Why don’t banks pay me for going paperless?

Why don’t banks pay me for going paperless?
I recently stayed at a Sheraton in London. On arrival I was intrigued by a card that offered me 500 points for not having my room cleaned.  This was a different approach than the old, and not particularly effective, exhortation to hang my towel if I wanted to save water – in that scenario, there was nothing in it for me but the potential for some vague good feeling.  But this – this was real, this gave me something that I valued.  So I opted to go without my room being made up for two nights, was 1000 points the richer, and the hotel saved on labor, detergent, water, and the like.  It was a true win-win situation.  When I remarked on it when checking out, the clerk said that the initiative was only a couple of weeks old, but had received very favorable responses.  Count me as a fan! What’s the analog for banks and other senders of paper statements?  The plea to go paperless.  We’re told it’s green, and might reduce the risk of identity theft.  But I know that the bank will save a lot of money by not sticking that statement in the mail (in round numbers, 50 cents per customer per month).  So why not just offer to split that (relatively small) amount with me, or offer some other incentive?  When added to those other worthy reasons, it might be enough to tip certain customers over the edge of going paperless.  The goodwill it generates will certainly help from a marketing perspective.  And finally, it’s a great example of a win-win for the bank and its customers. I love to ponder why we do what we do.  The rapidly evolving world of behavioral economics is particularly relevant to financial services, and I’ll be exploring on an ongoing basis some of the lessons that banks can draw from this emerging field.  If you’ve got your own interesting examples of changing behavior, let us know.
Dan Latimore About Dan Latimore

Daniel W. Latimore, CFA, is the Senior Vice President of Celent’s Banking practice and is based in the firm’s Boston office. With a wide range of experience in industry and as a consultant, he brings examples from outside financial services to help banks improve their customer relationships, with a particular emphasis on the importance of technology and culture.

Dan's coverage areas include the banking ecosystem, digital and omnichannel banking, and innovation. He has a passionate interest in behavioral economics and exploring why consumers and humans make the decisions they make, and what the implications are for banks.

Dan has been widely quoted in the press, including the Wall Street Journal, American Banker, Boston Globe, CNBC, and CNBC Europe. He is also a frequent speaker at industry conferences and client gatherings, having addressed audiences ranging from intimate meetings with CEOs and central banks to keynote conference speeches in more than a dozen countries.

Prior to Celent, Dan led research groups at Deloitte and IBM, worked in industry at Merrill Lynch (where he lived in New York, Tokyo and London) and Liberty Mutual, and was a consultant at McKinsey & Co.

Dan received a Masters in Public Administration from the John F. Kennedy School of Government at Harvard, and an undergraduate degree from Dartmouth College. He holds the Chartered Financial Analyst designation from the CFA institute.

Comments

  1. In India, my broadband service provider gives me 1% discount on my bill for e-bill.

  2. Dan Latimore Dan Latimore says:

    Great example, Sumit! Any others (especially in a non-US context)?

  3. Chase is now paying $5 for signing up for paperless statements. It appears to be a one time payment. Not very compelling, but a start.
    https://www.chase.com/ccp/index.jsp?pg_name=ccpmapp/smallbusiness/business_banking/page/bb_ppls_sec&ID=0000008505&AD=%7C%7C%7C34329%7C%7C%7C

  4. Kasasa providers do! Community banks & credit unions who have Kasasa accounts give their account holders incentives to do things that both make and save the institution money (like getting e-statements, using online banking, using their debit cards). It’s baked right into the account so when the account holder helps the bank/credit union, the institution turns around and shares that benefit with them in the form of awesome rewards like really high rates, cash back, donations, money to save, etc.

    I wrote a blog post last year explaining the win-win scenario if you’d like to read more: https://www.kasasa.com/blog/2012/04/faq-kasasa-account-benefit.html

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