reason that more Americans have a PayPal account than use Internet banking except that it was so stinkin’ easy to sign up for it on eBay.
3. Banks are not going to guide customers to channels. Instead they need to react fast to incorporate those channels into their delivery strategy.
4. In my opinion, the channels and tools that people are using now for social interactions are the very same tools that they will want to use to do business.

The latest example of this your author humbly submits is the cell phone and text messaging. The last thing any bank technology committee wants to hear right now is that there’s another investment looming that may not yet be in the budget – but, well, there probably is.

First, some background. While banks have been busy building branches and expanding Internet banking capabilities, there is a staggering growth in the adoption of mobile phones and text messaging that can’t be ignored. Consider the following:

• There are now 229 million mobile phone subscribers in the United States.
• More Americans have access to mobile phones than have access to the Internet – over 80% use mobile phones compared to 69% that have computer access to the Web.
• Over 80% of all cell phones are text-enabled. That number is expected to surpass 90% in a year.
• 40% of mobile phone users already actively use text messaging (80% ages 13-24, 63% ages 18-27, 31% ages 28-39, 18% ages 40-49). Man, can you say “mainstream”?
• 44% of people under 20 (our kids) already consider texting to be their primary communications tool, not email. It is absolutely amazing to think that email may already be starting to enter an obsolescence stage with a large number of Americans.
• There are 6 billion text messages sent every month in the United States. That’s already twice the number of emails (if you don’t count spam). Put another way, the average text user sends 66 messages a month.
• These users of text have already developed a 21st century shorthand (well, actually a morphed-up language of shorthand, slang and symbols) that is used to efficiently communicate recurring words or phrases, and it is growing by leaps and bounds. The title of this article is a fairly simple example. (GonzoBanker compiled a TXT MSG shorthand dictionary for those of you that need help interpreting the title.

The commercial possibilities are not being ignored. Some non-bank examples include Borders, which has started offering snippets of books to cell phone clients and a 10% discount if they buy immediately and pick up the book at their favorite store. USA today is providing certain sections of the daily paper – weather, sports scores – downloaded to the phone. And, by the way, blue-staters can soon expect a request for campaign contributions from none other then Hillary Clinton.

As for banks? Virtually every national bank and some mid-size and community banks have a pilot in place and are carefully tracking results.

One focus is use of cell phones as the Internet banking device, i.e. Internet banking on that itty-bitty screen.

• Bank of America and Wachovia both offer a browser-based service that is basically a simplified version of the online banking site. Customers that have Internet access on their cell phones can access the bank’s URL.
• Citi Mobile, by contrast, is a downloadable application. Customers need to log on to Citibank on their computers and download software to their cell phones. The application then resides on the phone going forward.
• And the latest wow factor, the Apple iPhone, has a full-blown Web browser like that on a customer’s home computer, so they can do online banking even if their bank hasn’t done squat with the whole mobile idea.

The second focus is customizable messages to customers. Citibank, for one, already has customizable email and wireless alerts (low balance, deposit received, payment due) that can be characterized as “event driven” correspondence. Over time, this will become more customizable by individual users.

Third, many banks, primarily via their call centers, are already determining how text messages will be queued and handled if text is the preferred method of communication.

So, there’s plenty of early action on the mobile front. That said, there are two major issues that need to be addressed before customers take it mainstream:

The first is (no surprise) customer concerns over security. This is being addressed in three ways by early players:

1. PIN identification
2. No personal data, including account numbers, is stored on the phone
3. 128-bit encryption 

A cell phone virus can potentially get around these measures, but no reports of this have surfaced yet.

The second issue is cost, at least for mobile banking and notices. Unless we oldsters learn fast about unlimited text messages for a fixed monthly fee, we’ll learn about per-message fees the phone companies can charge. The added usage or base fee charges may be a turn-off for people new to text messaging.

That said, it’s time to get ready for whatever may transpire with customers and cell phones. Within the next 1-3 years, that might include:

• Articulating a strategy for customer cell phone access to banking services. A pilot using employees could be an interesting first step.
• A pilot that proactively pushes event-driven messages such as “deposit received” or “payment due” to customers (note: the first bank that will notify me and my first-year college student daughter whenever her checking account goes under $25 gets my business)
• Allowing customers to customize and personalize their text messages
• A simple push marketing campaign
• A call center plan and pilot that handles text messages in the same queues and with similar service levels as voice calls. Another piece of this might be incorporating some branches/branch employees in text communications with key customers who see it as their primary vehicle.
• A “text to person” strategy that allows text users to quickly and easily transfer to a human if the need or inclination arises

To summarize:

• More cell phone users than Internet
• Fast adoption of texting
• Access any time the phone is turned on
• Ease of use
• Fast migration to transaction capability

It’s time to start talking about this if you aren’t already.
-tr

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