The popularity of real-time text communication has grown steadily over the last 20 years and is now the preferred method of communication with friends and family. Consumers appreciate this convenience and naturally expect similar capabilities when communicating with their financial institutions.
While there are many embodiments of real-time text available, mobile messaging apps have emerged as clear favorites over SMS texting in consumer space. Due to security and compliance considerations, real-time text communication with financial institutions often takes two forms: live chat and mobile messaging. They’re not the same thing, but they’re often confused in conversations with community bank executives. I wanted to provide a bit of distinction and discuss the advantages that messaging provides over chat in the context of financial advice.
Chat is typically a functionality of the bank’s website; it is anonymous and session based. To start a session, customers typically can click on a chat bubble in the corner of the website; once in progress, they can ask questions, and sometimes complete transactions. Sessions typically last a few minutes and require customers to stay on the same web page and/or keep checking the page to keep the session alive. If that doesn’t happen, the session ends and the customer must start over — the equivalent to a phone call dropping.
Since chat is anonymous, customers typically need to go through an authentication process to have any questions answered, which can take up a few minutes of both the customer’s and the bank representative’s time. Future visits require the customer to repeat the authentication process, resulting in ongoing effort for both parties. And customers don’t receive a record of previous chats unless the bank emails them a transcript.
Messaging, on the other hand, is authenticated and designed to be a long-term asynchronous exchange that is much better suited for persistent interactions — like the ones customers have with their financial institutions. Here are the seven advantages of messaging compared to chat:
- No repetitive and mundane authentication process. Messaging occurs most often behind a login page that authenticates customers. This removes the need for a verification process before every interaction, saving significant time and frustration.
- Biometric authentication. Biometric capabilities on most phones allow for instantaneous and convenient authentication.
- No active waiting. Messaging doesn’t require that customers actively wait for a response from the bank representative; inversely, bankers don’t need to wait for a response from the customer. Messages can be sent whenever is convenient for the user, not just when the other party is available, and they can work on other tasks after sending the message. Receiving a response generates a push notification, allowing for seamless access to the response.
- Preserved context. The conversation history can be stored and displayed on both ends, so customers don’t need to repeat themselves and/or remind representatives about previous discussions.
- Cross-device portability. The authentication process allows for a consistent experience and shared history across multiple platforms, like mobile or online banking, as well as new mobile devices.
- Easy multimedia integration. Messaging makes it easy to share images and video files, and camera and speaker/microphone access allow consumers to share richer content.
- Personal engagement. With messaging authentication, bankers can find and use more information about the customers without having to verify their identity upfront. Nothing makes customers feel more known than remembering their name.
Chat was a product from a time when customers did not have mobile devices and internet access was limited by time and volume. It is still helpful in situations where short, anonymous interactions make sense, like answering general questions about products and services.
However, messaging is superior for more complex and important tasks, like dealing with personal finances. Messaging has evolved with the proliferation of mobile devices, making it an easy compliment for modern, fast-paced lifestyles. Customers prefer it because it reduces their effort, requires less-active waiting and offers near-ubiquitous access. For banks, asynchronous support and reduced process overhead leads to more efficient service and allows representatives to focus on the most important aspects of the interaction: how to best help the customer.
So if your institution is considering adding chat functionality to your service offerings, consider leap-frogging and going straight to messaging.