Is SMS Dead?

Recently at several banks, I have encountered the questions, “Is SMS dead?” and “Is SMS worth investing in?” My quick response is “I have an iPad, but it doesn’t mean that I want to ditch my pen and paper.”

It’s true that mobile technology is moving quickly, but just because we have newer and newer features arriving on our devices each week does not mean that we should be ready to simply ditch others without asking questions from several different perspectives. In this particular case with banks assessing emerging technologies, I propose that technology should not be the focus of the question at all, but instead, the customer should be the focus.

By putting the customer at the center of our focus, the question changes from “Is SMS dead?” to “How many of my customers prefer SMS based communication?” and “Why do my customers prefer SMS based communication?” What you may find is a dramatically different answer to a dramatically different question.

The customer centric question also immediately identifies that the customers engage with the bank in a number of ways. Although mobile adoption continues to rise relative to Online, Branch, ATM, and Call Center adoption, there is still a need for the bank to provide service across all channels to support customer engagement at its most fundamental level. There are numerous cases where multiple channels are required to effectively engage the customer, provide information, and allow the customer to “do real work” like completing forms or applications. Most importantly, effective engagement is dependent on the customer’s present situation, the customer’s environment, and the customer’s willingness to perform certain actions on certain mobile devices.

Additionally, it is critical to investigate what the term “engagement” means. In a many ways, banks tend to perceive engagement as the customer accessing an ATM, walking into a branch, or requesting a balance via SMS or via mobile app. This type of engagement is incomplete, as there is an entire world of engagement through bank notifications using SMS or email that create loyalty, keep the customer engaged, or keep the customer protected. If a bank is able to proactively keep customers informed and able to manage their busy lives without having to call a call center or visit a branch, then the bank has created truly positive and valued engagement with the customer.

The notion that SMS is an “older” technology minimizes the most important elements of the technology. SMS is available on all phones, whether feature phones or smart phones. SMS is generally accepted to be read up to 90% of the time which is much more than email, and SMS often does not require a customer to type in username and password prior to issuing a banking command, making it much more convenient for people on the move.

So to those who are questioning the value of SMS as a viable channel in their suite of customer engagement tools, remember that the world of mobilized products and services takes many forms, and that SMS plays an important role among the many technical options available. For now, even in the face of rising mobile app and continued online use, SMS should be regarded as a critical component for engaging your customers and providing access to key banking services.

-Clay Almy (