Download - Interactive Mobile Messaging: A Next Generation Communication Strategy that Works

Interactive Mobile Messaging:

A Next-Generation

Communication Strategy That Works

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Why Interactive Text Messaging

Is Critical To Your Organization

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Click to edit Master title style

Why Alerts Matter

Alerts can serve as the customer’s financial nervous system and touch almost every aspect of banking.

Alerts will introduce customers to mobile banking and payments.

Financial alerts are conversation-starters with customers.

Timely alerts can deputize the customer.

Alerts can build customer trust.

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Javelin’s Five-Year Forecast for Financial Alerts

62 Million Online Households Will Receive Alerts by 2014

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52 54

56 58

60 62

48 50

53 55

57 60

23 25

29 32

35 38

-

10

20

30

40

50

60

70

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Mil

lio

ns

of

Us

ers

Millions receiving financial alerts (both SMS and e-mail)Millions receiving e-mail alerts

Millions receiving SMS alerts

© 2009 Javelin Strategy & Research

Actuals Forecast


Bullish Signs for Mobile Banking

Ubiquitous devices.More banks are offering it.Consumers are switching banks for it.

8% of switchers in first quarter!Smartphone frenzy.Affordable data plans.Demand for downloads.Range of products and price points.


2 of 3 Consumers Consider Alerts Useful

Usefulness of Alerts to Detect Fraud and Manage Finances

6

32%

33%

27%

5%4%

5 - Extremely useful

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3

2

1 - Not useful at all

Q25: How would you rate the usefulness of financial alerts in helping you detect fraudulent activity or manage your finances? On a scale of 1 to 5, let 1 represent "Not useful at all" and let 5 represent "Extremely useful."

March 2009, n= 2,641Base: All households with banking products.



Most Consumers Want to Share Responsibility for Protecting Their Accounts

Consumer Attitudes for Who Bears Primary Responsibility for Account Security

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4% 5% 51% 24% 16%

0% 20% 40% 60% 80% 100%

All households

1 - Solely my responsibility 2 3 4 5 - Solely the bank's responsibility

Q10: When it comes to protecting your financial accounts from fraud, who do you think should be primarily responsible? On a scale of 1 to 5, let 1 represent "Solely my responsibility" and let 5 represent "solely the bank's responsibility".

March 2009, n=2,641Base: All households with banking products.



All Generations View Alerts as Effective Fraud-Fighting Tools

Usefulness of Financial Alerts to Prevent Fraud (by Generation)

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All consumers

Gen Y

Gen X

Baby boomer

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

31%

23%

27%

34%

33%

32%

34%

32%

28%

33%

30%

26%

5%

7%

5%

4%

3%

5%

4%

4%

5 - Extremely useful 4 3 2 1 - Not useful at all

March 2010, n= 1,870, 2,086, 1,208, 4,979Base: All consumers with financial products.

© 2010 Javelin Strategy & ResearchQ25: How would you rate the usefulness of financial alerts in helping you detect fraudulent activity or manage your finances?

What Is Slowing Consumer Adoption

Of Mobile Alerts?

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Seven Critical Flaws of Alerts

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Not useful enoughNot woven into everything an FI doesHeadache to set up and tailorNot timely enoughNot actionable enoughPoor marketingNot safe enough


Early-Stage Volatility: Preferences for Alerts Shift Over Time

Most Valuable E-Mail or Text Alerts (2007-2009)

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2%

9%

14%

24%

35%

33%

35%

33%

4%

12%

26%

35%

42%

35%

31%

38%

5%

4%

11%

24%

26%

31%

38%

40%

0% 10% 20% 30% 40% 50%

Other, please specify

Addition or subtraction of registered users

Notification of application of credit

Notification of transfers from or to an account

Changes to personal information (password, phone number, e-mail)

Confirmation of a deposit

Notification when a bill is due or has been paid

Notification when balances fall below a pre-set level

2009

2008

2007

Q24: If you were given the ability to receive alert messages (either by e-mail or SMS) on your immediate financial status, which of the following would be of value to you? (Select up to three)

March 2009, 2008, 2007, n=2,641, 2,256, 1,972Base: All households with banking products.


Consumer ratings for four alerts plunged 8-16 percentage points from 2008.


Hispanics and Asians are Growth Segments; Multilingual Programs Help Remove Barriers to Entry

U.S. Demographic Projections

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85%

4%

11%

1%

67%

14% 13%

5%

47%

29%

13%9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

White Hispanic African-American Asian

1960

2005

2050

© 2010 Javelin Strategy & ResearchPew Research Center – U.S. Population Projections 2005 – 2050 February 2008

How to Identify Which Mobile Alerts

Can Add Customer Value And Reduce Costs

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Consumers Desire to be Contacted Through Various Channels

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2%

3%

6%

16%

32%

41%

0% 10% 20% 30% 40% 50%

Other, please specify

By calling your work phone

By text message (SMS)

By e-mail

By calling your mobile phone

By calling your home phone

Percent of Consumers

March 2010, n = 5,211Base: All consumers.


Q50: If your bank or credit union believed there was fraudulent activity on your account, how would you prefer they first contact you? (Select one only)


Six Segments That Show Significantly Higher Use of Alerts

Usage of Alerts in Previous 30 days (By Market Segments)

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6%

8%

8%

11%

6%

12%

21%

17%

22%

22%

25%

25%

27%

34%

0% 5% 10% 15% 20% 25% 30% 35% 40%

All consumers

Gen X

Online bankers

Gen Y

Tech-savvy

Smartphone

iPhone

E-mail

SMS

March 2009, n= 105, 314, 403, 536, 2,019, 1,028Base: All households with banking products.


Q12: Please indicate the last time you conducted each of the following: Received a financial alert by e-mail (i.e. low balance alert). Received a financial alert by text message (SMS). Online bankers, tech savvy, and Gen X are not significant for SMS alerts.

iPhone users are pace-setters – once again.


‘Moneyhawks’ are Heavy Users of Banking Services

Figure 6: Services Used in Past 30 Days Cumulatively (Moneyhawks vs. Consumers)

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5%

9%

25%

28%

29%

22%

30%

29%

63%

73%

16%

20%

36%

37%

38%

38%

48%

49%

75%

90%

0% 20% 40% 60% 80% 100%

Transferred funds using a wire transfer through a money service business (such as Western Union)

Exchanged e-mail with a customer service representative

Spoke by phone with a bank or credit union representative

Used an automated telephone system to perform any banking function

Visited a branch for a reason other than deposits or withdrawals

Sent money by e-mail to another person, using a service such as PayPal

Transferred funds to another individual online

Transferred funds between your own accounts from one institution to another institution online

Used an ATM to make a deposit or withdraw cash

Logged into your bank or credit union's website for online banking

MoneyhawksAll consumers

March 2009, n=650, 2,641Base: All households with banking products.

© 2009 Javelin Strategy & ResearchQ12: Please indicate the last time you conducted each of the following: In the last 30 days only other options available.

Moneyhawks• They receive

alerts at least quarterly.

• They comprise 23% of respondents.


9 of 10 Consumers Take Action When They Receive an Alert

How Consumers Respond to Financial Alerts

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6%

1%

2%

11%

14%

33%

33%

0% 5% 10% 15% 20% 25% 30% 35%

Other

I sign into mobile banking

I stop using the credit or debit card

I don't respond to financial alerts

I go into a physical branch

I call my bank

I sign into online banking

Percent of Households

Q26: How do you typically respond to financial alerts you receive regarding your immediate financial status? (Select only one)

March 2009, n= 2,641 Base: All households with banking products.


How To Incorporate Interactive Text Messaging

Into A Multi-Channel Communications Strategy

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Customer-Driven Architecture Will Define the Future of Interactive Finance

Customer Experience and Business Impact

Experience Customer View Provider Impact

Always-on “I’m synched with my money” Loyalty, cross-sell

Real-time “I’m an account monitoring-aholic!”Cross-sell, fees,

loyalty

Transparent “OK, I get where that came from” Costs, selection

Customer-controlled “For my money, I’m in charge” Asset-gathering

Integrated “Now I see the whole picture” Cross-sell revenue

Safe “For my identity, I’m in charge” Cost savings, loyalty

Goal-fulfilling “My provider, my goals” Revenue, loyalty


(From collective analysis of Javelin’s 265,000 proprietary industry research of consumers, merchants, FIs, vendors)


Two-Way Interactive Alerts Allow Customers to Participate in Fraud Prevention

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Two-WayInteractiveAlerts

FIAvoidsPotentionFraudLosses

FIAlertsCustomerofPotentiallyFraudulentActivity

$

CustomerAuthorizesorDeniesTransaction

Customer is EmpoweredtoPreventFraud

© 2008 JavelinStrategy &Research


Priority No. 1: Identify Alerts That Matter Most To Consumers And Financial Institutions

Javelin Method for Prioritizing Alerts

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Balances fall below a pre-set level

Bill pay due or paid

Transfers

Application of credit

International transaction

Large withdrawal

Confirmation of a deposit

Changes to personal information

Addition or subtraction of registered users

Shut-off of alerts

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1

2

3

4

5

6

7

8

9

10

0 1 2 3 4 5 6 7 8 9 10

Fin

an

cia

l In

stitu

tion

Util

ity

Perceived Consumer Utility

November 2009, n=2,641Base: All consumers with bank products.


Q24: If you were given the ability to receive alert messages (either by e-mail or SMS) on your immediate financial status, which of the following would be of value to you? (Select up to three)

Target alerts that will score highly for both parties.


Priority No. 2: Minimize The Need To Set Or Tailor Alerts At An Intimidating Online Control Panel

Four ways to improve:Default consumers into

alerts.Recommend “starter

bundles.”Enable customers to set

alerts on the fly.Experiment with

predictive analytics.

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Alan BerreyJuly 21, 2010

SoundBite CommunicationsInteractive Mobile Messaging

Breaking Through the Noise

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direct mail

text messaging

voiceemail

social media

To get desired results,

communications must be...

Relevant Personal Timely Interactive

Interactive Mobile Messaging

• More than one-way mobile alerts

• Sufficient detail and adequate response alternatives

• Clear call to action

• Support for mobile originated conversations

• Channel blending and escalation

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“Interactive Mobile Messaging” is a set of mobile features that are available on SoundBite’s Engage Platform. Based on intelligent rules-based processing, the features include automated mobile conversations, via voice, text, email, or a combination thereof.

Corporate Benefits

• Cost Savings– Reduced operations and

telephony costs– Reduced Agent time/cost

(multi-tasking)

• Service Improvement– Fewer dropped calls due to

hold times– Expanded options for

customers

Consumer Benefits

• Preferred Channel

• Convenience/Productivity– No waiting on hold– Privacy– Reduced redundancy

• Control– No feeling of being stuck on

the phone– Consumer controls the pace

of the conversation

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Benefits of Interactive Text Messaging

About SoundBite Communications

Introduction to SoundBite Communications

Proactive Customer Communications Market Leader• Intelligent platform enables clients to

design, execute, measure and optimize customer communications

• Multi-channel: voice, text, email• Software-as-a-Service (SaaS)• Solutions span clients’ customer lifecycle

Over 200 clients• ~50 Fortune 500 B2C companies

Strong financial position• $36M cash• No debt

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Company Facts

• Founded: 2000

• Headquarters: Bedford, MA

• NASDAQ Ticker: SDBT

• 2009 Revenue: $40M

• 2009 Messages: 2.0B

Key Strengths

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Clients andMarket Position

Innovation Expertise FinancialTechnology

• Proactive Customer Communications (PCC) Market leader

• 200+clients, including ~50 Fortune 500 B2Cs

• Valued set of business partners

• Emerging global position

• 2B+ messages annually

• 10 Years providing PCC

• ~200 R&D man years

• Domain expertise: verticals, channels, and customer lifecycle applications

• Flexible, on-demand platform

• Extensive patent portfolio

• Intelligent, interactive, multi-channel communications

• SAS70 Type II & PCI Level 1 compliant

• Publicly traded (NASDAQ: SDBT)

• $40M+ TTM revenue establishes SDBT as a market leader

• Strong cash position

• No debt

• Free-to-end-user text messaging

• Preference Management

• Interactive mobile

• Contact Center Text Messaging Solution

• First with integrated AVM, text, predictive, and email

• Blending and escalation

7 of the top 10 global issuing

banks

7 of the top 10 U.S. telecom & media providers

5 of the top 12 U.S. retailers

12 of the top 20 U.S. utility providers

~90 collections firms

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SoundBite Users Include ~50 Fortune 500 Companies

More than 200 clients actively use SoundBite’s Proactive Customer Communications offering

Financial Services

Telecom& Media Retail

Energy & Utilities

Collection Agencies

Contact Center

ClientData

Business Applications

Functional /Business Unit

Cli

ents

SoundBite Engage™ Platform

Enterprise Management

Dialog Engine

Voice Text Email

Contact and Preference

Management

Campaign StrategyManager

Campaign and Contact Center Management

Analyticsand Reporting

FTP Automation Agent PortalWeb Services APIClient Web Interface

Sec

uri

ty a

nd

Co

mp

lian

ce

SoundBite Engage Platform

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Consumers

Interactive Mobile Messaging

• Empowers your organization to communicate with consumers over a preferred communications channel using their mobile devices

• Leverages two features unique to SoundBite Multi-Channel Communications Platform– SoundBite Dialog Engine– SoundBite Agent Text Portal

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Dialog Engine Agent Text PortalConsumer

Interactive Mobile Messaging Solutions with SoundBite Engage ™

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Communications Across the Customer Lifecycle

Customer CareCollections & Risk Mgmt

Payments

Customer Lifecycle

Sales & Marketing

Banking Example: Proactive Payment

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PAY

PAYMIN

CONFIRM

Your Bank National account is almost due.(acct# ending 3333) For payment options reply PAY. Questions reply HELP or call 888-000-0000.To end alerts reply STOP

Bank National: Balance $723.44.Minimum pmt $42.18.You can pay from debit acct#_7372. Pay entire balance or make minimum payment. Reply PAYALL, or PAYMIN

Bank National: Please confirm you want to make a payment of $42.18 using debit acct#_7372. To confirm and make payment reply CONFIRM. To cancel reply CANCEL

Bank National: Thank you, your payment of $42.18 has been processed. Confirmation #88128. For more text message options reply MENU

Dialog EngineCustomer

Banking Example 2: Agent Support


Agent TextPortal

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MENU

Free Msg: Welcome to First National! Did you know customer support can be reached by text message? For options, or to send a text msg to a live agent, reply MENU

First Nat’l:You can get info about your acct, service, billing, and more. Reply PHONE, SERV,or BILL. Or to send text to an agent reply AGENT plus your question

AGENT how do I change my payment due date to the 15th of each month

First Nat’l has received your message. An agent will reply shortly. For more text options reply MORE

This is Jen from First Nat’l, I am happy to change your payment due date …

Mobile Originated Conversation


Agent Text

Portal

A printed piece or web site says,“For support text SUPPORT to 77053”

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SUPPORT

ALERT

…

Welcome to First National Bank Support. To check your balance at any time reply BALANCE. To sign up for new product alerts reply ALERT

…

…

Multi-Channel Blending

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“Press 3 to receive an e-bill balance-

due alert…”

e-bill Center

Enter Online ID to view and pay bill:

Online Billing AlertAccount Number: ********23Amount due: $795.62View and pay bill

“Press 1 to hear your balance due now…”

“Your account balance is $795.62. To speak with a

representative, press 1…”

“Press 2 to receive a text message…”

Free msg: Balance due: $795.62 To pay, send reply code “PAY” or call 1-800-123-1234

Your e-payment of $795.62 has been credited to your account. Thanks!2

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SoundBite Financial Services Customer Lifecycle Solutions

Proactive Customer CareWelcome Call Card ActivationContact Verification Program Enrollment Application/Account

Updates Preference Management

Proactive Collections & Risk Management

Pre-Collections ReminderPast Due Reminder Self-Cure

Fraud Monitoring Risk Management

Proactive Payments Payment Reminders Self-Service

Payments Expedited Payments Prepay

Replenishment

Proactive MarketingMessage Opt-in Cross-Sell/Up-Sell

Preference Management Loyalty/Rewards

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Contact SoundBite [email protected]

(877) 768-6324

SoundBite CommunicationsInteractive Mobile Messaging

Javelin provides superior direction on key facts and forces that materially determine the success of customer-facing financial services, payments and security initiatives. Our advantages are rigorous process, independent position, and expert people.

For questions regarding access to Javelin research please contact: [email protected]

© 2010 Javelin Strategy & Research. All rights reserved. This data was provided to accompany a report which was licensed for use by the original subscribing client only. The data and report is protected by copyright and other intellectual property laws. Licensors may display or print the content for their use only, and may not sell, publish, distribute, re-transmit or otherwise provide access to the content of this report without permission.

Thank You

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