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How Banks Can Use Two-Way SMS Effectively

By Tom Sheahan

AAs banks seek to earn the business, trust and loyalty of more people, bank leaders must consider ways to differentiate themselves from the increasingly crowded marketplace of banks, financial institutions and fintech providers. Improving customer service options is an important way to stand out from the competition while genuinely serving customers.

According to a precedent State of Microsoft Global Customer Service Report, nearly 70% of respondents are positive about brands that engage in proactive customer service. Customer service, which can be hard to come by for other financial entities, can be the cornerstone of bankers’ sales and marketing plans.

Texting has gained momentum in banks in recent years for good reason. According survey results according to, Americans check their phones 344 times a day. Banks can take advantage of this by using SMS in a new way that allows people to meet where they already are, on their phone). Rather than just talking to your customers with one-way texting, open the conversation to talking with your customers using two-way texting.

Running a successful two-way texting initiative takes a little more consideration than planning and sending one-way communications. Here are six best practices to keep in mind to ensure that two-way texting benefits both your bank and its customers.

1. Assign a local SMS number to each branch or market. When it comes to choosing a financial institution, bank branches have one major advantage: they are local. Customers will also want to text someone who is local. When using a business SMS service, you can usually request a dedicated number in your area code. If you have branches in multiple cities, get dedicated numbers for each of their respective area codes. It’s the best way to promote that local presence without relying on employees’ personal phone numbers for texting (which should be avoided at all costs).

2. Keep the phone number consistent in all communications. Make sure the text messaging software you select enables something called a common inbox so your staff can connect and respond to customers from the same number to avoid customer confusion. This dedicated number will also give customers the option to store the number in their phone so they can text it again in the future. You can safely post this number on sites such as your website and your Google business listing without worrying that it will become outdated. Some providers change customer phone numbers every month or so, which should be avoided for consistency.

3. Assign qualified staff to manage conversations. Banks will want to assign at least a few people to manage the two-way texting initiative and adjust as needed based on the frequency of use by customers. Some software will allow administrators to set up two-way SMS from a mobile device or computer, adding even more convenience and ability to respond to customers.

4. Respond in a timely manner. Speed ​​matters in texting. This is also one of its major strengths. According to research from OpenMarket, 83% of millennials open SMS messages within 90 seconds of receiving them. It’s safe to assume they expect the same kind of speed from business texting. Thus, bank managers will want to ensure that text messages received from customers or prospects receive a quick response. Ideally, this means that messages are answered within minutes, and up to an hour after receiving the text should be the absolute longest accepted. If there are times when staff cannot respond (likely when the branch is closed), set up an automated message that lets people know when they can expect a response.

5. Keep private information away from text. As with one-way text messages, avoid sharing private information. Banks can use text messages to tell someone about something related to an account, but they shouldn’t share account details, such as balances and personal identification information.

6. Make it easy to subscribe and unsubscribe. Give customers the option to sign up to send SMS when they create a new account. For existing customers, invite them when they log in to their accounts. Just as important as the opt-in is the opt-out. On all initial outgoing messages, include a phrase such as: “Text STOP to unsubscribe”. If a customer initiates the text or if the bank replies in a chain of messages to the same customer, the messages do not need to include the opt-out language each time, although the bank must still authorize the recipient to use the opt-out (STOP) to block the number or unsubscribe from the SMS list at any time.

Consider two-way texting as an alternative to emails, chat boxes, and phone calls. As more people turn to texting as their preferred form of communication, business-to-consumer texting is growing at a faster rate than email and phone calls. According Juniper Research, businesses sent a total of 2.7 trillion text messages in 2020, up 10% from the previous year. With two-way texting, customers can choose their preferred mode of communication, giving them the individual attention they expect from their bank.

Now that some best practices have been defined, let’s explore how two-way SMS can be used within banks.

Consider texting back and forth to:

  • Schedule and confirm appointments with loan officers and other banking professionals.
  • Notify people of account overdrafts. (But invite people to securely log in to their account for details – don’t share transaction details via text.)
  • General questions from the public. With two-way SMS, people can text the set number to ask about vacation hours, banking, and more, even if the bank didn’t text them first.

There are many reasons to use two-way SMS, and it’s important to note that customers will determine exactly how the service is used at a particular bank. Once secure two-way texting capabilities, let customers know about this new customer service feature that gives them faster and more convenient access to local bank employees who are ready and happy to serve them.

Tom Sheahan is the CEO of red oxygena business SMS solutions provider that works with banks in the United States and beyond.