Recent research released by Accenture and the World Economic forum (WEF), estimates that the adoption of digital technologies within the financial services industry can unlock R1,2-trillion in value for the South African financial services industry, its customers and society between now and 2026.
A fundamental technological solution that is vital for the industry to take advantage of in South Africa is the SMS.
This is according to Greg Chen, CEO at Mobiz, who says that text messages are still a widely used and beneficial way for banks and other financial institutions to communicate with customers. “This is because customers do not need to have data or be connected to Wi-Fi to receive an SMS, which means these types of communications can be received at anytime, anywhere.”
The importance of SMS in the financial sector was also thrust into the spotlight during COVID-19. Not only was the pandemic a catalyst to many traditional banks going digital, as well as the introduction of new digital banks in the market, but the use of paper and physical services decreased in response to South Africa’s national lockdown to mitigate the spread of the virus.
With this in mind, Chen outlines how SMS and mobile marketing platforms that take SMS beyond simple text, can boost the financial services industry in the country:
* Sharing statements: Sharing statements via SMS means that customers are able to manage their banking conveniently with all their information stored digitally and without having to spend their own data. Digital vs printed statements also allow banks to be able to save on paper, printing and postage fees.
* Loyalty programmes: As a result of Covid-19, the trend of loyalty programmes has also increased as cash strapped consumers look for ways to stretch their income. For example, FNB’s eBucks reported that since the start of lockdown until January 2021, 7,4-million registered eBucks users spent more than R740-million on essentials such as fuel, groceries, airtime and data as well as other day-to-day necessities. SMS is a great way for rewards, deals and vouchers to be shared with customers as well as other communications around loyalty programs.
* Marketing opportunities: Text messages can be used to tell potential new customers about a bank’s services as well as communicate tailored deals and offers to existing customers. By using SMSs to send tailored communications to customers, banks will be able to improve customer service in a digital world by remaining personalised and offering solutions to customers’ needs.
* Crisis communications: With the increase of digital services comes the risk of cybercrime and fraud. This is reflected in the most recent SABRIC Annual Crime Stats report for 2019 which revealed that digital banking fraud incidents increased by 20% year-on-year. As such, if a bank experiences a data-breach or notes scams taking place, they can use SMS to communicate these issues to customers as well as provide them with advice on how to protect themselves.
Chen highlights that there are various types of fraud that have become apparent as a result of the adoption of digital services and one of these are smishing scams. “Similar to phishing, when an email requests the recipient to click on a link whereby they are asked to enter sensitive information, smishing is done via SMS. This is to obtain personal information such as passwords, ID numbers and bank card details.”
Financial institutions must ensure that their messages are trusted and encrypted, says Chen. “Any links used should be de-anonymised and not hidden behind generic shortened URLs. Businesses must use link shortening services that verify links with the sender (that is, yourbank.mo.biz).
“More and more, consumers are demanding that financial services operate more like top technology brands – and the pressure is on to meet these heightened expectations. Ultimately, with increased operations taking place digitally, it is vital for digital banks to ensure they are effectively and safely communicating with customers to improve trust and uptake of online services – easily managed through a trusted SMS,” concludes Chen.