Mandates for proactive engagement are perfect catalyst for card issuers

Visa and Mastercard are redefining the fight against payment fraud. Within the next nine months, card issuers will be required to offer their customers proactive transaction alerts. To reduce the level of fraud on credit and debit card accounts, it’s critical that banks prioritize effective communication over simply checking the box to meet the new mandate. Financial institutions who embrace the spirit behind these requirements – greater communication and collaboration with customers – will be well positioned to gain share as customer expectations for more personalized service continues to grow exponentially.
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Meet the Visa and Mastercard mandate for card transaction alerts and build a foundation for growing and maintaining market share

To enhance payment security and reduce fraud, the two largest payment card networks have instructed the banks issuing Visa or MasterCard branded credit and debit cards that they must give cardholders the option to register for alerts related to any transaction on their cards. The deadline for Visa issuers is October 14, 2016. MasterCard issuers have until April 21, 2017.

While issuers are required to make an alert service available, it will still be up to cardholders to opt-in to receive them. To comply with the mandate, issuers may build their own email and text alerts service, offer one from their transaction processor, or use the platform provided by each of the card networks.

Banks who prioritize doing what’s easy today – defaulting to communicating via a third party platform – run the risk of creating yet another silo of communication and miss an opportunity to lay a foundation for more personalized engagement with their customers. As digital natives become a larger percentage of a bank’s customer base, proactive automated interactions about available products and services will be essential to maintaining market share. Implementing an intelligent omni-channel alerts solution now will drive better results against fighting payment fraud and lay a strong foundation for future transformation. Here’s how:

 

Better text alerts

Many alerts will be routine confirmations of authorized transactions, but if a cardholder doesn’t recognize a purchase, a dialog will almost always ensue. If that requires the customer to speak with a fraud specialist, the conversation will cost the issuer an average of $4.33 cents, according to a study by Strategic Contact.

To avoid this expense, issuers should leverage Conversational Text messaging that creates an intelligent automated exchange on this popular communication channel. Unlike traditional text messaging solutions, Nuance leverages advanced natural language understanding (NLU) to quickly grasp the words and meaning behind the typed message and sophisticated dialog capabilities to carry on a conversation that can provide clarification and resolve issues.

Check out this video example of how Conversational Text can intelligently automate a conversation, providing answers and guiding customers to a resolution.

 

Text-based alerts must comply

The Telephone Consumer Protection Act (TCPA) requires the prior express consent of a consumer to communicate with them on their mobile phone using any form of assistive technology such as predictive dialers, application-to-person text or prerecorded voice messages. Even though the cardholder will have opted-in to these communications when they enable their card transaction alerts, there is still a risk under the TCPA.

An estimated 100,000 mobile numbers change hands every day, moving from one consumer to another as they chase the latest smartphone deal or better rate plan. If a cardholder forgets to tell his issuer that he has a new mobile phone number, his alerts will start going to the consumer that was reassigned his old mobile number and who never consented to getting such messages. If the non-customer sues under the TCPA, each of those errant messages after the first one can cost the bank $500. That can escalate to $1500 per message if the bank failed to honor requests that they stop sending them.

To avoid this, banks should implement their alerting service through a provider – like Nuance – that understands compliance with the TCPA, and can automatically stop texting consumers who reply with key words like STOP and QUIT or even just “I don’t want to get these alerts anymore”. Using a system that recognizes and acts on both types of opt-outs, banks can banks can reduce their TCPA risk.

 

Email and text alerts alone are not sufficient

With the near-universal adoption of the internet-enabled mobile devices, there is a tendency to think that communication on digital channels such as email or text alerts will reach all cardholders. But there is a segment of the population that are not consistently reached with these channels: senior citizens.

Although many members of our “greatest generation” own a PC and a mobile phone, their usage habits are more sporadic than digital natives. Many only access email or text when they want to communicate and miss important inbound messages in the process. Unfortunately, seniors are also the most likely to be targeted by the scam artists and identity thieves that the transaction alert service is meant to protect them from.

In order to alert these older customers about suspect transactions on their cards, issuers must reach out by phone. They can make that call the old fashioned way, but assigning a contact center agent to the task is very costly. A better alternative is to leverage an omni-channel solution that in addition to email and text messaging, can also deliver an interactive voice message that’s easy to understand and interact with – one that’s designed specifically with seniors in mind.

The mandate from Visa and Mastercard for more proactive engagement, could be the justification many card issuers need to transform their customer communications. Don’t miss the opportunity to educate your organization on the options for intelligent automated outreach that meets the increasingly high bar set by consumers. Key considerations include the ability to:

  • Orchestrate multiple channels to work in unison to improve reach and engagement
  • Provide options for immediate response and two-way dialog
  • Extend the context of the conversation from one channel to another, e.g. between text messaging and the IVR
  • Personalize the engagement via known preferences and account information
  • Industry leading data security and compliance controls

At all costs, avoid meeting the mandate by creating yet another silo of interactions that occur without the context of the breadth and depth of the customer relationship.

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Brian Moore

About Brian Moore

Brian Moore, senior principal, industry solutions of Nuance’s Enterprise division, brings more than 30 years of experience in financial services, mortgage and collections operations and technology to the company. He is also our resident compliance expert, advising companies on the TCPA, FDCPA, TSR and other regulations impacting customer engagement.