Time To Upgrade To Multi-Modal Messaging

It is time for financial services firms to upgrade their approach to what has come to be called "alerting." New paradigms and tools have emerged to help institutions deal more cost effectively and efficiently with clients. We're not talking about the over-hyped "Paradigm Shifts" of the late 90s, but rather a subtle change in how businesses think of the Internet, and leverage online tools at their disposal.

In its current state, the industry typically defines "alerts" as opt-in communication from the business to the consumer via some medium other than the Web, such as e-mail or Short Message Service (SMS).

Gomez suggests the industry do away with this definition and properly embed "alerts" within the scope of new interactive multimedia and discretionary (user- or site-defined) capabilities. The new definition embraces what is currently referred to as Multi-Modal Messaging (MMM).

MMM, while prevalent in other industries such as transportation and utilities, is still lagging in most areas of financial services. The term refers to the ability to send automated messages on a large scale to any device, and allow the recipient to interact in real time on the same device, or be able to interact at a later time on a device of his choosing to the same message. The modes of messaging range from automated voice to SMS to e-mail to fax. Here are two examples:

IVR pull. A credit card issuer's CRM system automatically initiates voice calls to customers with outstanding payments of more than $15,000. The customer receives an automated phone call and has the option of pressing "1" to pay now or pressing "2" to speak with a live person.

Phone push. A home insurer in Florida uses its CRM system to place calls to 30,000 homes in the area notifying them of an imminent frost. The insurer automatically connects with numerous "unwired" customers and saves money by instructing people how to prevent burst pipes.

The MMM concept is not new. Putting the customer at the center of the relationship and allowing him to choose when, where and how to interact has been the goal of ambitious companies, ranging from Sun Microsystems and Microsoft through Charles Schwab. However, the financial services industry is still lagging relative to available technology and in discovering ways in which customers want to interact.

Today's alerts, if available, are not always interactive, and do not take into account the broad expanse of the customer relationship. The credit card industry has done the best job of breaking this mold, yet its opt-in notifications are typically e-mail based only. For the most part, alerts are point solutions aimed at driving transactions and occasionally offering account management services.

For example, brokerage e-mail alerts are almost unilaterally focused on intraday position results. With trading volumes down and everyone from E*Trade to JP Morgan pitching "holistic relationships," alerts should focus on the overall relationship, such as proactively pointing out when client portfolios need to be re-balanced to meet pre-established goals.

While some areas, such as discount brokerage, have near alert ubiquity, many sectors do not offer alerts of any kind. Only 13% of the 30 firms on Gomez's Banking Scorecard (https://www.gomez.com/scorecards/index.asp?topcat_id=1&subSect=finance) send e-mail alerts informing customers of their account balances. The same percentage e-mail alerts with information about bill payment.

Moreover, no firms go beyond simple one-way e-mail or SMS alerts. In order to gain widespread adoption, the vision for alerts needs to be more encompassing, particularly as financial institutions begin incremental updates to their notification strategies.

MMM is important to businesses and consumers for the following reasons:

Web traffic does not equal satisfaction. Site traffic is no longer an adequate measure of success for financial institutions. Through MMM, companies can stop facilitating unfruitful site visits by notifying the customer of a specific action or need.

Reaching the offline world. Regardless of how fast the Internet grows, there will always be significant groups that will not communicate online. Businesses can use one system to automatically contact and interact with clients, regardless of Internet status, while leveraging existing CRM systems.

MMM is inherently personal. At a time when development budgets are being slashed, balancing personal touch with mass outreach is often difficult to maintain. MMM allows businesses to provide personal, actionable and convenient messages to a wide number of clients.

Gomez, Inc. is an Internet quality measurement research and advisory services firm in Waltham, MA. Please send any comments or feedback to [email protected].