When it comes to suppressing paper, Charter One Bank is breaking new ground. It recently launched "Totally e Checking," a product aimed at customers without need of paper statements and canceled checks. The account pays interest on balances above $1,500 and does not charge a monthly maintenance fee to customers willing to live exclusively with online statements and check images.
In assessing whether other banks should consider following suit, let's examine the current state of paper suppression within the industry.
Paper Suppression Opportunities
Among the 30 percent of Gomez Q3 2002 Internet Scorecard Banks offering online statements, 60 percent are Internet-centric banks, all of which charge customers for paper versions of their statement. However, among the remaining six brick and mortar banks, just two, Key Bank and First Tennessee, allow customers to suppress paper. In fact, in both cases, customers must turn off paper to view their statements online. Both Key and First Tennessee offer extensive online statement history (13 and 16 months respectively) and send an e-mail alert when a new statement is available.
Financial institutions have taken a number of approaches to encourage paper suppression, including incentives and additional fees. Previous incentives include the $5 statement credit offered by Citibank credit cards and the $25 auto premium discount offered by GMAC123 (the online direct sales unit of GMAC). However neither Key Bank nor First Tennessee offers an incentive to customers to turn off paper (Although First Tennessee offers free bill payment to customers who suppress paper, free bill payment is also available for customers with large balances). Key Bank promotes statements by focusing on convenience and safety, going so far as to suggest electronic statements may "reduce the threat of identity theft."
Furthermore, high demand revealed by recent Gomez research relative to electronic statements among both online and offline bankers suggests that banks may have a shot at paper suppression without offering a financial incentive.
Innovation Is Critical
We've seen several innovative approaches across the financial services spectrum to encourage paper suppression For instance, E*Trade streamlines the sign-up process for electronic document delivery by placing it directly in the customer's path. Meanwhile, insurers such as Geico take a different tack by suggesting that paper suppression will "help Geico to keep customer rates low by reducing costs."
Paper suppression is clearly an opportunity to lower costs while meeting the needs of customers. However, similar to accounts that offer check safekeeping, products built around paper suppression provide an additional opportunity to reward customers for utilizing lower cost channels.
Moriah Campbell-Holt is an analyst at Gomez, Inc., a Waltham, MA Internet Quality Measurement firm. Please send any comments or feedback to [email protected]