Can Asia lead the eStatement adoption evolution?

I was speaking to a group of banking people from fast-developing countries like Indonesia, India and Pakistan at a conference in Singapore last month. Their views on eBilling and eStatements were very similar - adoption rates for going paperless are still very low and they place the blame on low internet penetration. As a result, some banks are postponing eBilling implementation until there is a clear shift in the market towards paperless initiatives.

Recently however, Asia seems to leapfrog the West when it comes to technology adoption – consider mobile phone penetration compared to land-lines. This got me thinking whether the same will happen with eBilling? It seems very likely that Asia could lead the world in eBilling and eStatement adoption as the internet penetration explodes…

Default new customers to eStatements

The Asian banking market isn’t as saturated as it is in developed countries, so there isn’t the same legacy of paper billing to contend with. The massive growth in new banking customers however, provides a great opportunity for bankers to default them to eStatements.

Psychology also plays a role - Maslow’s Hierarchy of Needs (the premise that people must have their basic needs like food and shelter before they seek other things like luxuries and self-growth) works with modern day services too.

What comes first as a person starts earning enough money to enjoy more of the modern conveniences, such as mobile phones, computers, scooters, bank accounts and credit cards? What is the most accessible trapping of modern life? The answer is clearly internet access and an email address. Email provides vital connectivity and it’s generally free, thanks to Gmail, Hotmail and Yahoo.

Email is the common denominator

The question is: How many people registering for a new bank-account, taking out a credit card or using a post-paid mobile phone service already have an email address? Logically, it’s a huge proportion!

And whilst it’s certainly true that many developing countries have relatively low Internet penetration – e.g. 7% in India and 12% in Indonesia – they also have huge populations, so these percentages translate to 81 million and 30 million connections respectively. With the right strategy in place, banks can drive eBilling adoption to this connected group and realise ROI within a matter of weeks.

Steps to achieving your adoption goal:

In order to capitalize on this opportunity and improve eStatement adoption, follow these simple steps:

• Ask your customers for their email addresses at every touch-point.
• Make ‘email address’ a mandatory field on all application forms.
• Send out an eWelcome Pack – useful numbers, branch locations etc. via email to every new email address/customer you have; include lifecycle messaging in your online strategy.
• Make eStatements the default for all new accounts and use transactional messaging to further reduce paper communications.

The same processes will work in mature markets too, but developing markets have more ‘low-hanging fruit’ - a large number of new bank accounts.

Don’t let low Internet penetration figures delay the drive for eStatements – maximize returns with a clear focus and robust paperless adoption strategy.

And if you’re not sure how to develop that strategy, then give us a call.

When customers just won’t adopt

During the course of my business travels, I have been lucky enough to meet many different people from different cultures and a variety of Telco's, utilities, financial institutions and government departments around Asia. Some already have an eBilling platform in place (often a web-portal) and some are still investigating the option of developing/implementing one. But they all seem to have one thing in common - when I ask them about paper turn-off rates, either current or projected, they all look rather sheepish and start mumbling about "early days still" and "consumer adoption difficulties…"

The goal is to save money!

Let's get this clear from the start – The goal of any eBilling project is to save money! It may be sold as environmentally friendly and in some cases as a convenience tool, but organisations do this to save money. Total eBilling costs are typically 50%-80% lower than traditional mail. In the current, difficult economic climate, you'd assume that a detailed ROI analysis is done before any eBilling project kicks off - cost of project divided by savings on paper/postage.

Yet for in-house developed web-portals, I regularly see paper turn-off targets set at 3% for the first year, and even 5% over 3 years! In other words, a full-blown web-portal with detailed security and firewalls is being developed and implemented, yet 95% of the customer-base won't use it within the first 3 years. Well, there's nothing like setting your sights low…! And just how does that ROI analysis stack up? Lots of development costs today, in return for 3-5% paper-turn off over 3 years. It just doesn't add up.

When I mention that we have clients around the world, both in developed and developing countries, that have achieved 17% paper turn-off in 18 months and 60%+ paper turn-off over 5 years, that sheepish look returns with comments like "But it's different here in our country." Well, the fact is that it isn't different.

Beyond the technology, there needs to be a coherent adoption strategy

These results haven't been achieved due to some psychological propensity to eBilling inherent in certain nations or customer-bases, Striata has achieved these results, because it has 10 years of eBilling experience and has learnt from all the mistakes that in-house project teams are about to make. We understand that beyond the technology of eBilling, there needs to be a coherent adoption strategy across the organisation, supported by analytic tools that identify who is and isn't receiving and reading eBills. Cloud technology means that all this is available with minimal up-front investment and implementation timescales of weeks, not months.

It's about starting with the right ROI in mind

eBilling is a specialist area spanning technology, methodology and consumer psychology. And like any other specialist area, if you don't have the full skill-set in-house, it pays to call in the specialists. I mean, I'm sure you could fix your own car's broken gearbox if you spent enough time studying up on it, but isn't it quicker and ultimately cheaper to send it to a garage?

So the next time you're reviewing your eBilling capabilities go over your ROI calculations again. And ask yourself just what is your target paper turn-off rate for this year? If it isn't into double digits, give me a call…

Keith Russell
Sales Director - Asia Pacific
www.striata.com

What Paperless Adoption Rates Can I Realistically Expect?

The case for eBilling (also known as paperless billing) has been
described as 'compelling.' Then again, take-up rates have been described
as disappointing. Despite the many arguments for eBilling, the real
problem with mass adoption is customer reluctance to change, despite the
idea that eBilling saves the environment and saves money.

The definition of eBilling Adoption Rates is the number of customers that
request an electronic bill instead of a paper bill. If you have 100,000
customers and 20,000 of your customers request an electronic bill
instead of a paper bill that means you have achieved a 20% adoption
rate. The higher your adoption rate, the better the cost savings
achieved, since total eBilling costs are typically 50%-80% lower than
traditional mail.

There are six clear reasons why consumers do not turn off their paper bill:

1. Customer indifference: Doing nothing is the path of least resistance.


2. Enrolment: Registering at each website is a painful process.


3. Multiple biller sites: Too much effort to remember each process.


4. Convenience: Fetching my bill is less convenient than receiving it.


5. Presentment vs. payment: I can see what I owe, now how do I pay?


6. Mobile matters: I need to see more than just a summary.

From these reasons, it is clear that consumers are searching for convenience in their already hectic lifestyles, and so, the easier we can make their eBilling transition, the higher the adoption rates we'll achieve.

What methods do you use to achieve high adoption rates?

The most important consideration is not what technology is implemented, but how the consumer is treated during the conversion journey. Here are some considerations:

• Rollout Strategy: Develop detailed rollout strategies to ensure the desired adoption rate is achieved. This includes deciding on an opt-in or opt-out approach, whether to offer incentives or impose penalties and how to handle exceptions.


• Understand Your Customer Base: Carefully review the demographics of your customer base: What percentage are over 50 years old? What percentage of your customers use online banking and how does this compare to industry averages? What percentage of your customers live in rural areas? Understanding your base is critical to developing effective rollout campaigns.


• Consumer Education: It's important to agree internally WHY electronic billing is to be implemented. An environmental argument only has legs if it doesn't only address saving the rainforests, since paper generally comes from sustainable forests. Instead, address the fact that the paper industry is a major source of toxic chemical pollution, especially toxic solvents and chlorine compounds used to bleach and delignify pulp (The process of removing lignin – an organic substance binding the cells – from wood or non-wood fibres).


• Utilize all Existing Print Correspondence: The most effective way to spread the paperless message is to embed graphical marketing within your printed statements and on envelopes. This is very cost effective and has great results.


• In-Person Interactions: An employee/customer rewards program for signing up for electronic statements is a great way to get results. A few banners, posters, and employee buttons are all it takes to make this a great success.

In Conclusion:

There really is no simple answer to the question of what adoption rate can be expected when embarking on an eBilling campaign. In Striata's global experience across financial services, telco's and utilities, the average adoption rate for an online eBilling solution seems to plateau at between 7% and 12% over a 3-year period. However many of our clients are achieving adoption rates double, triple and even quadruple these figures in certain instances. The higher adoption rates are directly related to the ease of use for the consumer.

For more detail on how we simplify your customers' lives, please see The eBilling 'Push' Advantage .

Michael Haupt
Managing Director, Europe
www.striata.com