Banks often passively nudge customers toward choosing digital statements rather than forcing the issue. But when Citigroup recently took a harder stance against hard copies, the bank caught flak in the news and on social media.
In late October, the bank started piloting a program with a segment of what it calls "digitally active" credit card and retail bank customers who were not yet enrolled in paperless statements. It delivered three notifications online or in the Citi app that instructed users to authorize delivery of paperless statements. If customers didn't, they would lose online access to their accounts. The move quickly drew attention, including
Customers could revert back to paper delivery immediately and keep digital access to their accounts intact. But the damage was done.
"It was the right effort, wrong words," said Emmett Higdon, director of digital banking at Javelin Strategy & Research. "It sounded punitive."
The paper vs. digital tension isn't new but continues to linger as some consumers maintain old habits and the pressure for banks to trim expenses is intense — especially late in the year.
"It's the time of year where you're looking at how things are trending in the fourth quarter," according to Higdon, who said he has fielded phone calls with three of the 10 largest banks in the past few weeks about their paperless approaches.
A 2017 report from Javelin estimated that large banks could save $174 million annually from "intentional double dippers," or those who knowingly receive both paper and digital statements, and another $112 million from those who receive both but are seemingly unaware of the digital option. Regional banks, community banks and credit unions also could save tens of millions of dollars from these same customer segments, the report said.
Getting consumers to switch to electronic statements is difficult but there are a few strategies credit unions can try to encourage them to go digital.
To ensure the switchover goes smoothly, banks need to tweak their messaging and target the right segments.
"Most banks don't care about the hardcore paper person who just wants that paper copy because they are in the vast minority," said Higdon. "Banks want to correct their past mistakes when they allowed tens of millions of consumers to get that PDF statement without turning off the paper statement."
Customer-friendly incentives are crucial for encouraging change, said Chris McGee, a managing director at management and technology consulting firm AArete. Those include printing a QR code on paper statements for easy conversion to digital, or dangling a fee reduction, rewards points or other type of bonus when a paper-preferring customer calls or visits a branch.
"The long-term benefits for banks of moving to paperless far outweigh giving a small incentive to customers upfront," he said.
McGee divides people with hard-copy preferences into three camps: those who never thought about converting; those whose paper-based budgeting and billing processes are down to a science and will need to create new habits; and people who want a rationale to change.
Pitching the move as a sustainability measure could help.
"From a social-responsibility perspective, I think customers would be more attuned to that conversation than being told they have to go paperless and not given a reason as to why," said McGee.
Citi started requiring new "digitally acquired" bank and credit card customers — that is, those signed up for an account on Citi's website or mobile app — to enroll in paperless several years ago. They were able to switch to paper-only thereafter, but more than 90% remained paperless, according to the bank. Customers who receive Braille or large-print statements or those showing signs of financial distress are not included in the paperless campaign.
JPMorgan Chase has been gradually transitioning new and existing customers to paperless statements, but customers can opt in to receiving paper statements at no cost if they prefer, a company spokesperson said in a statement. Wells Fargo said it does not charge for standard printed statements; a spokesperson noted that the vast majority of customers choose online-only statements. A Bank of America spokesperson said the bank does not require customers to go paperless. In 2010, it
Consumer advocates see plenty of reasons for financial institutions to maintain paper statements.
Removing the option "deprives people of information in the way they want it and the way it's most accessible to them," said Lauren Saunders, associate director at the National Consumer Law Center.
For some, it's faster to spot fraud on paper.
"People have a legal deadline to dispute things, and for a lot of people it's easier to glance at their paper statements the moment it comes in rather than trying to find an email and download the statements," she said.
For others, paper statements serve as a reminder that bills are due, Saunders pointed out, or a more durable recordkeeping system than digital statements, which may eventually disappear online. She sees space for a middle ground, where customers could, for example, receive an annual paper summary of their transactions.
In a
Since then, "we've done better at closing the digital divide," she said, yet "there remains not just a divide but a gray zone of people who have insufficient internet access."
