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.

Lessons learned from Citibank's data breach

Earlier this month Citigroup's credit card portfolio was hacked by criminals who apparently exploited a flaw in the browser window. This enabled them to go from one account to many others, capturing names, account numbers, emails and transaction history for roughly 360,000 customer accounts. The Ponemon Institute estimates the average cost of the data breach at $214 per compromised record, or $77 million in Citibank’s case.

Other recent high profile breaches include Sony Online Entertainment (over 100 million records) and Epsilon (they won’t say exactly how many). According to DATALOSSdb; breaches whether through hacking, loss of records or even theft of snail mail are occurring on a daily basis, and it’s not only large organizations that are targets. This month’s list includes banks, insurance and healthcare providers, utilities, government and educational organizations as well as supermarket chains.

“Growing concern about paperless” for consumers

What does this mean for businesses? It indicates that the threat of a data breach is extremely real and should be taken very seriously, but also, it requires companies to address customer concerns about doing business online. A growing fear among “paperless” consumers (and those considering eBilling) is “what if my online account is hacked, changed or deleted and I have no record of my usage or bill pay activity?”. One consumer advocate suggested that we all go back to receiving paper statements in the mail. That way we have tangible proof of all recent activity and payments.

But is going back to paper statements really a viable solution?

It’s an extreme theory, but one that resonates with some people. One of the biggest points of resistance to going electronic is that customers feel they are losing control over their bill or statement. Those that do access bills online complain that in order to manage their many accounts effectively, they need to visit each biller’s website and print or download a PDF copy of their statement from each one. Surely this is more hassle than waiting for the mail to arrive?

Winning the battle against customer resistance with robust technology

Delivering an encrypted copy of each statement directly to the customer’s email inbox is the most applicable solution in the market today. Regardless of what happens online, customers can print or save (in an encrypted format) a complete history of their relationship with their bank or biller. With its additional security features, such as including an authentication section at the top of emails and email personalization, the customer’s fears of phishing are alleviated. Customers can also decrypt, view and save documents offline, which reduces security threats of malware and spyware.

Distributing your billing / statement information to email inboxes, rather than consolidating all history and activity in one place, may serve to dilute the threat of criminals looking to hack your eBilling portal. Just as important, is winning the battle against customer resistance to going paperless, especially in the wake of increasing concern over data breaches.

Don’t let other companies’ data breaches reduce your eStatement adoption

The answer to customer’s fears of losing control over their documents is to “deliver” a tangible electronic copy of everything you send to your customers today in a more secure format than paper mail or online presentment – an encrypted attachment to an email.

Push the documents to your customers and all resistance will crumble.

Saving trees – killing the Post Office

Canada Post employees recently went on strike – after two weeks and with no end in sight, companies in Canada are using this opportunity to migrate customers to eBilling at a rapid rate. Although the driver here is actually hard cost savings, the outcome is that there will be even less paper bills and statements and hence less revenue for Canada Post, resulting in more cut-backs and downsizing. Talk about shooting yourself in the foot.

The centuries old postal system is under significant threat – but is that our problem?

Death of an institution

In the last five years, the US Postal Service has seen its mail drop by 43.1 billion pieces. No business can survive such a radical drop in demand for its services and hope to continue business as usual.

In the UK there is constant talk about privatising the Royal Mail. In fact, this has been going on for years, with downstream access already doing the bulk sorting and distribution for thousands of businesses.

What the post office always had was a monopoly on the last mile. No-one else wanted to have the headache of employing feet on the street, but the internet has created an entirely new delivery mechanism that is fast replacing traditional print and post. Of course, the consequence of this is the constantly declining volumes of corporate mail and the reality of a shrinking business model.

Every business knows that when faced with declining revenues, you need to reduce costs and cut your cloth accordingly. I guess the unions (in the case of Canada Post) and thousands of people involved in post office business models make this a difficult process.

Luddite behaviour

Unionised post office workers are the 21st century equivalent of the Luddites; their strikes are the modern day equivalent of destroying the mechanised looms that put them out of work. However, as with the Industrial revolution, there is a fundamental change afoot. Any industrial action by post office workers plays into the hands of eBilling companies and once the ‘genie is out of the bottle’, it’s hard to get it back in again - very few people go back to paper once they move to eBilling.

Post Offices around the world are reviewing their business models (we see their consultants on our website every week.) Bills and statements, once the mainstay of postal volumes, are rapidly moving to electronic delivery. For the post office to reinvent itself, it will need to embrace the connected world we now live in. It’s getting some help from ecommerce - home delivery of purchases (a possible future headline - “Amazon saves the post office”?) But is that enough?

Spare a thought for the postman

When considering eBilling, we weigh up environmental and costs savings vs. paper production and cost of distribution. The fact that the post office is now a shrinking business model is proof that many more businesses are realising the benefits and ROI associated with eBilling and are actively migrating customers from paper to electronic documents.

So while you enjoy the eBilling benefits of instant delivery, one-click payment, soft copy storage, interactive sorting and graphing and consequently saving a few trees, spare a thought for your local postman, his job is under threat. But as the cliché goes – it’s not personal, it’s just business.