Transform the customer experience with instant issuance (part 2 of 4)
Instant issuance has been gaining popularity over the past ten years. What was previously a luxury has become a mainstream need with 55% of financial institutions predicted to be using instant issuance by 2021 .
The reasons why instant issuance has been gaining popularity were introduced in the series’ previous blog post. Those reasons include: the increased customer satisfaction enabled by instant issuance – especially in cases where customers lose their cards. The ability to provide cards on demand and use the technology as an opportunity to invest less time and money in lower-value transactions, and more into higher-value activities drives increased card activation and profitability. As well, as how instant issuance can deliver incremental interchange revenue.
Now, let’s examine instant issuance from the customer perspective – namely, how instant issuance is a transformative tool to enhance customer experiences.
Below are three ways instant issuance transforms the customer experience:
Providing the customer with a new card quickly after his card has been compromised
According to research conducted by Aite Group, 53% of bank customers were sent a new debit, credit or prepaid card from their financial institution in 2016 due to losing their card or fraudulent activity. How a financial institution reacts to this case can have a major impact on the customer experience.
Imagine losing your card, calling the branch, canceling your card and waiting for a replacement in the mail. Instead, imagine going to the closest branch and walking out with a brand-new card minutes later. Which scenario sounds like the better experience? Which scenario leads you to use that card sooner and more frequently?
The psychological impact of instant issuance is a major driver for its rapid adoption. Research by Aite Group uncovered that 18% of customers who had their card replaced because of loss or fraud were less likely to use their replacement card, and 6% changed their financial institution because of the experience . Customers may ultimately place blame on the financial institution for a compromised or even a lost card – but instant issuance can turn that experience into a positive bank interaction.
Letting customers take care of low-value transactions so that there are more resources to help them with high value activities
The branch of yesterday was one focused heavily on transaction-based activities, such as making deposits, withdrawing cash and cashing checks. The branch of today and tomorrow can enable customers to take control of these transactions, freeing up in-branch resources for higher-value activities such as cross-selling other banking products, providing advice and educating customers on self-service options that will improve their banking experiences.
Instant issuance is a transformational tool that recognizes the effect that instant service can have on a customer’s perception of their financial institution. Instantly issuing cards allows a branch banker to educate a customer on how to use online or mobile banking to do some of the same things they do in a branch today, such as make deposits, check balances, or set up the features of their account. Being in charge of transactions they can take care of with limited or no assistance put the customer in the seat of control, empowering them to explore other products and services available to them.
Meanwhile, implementing an instant issuance solution allows bankers to cross-sell other products showing teller transactions decreasing up to 3% year-over-year after its implementation .
Dynamically changing the perception of the debit and credit card so that they are used more
Debit and credit cards are often looked upon as static pieces of plastic – unimpressive to modern consumers. Of course, there are many aspects of debit and credit cards that are technologically advanced and instant issuance introduces a mechanism that heightens the sense of payment enablement surrounding the card. As a result, instantly issued cards seem to have the impact of making them more desirable to use in the modern world.
Cards are activated a much higher rate when issued instantly, and they are used more often. Aite Group’s study revealed a 32% discrepancy in activation rates in cards that were instantly issued (82% activation rate) versus those that were mailed (50% activation rate). As well, this research showed that the number of days to the first use of card is ten days faster for cards that are instantly issued . For every additional day a customer can use the card, the financial institution sees incremental interchange revenue – all adding value to the bottom line.
As an added benefit, financial institutions can reduce costs of mailing out cards, as well as maintain a higher degree of profitability by not sinking revenue into cards that are printed and mailed out but never received or never activated and used.
Instant issuance has an impact on customer experiences
We see this impact in the changed behavior described in the statistics above. Part three of this series will dive deeper into how the proven impact of instant issuance on customer behavior can enhance how financial institutions meet strategic business objectives and is a viable tool to increase profitability, customer satisfaction and sustain portfolio growth.
NEXT: UPDATE YOUR BUSINESS STRATEGY WITH INSTANT ISSUANCE
1 – ‘Instant Issuance: U.S. Current State Assessment’, AITE Group, 2017