E-Delivery: Solving Key Customer Concerns
Institutions can create same-as-printed-statements and other notifications electronically and garner tremendous rewards by turning off paper. Institutions typically achieve their targeted return on investment with less than 25% acceptance of paper turned off, depending on the cost of delivery and other factors in their daily operations.
In addition, the operational uses of an electronic, transactional archive are numerous. Check images easily replace paper checks in many back-room, "day-two" operations. These include the resolution of exceptions such as stop-payment orders, un-posted items, and NSF (non-sufficient funds) items. If these images can be sourced from an archive, there is no need to sort and capture exceptions separately. Likewise, the resolution of adjustments, a process still frequently dependent on microfilm research, can be expedited through the use of a transaction archive containing images. In fact, a well-organized archive of both check images and electronic transactions can ultimately improve most back-end processes.
From the green perspective, financial institutions that have turned to electronic means of information delivery can use this as a differentiating marketing device. Reducing the reliance on paper has a domino effect on various other processes, including, but not limited to:
- Reduced impact on national forests;
- Environmental preservation; and
- Reduced reliance on conventional delivery methods, most of which rely on fossil fuels at some point in the process.
Not only does the change in the "green" behavior of the institution save costs—particularly crucial in the current economic climate—but the message resonates well with an ever-more environmentally conscious consumer base. If publicized correctly, this type of messaging can be used as a competitive differentiator or as a customer-retention vehicle.
Further, institutions using various forms of technology create differentiation in the marketplace and generate new products and services to distinguish them from their competitors.
These institutions offer complete access to all customer information—statements, check images, reports, notices of all types and more—to provide a 360-degree view of the customer’s accounts and transactions both internally and to the customer. They secure information and make it available for retrieval when, and where, the customer wants it. As customers adopt electronic delivery and are provided with new services and access mechanisms, the technology landscape and institutions will continue to evolve.
As noted earlier, convenience and ease of access to historical information are critical factors in changing consumer behavior. A significant percentage of individuals are also looking for incentives and other benefits as well as being able to schedule payments online. Higher acceptance levels are likely as institutions push these programs into the marketplace.
3. Customer service and reduction of identity theft. To be successful with electronic delivery of financial information, institutions must make compelling arguments that drive consumers to change behavior and turn off paper statements. One critical way that has been identified to motivate this change in behavior is that the electronic delivery of statements (paper turnoff) has been proven as a very effective way for customers to protect themselves from identity theft. Another is overall convenience: the benefit of receiving information faster and storing statements and associated payments more cost effectively. This behavioral change of accepting electronic delivery as the de facto standard is predicted to accelerate during the next 10 years as individuals more conditioned to e-delivery of various types of information come of age.
Identity theft remains a consistent and high-profile concern. Identity theft is most frequently sourced from physical records such as bank statements and other records secured from garbage and stolen mail. An estimated 25% of identity fraud could be prevented through the use of electronic delivery of financial information. Customers who receive statements and review transactions electronically have fewer losses for less money on average per fraudulent instance than those using paper. One primary reason is that financial information delivered electronically reaches its intended recipient more quickly and securely than with paper delivery. This speed of delivery permits consumers to validate their information in a more timely fashion, thereby halting possible attempts at identity theft.
Research has determined that consumers increasingly believe that receiving bills and statements online provides an improved means to store them as permanent records. In the past, much of the anxiety about electronic statements was based on customers’ inability to access historical information. Statements are now password protected and encrypted in a secure environment, with most banks storing all customer statements for seven years or more, and providing online access to at least sixteen months of statements. Many customers now believe they have complete control of their record keeping via electronic means.
Another key motivating factor is convenience. Making information easy to obtain, when combined with trust in the institution, is key to the successful delivery of historical information. The ability of a customer to obtain up-to-the-minute information on their financial position, at any time, from anywhere, has been critical to the adoption of electronic services provided by financial institutions.
Successful institutions will continue to leverage increased electronic access to historical statements, making them readily available and also providing the message that electronic statements do a much better job of protecting the consumer from identity theft.
Financial institutions must continue to strive to comply with ever-increasing legal requirements, reduce costs, comply with green initiatives, remain competitive and also provide excellent customer service. As they attempt to do this, they will look for solutions to provide lifecycle management, long-term document storage in a secure, electronic format that satisfies legal and audit requirements, and also the ability to share requested information more easily with their clients. The institutions that strike the correct balance of these oft-competing requirements are those that will thrive as we continue on in this new millennium.
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