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As the world transitions from desktop computers to mobile devices, banks and credit card issuers are turning to a powerful new tool to communicate and interact with their customers: push notifications.
Push notifications are the messages that pop up on your smartphone after you've downloaded an app, even if the app is closed. You may already get them from social media sites, games, your calendar or other apps. Unlike text messages or emails, push notifications are sent through your phone's operating system and typically show up in a banner at the top, on your lock screen or in your "notification tray."
Even though banks have only recently started using push notifications, experts predict they will soon become one of the top ways your financial institution will communicate with you.
"We're very bullish on push notifications because they give banks a quick and easy way to engage and interact with their customers," said Ian Benton, a research specialist at Javelin Strategy & Research. "The big banks are leading the charge on this, but it's growing very quickly. It's just a matter of time before all the banks will be offering them."
A Javelin report in April 2015 found that 9 of the top 20 financial institutions in the U.S. were already using push notifications, along with many smaller ones. The report predicted that in five years, all 20 top banks would be sending notifications, and that notifications would surpass text messages as the No. 2 form of financial alert by 2019. (Email is No. 1.)
However, the Javelin study found that only 14 percent of consumers are currently getting push notifications from a financial institution, even though 45 percent said they would be useful. That's partly because banks have been slow to adopt the technology, Benton said, but it's also because banks aren't doing enough to make it easy for users to sign up.
"A lot of people are getting notifications from social media but they don't even don't even know banks are doing this," Benton said. (See " How to sign up for bank alerts on your cellphone .")
Companies like notifications because they engage customers. Those who receive push notifications from an app use the app about four times more often than those who don't, according to a May 2015 study by Urban Airship, a company that provides services to app developers.
But push notifications also offer advantages for customers, especially if they're from your bank. The same Urban Airship study found that push notifications from finance apps drew some of the highest response and engagement rates from customers, when compared to notifications from other types of industries.
6 reasons to use push notifications
Here are six reasons experts expect notification use to rise, along with the benefits they offer for both you and for your bank:
Push notifications' future
Some technology observers predict that push notifications will one day be the main way we interact with our apps, so that we will rarely have to click on an app to use it.
Push notifications aren't perfect, however. If financial institutions aren't judicious about which information they choose to send, customers may start to consider them spam and opt out. It can also be tricky to go back and find push notifications later, and alerts can get lost among all the notifications from other apps. That could be a problem if your bank sends a fraud alert via a push.
"Consumers are telling us they don't necessarily want to completely get rid of text messages," Benton said. "That may be where you want to get fraud alerts because you know you'll pay attention. But if you simply want to be notified every time someone uses your card at a gas station or for transactions above a specific amount, that's perfect for a push notification."
See related:6 ways to safeguard cards when shopping electronically , Poll: Fraud alert false alarms common
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
