Text messages make up a large portion of people’s daily online communication, with studies estimating the average 30 year old sends and receives around 80 texts in a single day. Businesses can take advantage of this high-traffic channel as well, but communicating with your audience through text is a delicate endeavor. Due to privacy concerns, and to cut down on spam, there are specific legal restrictions on the abilities of businesses to use SMS as a communication or marketing tool.
However, a carefully designed SMS strategy that both abides by legal requirements and benefits your audience in meaningful ways can work wonders for your business. Financial institutions have a number of specific use cases for text communication, so we thought we’d cover them, how to stay compliant, and what exactly the benefits are for your FI.
Text communication allows FIs to reach their members quickly and reliably. People tend to check their text messages more often than their email inboxes, making it a great option for important updates and alerts. FIs can use text messages to send account and fraud alerts, notifying their members immediately of suspicious activity or attempted logins.
Members will normally appreciate the message, as long as the content is relevant to them. Sending an account update when there’s nothing to report might cause your audience to opt out, whereas sending alerts when accounts dip below a specific threshold can prevent them from incurring fees and build your credibility.
Members also appreciate being notified of late and upcoming payments via text, as they’re more likely to see them and don’t require a response. It also prevents them from incurring late fees on missed payments, which helps build trust with your organization.
The brevity of text messages is actually a plus in this scenario; you can quickly and efficiently update your members on an upcoming payment, and their email inbox stays clear for more important messages.
Marketing & Outreach:
As long as your audience has opted into SMS communications, you’re safe to send them marketing material over text. A partner of ours, Credit Union of Colorado, used this in a clever way. When customers of car dealerships in the area applied for financing, they would indirectly be applying to CU of CO. After approving the loan, the credit union would then send the car buyer a text message welcoming them, as they were now a member.
The benefit of using text messaging, in this case, is that the process is incredibly quick, and most customers would open the text message while still in the dealership! In this scenario, an email would likely have been ignored, as the customer is already in a high-pressure sales situation, and doesn’t have time to sort through their inbox or read a long message.
While this CU of CO example wasn’t marketing specific, this outreach still served a marketing purpose by driving awareness and generating positive associations. Because the credit union was making the effort to reach out and welcome new members before they’d even left the dealership, it helped cement them as a friendly, community-oriented organization, one that new members would be more likely to trust with other financial needs in the future.
A business’ main concern when using text communication is usually ensuring compliance with national and international regulations. In the United States, the Federal Trade Commission (FTC) regulates the ways in which businesses can communicate with their audiences by phone. Most nations have similar bodies which govern this area, but the laws may differ in crucial ways, so it’s important to always check the laws surrounding SMS compliance for the nation in which you’re doing business.
In most countries, explicit written consent is needed before SMS communication can begin. Most businesses do this alongside asking for contact information with a simple check box, allowing you to start sending text notifications immediately. Regulations in the US also prohibit companies from sending text messages to audience members who have requested not to be contacted, making a unified consumer database an absolute must to avoid costly mistakes.
Text communication compliance can be very complicated, but luckily, there are a number of reputable businesses that can help you stay above board and reduce your vulnerability to legal issues. These solutions ensure that all of your outbound text communication is compliant with state and federal law, helping you save time and money. They’re well worth looking into if you believe SMS technology is right for your institution.
Take it to action
If your institution is looking to make use of SMS and other technologies, but needs assistance integrating them into a larger marketing strategy, you should hit us up. Prisma Campaigns creates comprehensive marketing solutions for financial institutions, helping them introduce automation and personalization into campaigns while integrating with existing technology.
Schedule a demo today, and see just how much of a difference the right partner can make.
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