Op Ed: When Push (notifications) Comes to Shove

by Michael Nuciforo

Michael Nuciforo is a Mobile Banking Consultant at Keatan. He previously worked at ANZ on a number of developments, including goMoney, and more recently managed the UK retail portfolio as Head of Mobile Banking at RBS.


imageOne of the last relics from the dawn of mobile banking, SMS alerts, is fast approaching the end of its use-by date. The service has become a victim of its own success: Consumers embraced the ability to be informed, and costs have risen exorbitantly. SMS alerts were the first tentative steps that most banks took in delivering mobile services. They have now been pushed aside, quite literally, by their younger, more attractive successor – push notifications. The move from SMS to push shouldn’t just be about saving money, however. It’s an opportunity for banks to engage customers in a much more effective fashion.

It is almost impossible to find a bank that doesn’t offer some form of SMS bank alerts. It was easy to deploy, simple to set up for customers, and the costs were negligible (at least in the beginning). Most banks forecast low usage so they did not pass along the cost to consumers. Banks signed pay-per-alert contracts with suppliers that in hindsight were the wrong choice. It was the information age, but banks completely underestimated customers’ insatiable desire to stay informed. Alert volumes grew and grew and the pay-per-alert model suddenly wasn’t so attractive. It was also costing the bank overdue/overdraft fees because customers were more financially informed.

The success of SMS alerts laid the path for the future investment in mobile apps. It validated the long held belief that consumers would adopt mobile banking in droves. As the mobile channel has matured, banks have started to evaluate what worked and what didn’t. At the same time as SMS costs were becoming a concern, push notifications started to hit the mainstream. The pupil was challenging the teacher.

Push notifications are a native capability most prevalently used on Apple’s iOS platform. Push has become so popular that almost every new application asks you to accept their use upon download. They are free and operationally much cheaper to maintain than SMS. Cost reduction, however, is only the beginning of the story. The ability to engage customers at a different level is the main benefit push notifications offer banks. Push allows developers to integrate a notification message deeply into a follow-up activity on an app. This means a consumer can complete an action directly from an alert. There is no copy and paste, selecting links or opening an app. It’s all tied together. Information can be sent, and a customer can act with the tap of a button.

Push notification allows banks to move away from being a one-way communication channel. It allows banks to take advantage of the opportunity to be proactive and engage customers about what is important to them. Customers can move beyond receiving alerts about balances or transactions. Instead, banks can start telling the customer what they should do with their money. I can imagine the day when my rent is due, and if I don’t have enough in my current/checking account, I get sent a push notification asking whether the bank can transfer the necessary amount from savings. I click accept and see the confirmation screen within the app. Problem solved.

The great thing about push is that the business case writes itself. Cut costs and do something more effectively = instant business case-approval. There will be an initial implementation fee, and ongoing management, but beyond that, it’s free, nada, zero. Think about that. Your future most-powerful communications channel is broadly free. Click-through rates on push are higher than traditional channels and messages can be sent in the context of your customer’s situation, location, time and even weather. It can also be used by all parts of the bank, including products, security and insurance.

When push comes to shove, the move away from SMS reflects the broader change required throughout the banking industry. Banking needs to evolve away from just being a set of customer-initiated activities. Banks need to be proactive and do the banking for the customer. Push notifications deliver a simple a contextual banking experience that lifts the mobile banking channel from being useful to indispensable.

Piggymojo Hooks up with Brooklyn FCU to Power "Impulse Savings"

imageLast June, we wrote about Piggymojo’s unique “impulse saving” tool designed to help couples motivate each other to save (previous post). Basically, you text your spouse when you save cash during the day, e.g., drinking the company’s free swill instead of trekking to Starbucks.

The concept is great, but it needs direct integration to financial accounts so those “virtual saves” are translated into actual dollars sitting in a savings account.

imageToday, the Brooklyn-based startup announced the first financial institution integration with Brooklyn Cooperative Federal Credit Union. The program is being funded in part with a $300,000 CFSI grant to gauge whether the program helps lower-income members to increase their savings (press release). Four other projects shared in the $1.5 million total grant (details). 

Weekly summary of savings activity via Piggymojo (7 March 2011)

Weekly summary of savings activity via Piggymojo (7 March 2011)

Longer-term tracking

Longer-term tracking at piggymojo


Note: For more info, see our Online Banking Report, where we wrote in late 2008 about various ways to leverage your online/mobile channel to boost deposits (here).

The 49% Text Banking Gap

image Quick. What comes to mind when you envision mobile banking? I’m guessing most of you pictured a mobile website or shiny new app running on a recent iPhone, Blackberry, Android or other smartphone.

And if mobile banking was used only by techies, that would be about right. But banking is used by just about everyone, and everyone still doesn’t have a smartphone and Internet data plan.

According to the latest study out of Pew Internet (note 1), 82% of U.S. adults have a cell phone (and another 6% of the total live in a household where someone else owns one). And 72% of those cell phone owners use text messaging while only 38% access the Internet through their phone.

And only 60% of the mobile-Internet users, or 23% of all cell phone users, are frequent users, accessing the Internet 3 or more times per week (note 2). 

So the text-banking gap is 49% (72 less 23) or half of all cell phone users. Those are the people that use text messaging but do not regularly access the Internet through their phones. Another way to think of it, the non-Internet-using segment is more than twice the size of the mobile-Internet-using group. Or more simply, text users outnumber (frequent) mobile Internet users 3 to 1. 

Bottom line: Don’t overlook the mainstream text-message group for both alerts and balance inquiries. And make sure your marketing and educational material speaks to the sizable segment that could care less about your new iPhone app and just wants to know how to txt for their bal. 

1. Adult data compiled via telephone interviews in May 2010. N = 2,252. Teen data is from a year ago in a telephone survey of 800 teens (age 12-17) fielded June through Sept. 2009.
image2. In comparison, text-message usage is crazy high (see eMarketer graph of the Pew Internet data inset). According to the Pew data, adult (18+) text-message users send/receive almost 40 text messages a day. Of course, that’s nothing compared to the thumb-weary, under-18 crowd who send/receive an average of 110 messages per day. Side note: The wording on the question asks for the number of messages sent AND received, so one exchange, text out and reply back, should only count as one message. But I’m guessing respondents are thinking of this more as “sent OR received” so that each exchange counts as two messages. I also suspect the kids are over-estimating their usage quite a bit, wanting to wow the researchers with their uber-connectedness. But the bottom line is the same: Teens have embraced texting, and adults have caught the bug as well.   
3. For more info on mobile banking, see our mobile banking series in Online Banking Report.

Citibank Adds Text Banking to its Mobile Lineup

image With today’s launch from Citibank (press release), the big four U.S. banks now all support text banking (Bank of America, Chase, Citibank, and Wells Fargo) (see note 1).

With these four giants on board, text banking turns into table stakes going forward, i.e., a must-have feature. Those without it have a tangible deficiency that will cost them customers, especially in the heavy-texting youth market.

The Citibank service is read-only offering Bal, Stmt, and Hist commands sent to its shortcode MyCiti (692484) (see second screenshot for command list). It also includes the all-important Stop function to turn off all text messages and alerts. Chase Bank recently became the first major U.S. bank to offer text-based funds transfers.

Citibank isn’t making a big deal of the new option on its website. The text option is now positioned on the mobile page with equal billing with the bank’s iPhone and (other) smartphone options (see first screenshot below).

Citibank mobile landing page (link, 22 June 2010)

Citibank mobile landing page

Text banking page (link)

Citibank text banking page

1. Update June 23: While BofA and Citi added text banking this year, Wells
and Chase have offered it since 2007.
2. For more on mobile banking and payments, see the most recent issue from Online Banking Report.

Best of Web: Chase Launches Instant Action 2-Way Text Alerts

imageobr_bestofweb It’s been 13 years since email bank-account alerts first appeared in the United States (see note 1). And for 12.99 years, users have wished they could just reply back to the message to cover a checking account shortfall. 

Well finally, Chase Bank has delivered on that promise with real-time Chase Instant Action Alerts:

image    image

Chase account holders now receive real-time text-message alerts when their account drops below preset minimums. Customers can initiate funds transfers by texting back transfer instructions. Currently, transfers can be initiated only via text message.

While we would have been more impressed if the service covered the more common email alerts, the new feature does move the online/mobile banking state-of-the-art up a notch. That’s enough to earn Chase the second OBR Best of the Web awarded in 2010 and the 77th all-time (notes 2, 3).

The bank is promoting the new feature via Google AdWords (see screenshots below). And, they’ve done a good job identifying the key benefit in the landing page title:

Avoid Overdrafts | Chase Instant Action Alerts

I don’t see any mention of the new capabilities on the Chase homepage today, nor does it appear to be touted within online banking (note 4). However, a site-search for “alerts” drives users to the landing page shown below.

Advertising on Google search for “Chase email alerts”
(2 June 2010, 9 AM from Seattle IP)


Landing page (link)
Note: The top graphic is animated, showing how the alert and reply work (see images at the top of this post)


image 1. Signet Bank was the first major to offer email account alerts. We covered it in OBR 22 (Feb 1997). We didn’t learn until a few months later that community bank Britton & Koontz actually beat Signet to market with alerts launched in the summer of 1996.
2. You could argue that Chase is not first with this capability. The handful of U.S. text-banking programs that support transfers are already offering the same capabilities as Chase (for example, see text commands at Natco Credit Union).  However, Chase is the first major bank to provide the functionality, as well as the first to really promote the reply-back function as a major benefit.
3. OBR Best of the Web awards are given periodically to companies that pioneer new online/mobile banking features, products, or enhancements. It is not an endorsement of the company or product, just recognition for what we believe is an important development that “raises the bar” in alt-delivery. Chase’s Instant Action Alerts are the 77th recipient since we began the awards in 1997. It’s the second for Chase. The bank also won in 2007 for being the first major U.S. bank to roll out text banking. For a list of the top innovations of all time, see our January 2010 Online Banking Report.
4. It was not mentioned within my business banking account or consumer credit card account. I don’t have a Chase consumer checking account.
5. For more information on alerts and messaging, refer to this Online Banking Report published in 2003.

WaMu Launches Text-based Mobile Banking

imageWaMu just launched its first foray into mobile banking, a text-message-based (SMS) service believed to be powered by New Zealand’s M-Com (previous post here). Thanks to Brandon McGee, blogging from his vacation via iPhone, for the tip (here).

The free service provides text-based access to balance and history of checking and savings accounts. To use the mobile services, WaMu customers must first register through online banking to activate their phone. Up to five phones can be registered through a single online banking account.  

Chase is the other U.S. top-10 bank using a primarily text-based approach for mobile delivery. See our Online Banking Report on Mobile Banking for more information on the growing market, including a 10-year adoption forecast.

More info at the WaMu website:

Wells Fargo Confirms Tests of ClairMail’s SMS Banking System

CIO Insight recently published a long article called, Will Mobile Banking Take Off? Reporter Dan Briody discusses Wells Fargo's mobile efforts and how their implementation parallels the early days of online banking. Wells EVP Steve Smith is quoted at length.

There's not much new for anyone closely following the space; however, about two-thirds into the article, we discover Wells Fargo is testing SMS banking, using ClairMail as its service provider. Not a huge surprise, but it lays to rest the rumors.

With Bank of America, Citi, and Wachovia grabbing the headlines this year with mobile initiatives, Wells Fargo could create a buzz with an SMS offering by being the first major U.S. bank to go that route. Several weeks ago, Bank of Stockton became the first U.S. bank to align with ClairMail (link here).

On a personal note, I can't wait. The ever-diligent Wells Fargo fraud department, which must have my home phone number on speed dial, will hopefully start texting me when I use their card outside of Seattle, saving us both a lot of time and expense.

For more info see our Mobile Money and Payments report here.