Despite push for 'paperless' business, paper use on the rise
By Glenn Wheeler
Highlighting the value of “going green” with paperless statements, online payments and other electronic services is proving to be an ongoing challenge for financial institutions.
For years, financial institutions have attempted to build “paperless” relationships with their customers, touting the convenience, cost savings, and operational and environmental efficiencies of “going green.” Today, that effort appears to be losing some momentum, as paper usage is on the rise.
Growth in online banking, bill pay has stalled
The recent study, “9th Annual Online Banking and Bill Pay Forecast,” by Javelin Strategy & Research1 indicates online banking has reached its saturation point among consumers, while online bill pay has declined for financial institutions and billers. At the same time, many banking customers who elect to receive electronic statements never cancel their paper statements.
Similarly, nearly half of credit card customers use online bill pay, but nearly 85 percent of those customers still receive paper bills and statements, requiring credit card companies to manage paper and online billing for most of their customers.2
Education, incentives help eliminate paper use
Changing customer behavior and expectations remains an important component in reducing paper usage. Financial institutions can encourage their customers to eliminate paper statements and other paper-intensive services through better education and incentives, suggests PayItGreen, a NACHA (the electronics payments association) initiative devoted to reducing paper consumption:
• Rewards. Some companies offer incentives for switching to electronic services, such as sweepstakes promotions and email and text alerts. Customers are generally responsive to these efforts, as nearly 40 percent of respondents polled in a March 2011 Javelin survey said they would cancel paper services if offered better rates, discounted fees or other offers.3
• Security. Many financial institutions encourage their clients to take advantage of the security benefits of paperless transactions. For example, electronic statements can’t be lost or stolen from a customer’s mailbox. Similarly, check fraud is less of a worry for customers who switch from paper checks to online bill payments.
• Opt out. Rather than making customers choose to receive electronic (vs. paper) statements, some financial institutions require customers to opt out of electronic statements.
While limiting paper usage delivers important environmental and public relations benefits, it also can boost a financial institution’s bottom line. For example, eliminating paper statements alone can reduce costs by approximately 50 cents per customer per month, according to the Javelin study.
Converting customers who are most comfortable with traditional paper-based banking transactions to electronic banking services requires an ongoing effort. Viewpointe supports the positive environmental and operational impacts of choosing electronic payments, bills and statements. We are an official member of NACHA’s PayItGreen program and a distributor of the PayItGreen Seal of Approval for businesses.
Working with member companies, institutions can reduce paper and leverage proven marketing programs. The PayItGreen coalition can help companies save money, streamline processes and promote environmentally friendly initiatives.
To learn more about Viewpointe’s services, contact us at info@viewpointe.com.
About the Author
Glenn Wheeler is President, Viewpointe Clearing, Settlement & Association Services. He has extensive banking experience.
1“9th Annual Online Banking and Bill Pay Forecast: Megabanks Dominate MoneyhawksTM While Paperless Adoption and Online Bill Pay Stall”
2According to 3I Infotech, a payment processing services company, as reported in creditcards.com, January 10, 2011, “Issuers use incentives to push paperless billing.”
3Bank Technology News, August 12, 2011, “Banks Use More paper Despite E-Statements’ Popularity.”