The Benefits of Increasing e-statement Adoption Among Your Customers

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Regina Owens
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1 The Benefits of Increasing e-statement Adoption Among Your Customers

2 A white paper examining why e-statement adoption among bank customers remains stubbornly low and how you can increase adoption at your bank. By Griffin McGahey, Vice President, Strategic Initiatives, High Cotton It s estimated that financial services firms send customers up to 100 million pieces of billing and statement mail each year. More than 687,000 tons of paper and 16 million trees are required to produce all of this paper, and it cost banks an average of $9 per customer for each of the bills and statements that are mailed. By converting customers from paper to electronic statements, your bank can significantly reduce the volume of paper that s mailed to customers. This will result in numerous benefits for both your bank and your customers, including: Greater customer convenience More efficient customer communications Lower bank operating costs Higher bank profitability A reduced bank carbon footprint It costs banks an average of $9 per customer for each of the bills and statements that are mailed. Of course, cost savings are a main factor for many banks in the drive to convert customers from paper to electronic statements. According to one study, banks can reduce statement expenses by two-thirds when they send eligible statements electronically instead of mailing paper. The study found that banks can realize annual savings of nearly $100,000 by switching 10,000 existing customer accounts from paper to electronic statements. Adoption Remains Low The good news is that as they have become more environmentally conscious, many customers are increasingly open to the idea of switching from paper to e-statements. However, more than half of American adults (54%) still receive a paper checking account or credit card statement in the mail, according to a survey recently conducted by CreditCards.com. Meanwhile, e-statement adoption remains stubbornly low, with an annual adoption rate of just 3.5 percent. Not surprisingly, younger bank customers are more likely to opt for e-statements: Only 6 percent of adults age receive a paper credit card statement, but 36 percent of adults age 71 and over receive a paper credit card statement, the survey found. The fact is, boosting e-statement adoption doesn t just happen by accident. It requires a well-defined strategy on the part of your bank that incorporates consistent customer communications across a wide range of different channels, both print and electronic. Your strategy should use the right combination of carrots and sticks to both incent customers to switch from paper to e-statements and, in the right situations, penalize customers who choose to stick with paper. 2

3 Carrots take the form of incentives to encourage customers to switch to e-statements. For example, you can offer customers a small gift or discount or enter them into a drawing for a larger gift if they switch. You should perform research and testing to determine what types of incentives are most effective in converting customers at the lowest cost. Sticks usually take the form of fees charged to customers who choose to continue receiving paper statements. You should be careful in taking this approach since it could backfire among customers who, for whatever reason, still want to receive paper statements. Your bank s brand and reputation could suffer irreparable damage if these customers leave and also tell their friends and others about their experience. A better approach might be to limit the services available to customers who don t switch to e-statements. For example, you could require customers to receive statements electronically if they want access to previous months archived statements. Let Customers Know About Them You might think that all your customers know about e-statements, but this isn t necessarily the case. So your strategic plan should start with a detailed communication plan designed to, number one, let all customers know that e-statements are available to them. And number two, your plan should educate customers about the benefits of switching from paper to e-statements. Effective education vehicles include: Your current print statements and inserts Banners and popups on your website Newsletters (both print and electronic) New account welcome kits Face-to-face interactions between bank employees and customers Banks can realize annual savings of nearly $100,000 by switching 10,000 existing customer accounts from paper to electronic statements. Keep in mind that your e-statement adoption strategies should be viewed through the big-picture lens of improving the customer experience. So your communications should focus on how switching to e-statements will result in greater convenience, ease of use, time savings and overall satisfaction for your customers. Segment Your Customers A logical place to start your e-statement adoption efforts is with your new customers, since they haven t gotten into the habit of receiving paper statements yet. For example, you could have all new accounts automatically opted into e-statements in other words, they will receive e-statements unless they specifically ask to receive paper. It s important to give them the option of opting out of e-statements and receiving paper if that s what they prefer. 3

4 You could also charge a paper-statement fee to new, but not existing, customers. This would help prevent the kind of backlash described above by existing customers who still want to receive paper. According to one study, adopting this strategy can nearly double a bank s adoption rate from 3.5 percent to 6.5 percent. The next logical group to focus on is your online banking customers. These customers are already accustomed to banking electronically, so switching them to e-statements should be relatively simply. Use banner ads, pop-ups and other online marketing mediums to encourage them to switch from paper to e-statements. Also, similar to new customers, you could automatically opt online banking customers into e-statement delivery while giving them the option of receiving paper if they prefer. The most difficult group to convert to e-statements will probably be your non-online banking customers. If they haven t yet tried online banking, these customers might also be reluctant to try electronic statements. This is especially true for older customers, who are often less technologically savvy. It may be wise to use lower-pressure tactics with this customer demographic than you might with your new and online banking customers. Best Practices For Boosting e-statement Adoption Here are a few best practices for increasing e-statement adoption that have been utilized successfully by some banks: 1. Make it easy to enroll and download statements. This is absolutely critical to the success of your initiative. If enrolling and downloading e-statements isn t simple and easy, customers won t participate period. There should be integration and single sign-on access to both online banking and your paperless platforms so customers can access all their online needs and e-statements with one click. 2. Stress the environmental benefits. Going green has become all the rage, so play up the fact that by switching to e-statements, customers will reduce their carbon footprint and be doing their part to help protect the environment. Stressing the green aspects of e-statements will also generate positive PR for your bank. If enrolling and downloading e-statements isn t simple and easy, customers won t participate. 3. Make sure your e-statements mirror your print statements. Your electronic statements should be an exact replica of your print statements. This will help allay concerns some customers might have that they won t have full access to all their account information if they switch to electronic statements. 4. Assure customers of data security. High-profile data breaches have increased concerns among some customers about the security of their financial data. Therefore, you must reassure customers that e-statements are safe and they aren t sacrificing data security when they switch. Describe in non-technical terms the steps your bank is taking to keep their data secure. 4

5 5. Create an internal campaign. Get your employees involved in the effort, first by educating them on the benefits of e-statements so they can clearly explain them to customers. Then encourage them to actively promote e-statement conversion in all their interactions with customers. You can even create a campaign and give prizes to employees who convert the most customers to e-statements over a certain period of time. 6. Set goals for e-statement conversion and track and measure your progress. This will give everyone a target to shoot for. Determine which metrics you ll track and make sure you have the systems in place to deliver the data you need. Then share the results with staff so everyone is kept abreast of progress toward the goals. High Cotton st Ave South, Irondale, AL info@highcottonusa.com (877)

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