Across all industries, the digital revolution has reshaped marketing and sales, greatly influencing consumer behaviors and modernizing the art of effective engagement. With personalized service, convenience and ease now more important than ever, mobile communications have become essential to consumers’ everyday experiences – and are key drivers in their decision-making process.

As mobile communications become increasingly integral to the daily lives of consumers, banks have the opportunity to craft personalized experiences within the digital channel, ultimately deepening those banking relationships while positioning themselves as account holders’ primary institution. The question now for many bankers is whether tools like push notifications and in-app messaging are in fact a powerful conduit for high-touch, high-value interactions, or seemingly intrusive and easily ignored?

The impact and efficacy of push notifications

Service-oriented notifications have proven to be widely accepted by consumers. Between promotional offers, reminders about bank balance limits and the rising popularity of Buy Now, Pay Later (BNPL) installment alerts, these interactions are designed to enhance the user experience by keeping customers informed and engaged. As a result, both the finance and insurance sectors maintain high push notification opt-in rates, with Android users as high as 95% and iOS users reaching 73%.

Tapping targeted data like customer insights and location-based geofencing enables banks to elevate their services beyond basic messaging. By providing concierge-style service alongside timely, relevant offers, many banks are realizing meaningful results with hyper-local, hyper-personalized push notifications. These messages can range from simple time-saving tips (like suggesting a nearby branch or ATM with shorter queues) to detailed, personalized loan offers for customers who may be shopping for new vehicles while they are at local dealerships.

Leveraging geofencing and unique consumer insights allows banks to create precisely targeted offers, matching high purchase intent locations with factors like credit scores and loan pre-approvals. This approach ensures recipients receive the right offers at the right time, fostering a seamless and personalized experience when they need it most.

Demystifying the risk around push notifications

The challenge for bankers is in finding the right balance as misusing push notifications can damage an organization’s reputation with their customers. Consumers tend to lose faith and tune out businesses that bombard them with needless alerts and sending irrelevant or incessant messages can – and often does – result in lower opt-in rates. Studies indicate that in the U.S., 42% of smartphone users will change their notification settings if overwhelmed by excessive push notifications, and 39% will disable all notifications from an app entirely.

While privacy concerns deter some businesses from using location-based notifications altogether, research shows that 70%-80% of app users are willing to grant these permissions to trusted businesses that share transparent and valuable offers. Geofencing, which is also conflated with privacy issues, actually protects consumer rights by allowing users to opt in or out and by tracking their location only within clearly defined and approved areas.

Adding value with in-app messaging

In today’s mobile-first environment, effective communication hinges on selecting the right timing and delivery method. While push notifications are crucial for capturing customer attention, in-app messaging offers a more nuanced and thoughtful approach to user engagement.

In-app messages are ideal for important but not necessarily urgent communications. They appear when users log into their mobile applications, taking advantage of the moments when users are already focused on their banking needs. Because users are more likely to engage when their mindset aligns with the content, this makes in-app messaging a perfect channel for delivering value-added content like digital adoption and financial wellness tips.

During the onboarding process, in-app messages provide guidance to customers while helping banks maximize their mobile app’s potential. Upon logging into the app, these messages can lead users to complete specific tasks that enhance their engagement, such as implementing alerts or signing up for eStatements.

When it comes to pursuing high-priority or urgent requests, pairing push notifications with in-app messaging offers a more effective, strategic approach to reaching the customer. For instance, if a customer completes only a portion of a loan application within the app, a push notification can serve as a gentle yet timely nudge to finish the application.

Unlike push notifications that require users’ explicit permission to receive messages, in-app messaging does not necessitate opt-in – as long as the user is active within the app, they will see these messages. These messages remain accessible until the user logs in, increasing the chances of being seen and read. This helps banks ensure communication does not go unnoticed even if the notification is not immediately addressed, while also alleviating the risk associated with sending too many push notifications.

The need for feed

Both in-app and push notifications have proven effective at capturing users’ attention and sparking interest in offers and services. However, most financial decisions typically require careful consideration and do not happen instantly among customers.

Because notifications are temporary by nature, this can make it challenging for customers to revisit the information they contain. To address this, banks should provide a dedicated, easily accessible newsfeed within their banking app that houses all communications and can be reviewed at any time.

With a dynamic, scrollable list of personalized updates presented in sequential order that customers can easily browse through, banks can deliver a familiar and modern user experience. This ensures users can always go back and find the information they need at their convenience and without it disappearing.

The art of effective mobile communications

Mobile communications, like any influential tool, can generate both positive and negative effects for bankers depending on how the institution uses them.

Personalization is fundamental to effective communication in these channels and should go beyond simply using the recipient’s name, instead including customized messages and offers that reflect the individual’s specific preferences and behaviors. To build and maintain strong, positive customer relationships while ensuring messages are well-received and effective, banks should consider the following:

1. Transparent communication: Clearly define the purpose of your communications to avoid any perception of invasiveness, highlighting the use of customer data to deliver personalized services and offerings.
2. Conservative frequency: Limit communication to avoid overwhelming the recipient and ensure that only important, timely messages that benefit account holders are sent.
3. Relevance and value: Ensure every notification or message is meaningful and beneficial to the customer, providing content that is of genuine interest and use.
4. Explanation of data usage: Provide explanation of how data will be used and stick to the terms agreed upon.

With 8 out of 10 consumers preferring a completely digital banking experience, fewer people are visiting the bank branches in person. As such, bankers can use digital channels to continue having individualized and direct communications with customers, preserving a sense of closeness akin to the personal touch of traditional branch services.

The ability to build a data-based portrait of your customer, paired with leveraging insights into their unique behaviors, is necessary to recommend additional services throughout the lifetime of the banking relationship. By nurturing well-informed customers and offering tailored content that match their specific needs, banks can deepen relationships with account holders while positioning the smartphone as their primary, and preferred, way to interact with their institution.

Sarah Martin is the CEO of Pulsate.