Mastering Financial Communication: How SMS Technology Enhances Efficiency and Security

Suppose at the very beginning of this year, you got a pop-up SMS notification on your screen that read, “You have received $XX, XXX.” Definitely, there is no greater feeling than receiving your salary on time. But what if you had not got this SMS? How would you ever know if your money is credited or debited from your account? 

Well, banks and other financial institutions understand the importance of delivering crucial financial information to their customers. 

Earlier, ledgers and passbooks were used to record the transactions and account balance for customers. That said, now, with technological developments, customers can stay updated via SMS or email alerts. There are multiple advantages and applications of SMS technology for security and enhancing financial communication in this sector. Let us explore them in more depth!    

In today’s era, one-time passwords (OTPs) and messages are vital for ensuring security. Any order placed, shipped, or even a payment involves these two key elements. The sole purpose of this technology is to build communication between the seller and buyer, bank and customer, or related parties. For instance, if you made a payment of $30 for a dress, the bank, as well as the merchant business, will send a confirmation message for verification. This is how secure financial transactions are possible through SMS in banking. 

Overall, financial communication via messaging has also proved beneficial in enhancing customer satisfaction and engagement. Businesses can easily personalize transactional messages with customer’s name, order details, or relevant information for an engaging experience. Moreover, having a feedback mechanism with every transactional message can help them gather better customer insights for the improvement of their product. One such example is the post-purchase feedback form that brands ask you to fill out when you buy anything from their stores. 

SMS in banking has been key in improving customer experience and satisfaction in the industry. For financial institutions, SMS is a trust-building tool that connects with customers and helps in communicating relevant information to them. However, there are other advantages to this technology as well! Take a look at the following pointers to know about them: 

#1 - Sustained And Updated Communication

You will be surprised to know that 85% of the messages regarding one’s bank account are opened within 5 minutes of receiving them. If that is true, it is a sign that banks have successfully established a relationship with their customers. Account holders get constant updates on any transaction or queries raised within minutes. Additionally, banks can address issues concerning a financial product or the server through SMS for financial efficiency. 

#2 - Customer Education 

Apart from providing account-related information, educating customers about relevant financial knowledge is also important. It potentially helps banks to inform customers about ongoing banking frauds and how they can protect their funds from scammers or hackers. For instance, you may have received an SMS from your bank advising you not to download any random mobile-based application for banking needs.

In fact, you will find that this is a common SMS service for financial industries for adherence to standard protocols. 

Note that banks can also share some financial literacy tips on how to manage the funds in the bank accounts efficiently. 

#3 - Security Awareness

Since most customers conduct transactions online, the risk of fraud remains. With SMS, banks maintain a standard protocol of communicating crucial information with the explicit consent of the customer. This helps ensure the verification of all transactions. Moreover, customers can know their account balance after each transaction though this service. 

#4 - Smooth Financial Services Workflows

In today’s era, no financial transaction is complete without the OTP (one-time password) message. It acts as a two-factor authentication rule for every secure financial transaction. In case of a wrong OTP, the bank will detect an anonymous user trying to gain access to one’s account. Also, you will see, even on opening a new account or when onboarding new customers, an instant SMS message informs the user about the features and facilities they will receive in return. At the same time, any due date of a loan equated monthly installment or EMI can be communicated via this technology. 

#5 - Prevents Fraud

Frauds have been a common issue for financial institutions for centuries. However, the prevalence increased with advancements in technology. A report suggests that global transfer and banking transfer fraud is expected to rise to $48 billion by 2029. While fraud cannot be prevented, educating customers on the same for prevention is possible. 

Upon suspicious logins or failed attempts, banks can inform the user using SMS technology for security concerns. With this action, banks can avoid significant financial damage and protect customers and the institution.   

#6 - How SMS Saves Cost?

Operating costs are a common expense for every business or institution, and reducing them is the ultimate goal. Although financial communication via regular SMS incurs costs, financial institutions, by using the technology, companies can avoid the cost of hiring additional staff to address customer queries. 

With the use of SMS, banks do not have to make consecutive phone calls and inform customers of their account queries. Moreover, automation has made it more convenient to perform tasks like sending payment reminders, transaction alerts, and responding to account balance inquiries. 

In this ever-adapting technological world, SMS still owns a cornerstone for most financial services. Even a small payment or login is incomplete without this financial communication. By embracing its presence, many banks have moved one step ahead of its traditional uses and started addressing needs like security concerns, real-time updates, fraud prevention and many others. However, this is only the start of the futuristic evolution of financial communication. Over time, this SMS technology will help banks deliver superior customer experience and maintain efficiency in operations, likewise.