As competition for customers heats up across many different industries, user experience becomes more important than ever. What once might have been considered an innovative feature might now be considered table stakes. While smartphone apps have taken off and become a primary customer interface for retail banking, there are still some areas where SMS shines through.
Even those who do use smartphones can appreciate the ease and convenience of managing their finances through SMS messages. Customers can use simple text messages to pay bills, recharge prepaid services, receive account alerts and keep up-to-date on everything going on with their account. SMS provides a communications channel that just about everyone on earth can receive and doesn’t require any apps or even 3G/4G mobile internet access. By offering the best in digital payment and money-management solutions, financial institutions gain a definite competitive advantage.
Advantages of SMS banking
Mobile banking through SMS is a popular, user-friendly service. Banking customers are able to view their transaction history and manage their accounts securely via text message. SMS banking simply requires a mobile phone that is capable of sending and receiving text messages. It does not require a smartphone or connection to the Internet. Customers are able to receive information about accounts any day, around the clock.
SMS is used around the world for mobile phone-based money transfer and banking services. For example, M-Pesa, a mobile phone-based money transfer and microfinancing service, has gained widespread adoption in Kenya and is now expanding to Afghanistan, South Africa, India and Eastern Europe. This service allows users to deposit, withdraw and transfer money easily with a mobile device. This is done through PIN-protected SMS messages to other users like merchants of goods and services.
Extra security with SMS
SMS is stepping up to make online and mobile banking even more secure. Banking institutions are taking account protection to the next level by using SMS for two-factor authentication. This is mainly used when a customer makes a major account change or significant online purchase or payment. Customers are prompted to send themselves a security code via SMS, which they then enter in addition to their banking password. This creates a dual-channel authentication which enhances account security.
Extra security means a better user experience for banking customers. With notifications like overdraft and low balance alerts, deposit notifications, and account updates, users have access to real-time information about their accounts. SMS notifications can be turned on to alert a customer when a large transaction has been made. The customer must confirm a large transaction in order to prevent fraudulent charges.
Checking and savings account alerts
The number one concern of banking customers is the safety of their accounts and information. Banks are using SMS as a way to alert their customer of negative and low balances, overdrafts, and any transactions that seem suspicious. Customers can also get an alert if they make a withdrawal that exceeds their set dollar amount. Signing up to receive text alerts when new statements and other documents are available is also an option.
ATM and check card account alerts
Customers can opt in to account alerts for their ATM transactions and check card purchase verification. Each type of alert is optional for those who only wish to receive certain alerts. Banks are using SMS to issue alerts for transactions with fraud risk, larger transactions and various criteria determined by individual customer needs. Examples of these transactions include ATM cash withdrawal, international transactions, gas station purchases, purchases made without a card present and any declined transactions.
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