Proactive bank-to-client communication reveals not only the surface-level topics banks address but also the overarching communication strategies and broader values of the firms. These communications give us a glimpse into how firms believe they can best serve their clients and strengthen their financial standing. While some companies concentrate on delivering educational content, others leverage their communication channels to promote new and existing products or cross-promote products from different business lines. Around the holidays, banks focus on scam protection for their customers.

blankCorporate Insight recently conducted an analysis of 12 months’ worth of direct marketing communications, focusing on eight large financial institutions. This analysis found that firms overwhelmingly focus on marketing additional products to their customers (43% of all communications) and promoting existing account benefits and features (25% of all communications). Only 14% of the communications reviewed for this report focused on educational outreach. Education—especially regarding scam prevention—may become more important towards the end of the year as scammers take advantage of increased shopping and charitable giving during the holidays.

However, education may not be enough for all consumers. Banks’ proactive scam prevention measures are more important than ever with the increase in fraud over the last three years. Consumers may never see what banks do behind-the-scenes to prevent scammers from accessing their accounts, but they will notice if they have to send a muti-factor authentication code each time they want to make a transfer. Implementing barriers to transactions like wire transfers and peer-to-peer (P2P) payments may interfere with the seamless customer experience all digitally-focused companies wish to provide. However, friction can be a positive aspect of a user’s experience if it protects their account.

Fraud on the rise

The landscape of payments, particularly with the rise of real-time payments (RTP), FedNow, and P2P transactions, has become a breeding ground for fraudsters. This evolution in payment methods has presented new opportunities for scammers and pushed the boundaries of consumer safety. As a result, financial institutions, network operators, and regulators are grappling with challenges in safeguarding customers, combating fraud, and ensuring a seamless user experience. The growing incidence of sophisticated scams leveraging payment systems has raised concerns, with fraudsters manipulating customers into transferring funds, only for the money to vanish. Despite efforts to educate customers on treating real-time payments with caution, the expectation for banks to protect customers in these digital transactions continues to increase.

Bank payments, though already established in some regions like the UK with Direct Debit and Faster Payments, are gaining momentum globally. Factors such as rising transaction volumes and increasing acceptance by entities like HMRC for tax collection are propelling their adoption. The industry could see a potential shift where bank payments offer savings passed on to customers, driven by reduced fees. Notably, incumbents are actively entering the realm of bank payments, with players like JPMorgan and Mastercard introducing initiatives to modernize account-based payments.

Zelle, a P2P payment service, has witnessed a surge in fraudulent activities, raising concerns among regulators and lawmakers. Reports indicate instances of fraud and scams, with significant sums involved. The rise in reported cases has sparked investigations and inquiries from lawmakers aiming to hold banks accountable for compensating customers impacted by fraud or scams through Zelle. The banking industry faces increased scrutiny and pressure to improve safety measures amid growing concerns about Zelle’s vulnerability to exploitation by scammers.

Financial institutions’ scam education and prevention in practice

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Educational outreach is important for any financial institution to protect and foster a positive relationship with consumers. While just 14% of communications reviewed in our Communication Analysis report touched on educational topics—and of those, only 33% focused on fraud awareness—educational communications did increase between October and December, showing an intentional level of outreach from financial institutions.

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Education around scams and fraud may be effective at preparing consumers to protect themselves. But other consumers may require additional safety measures from their bank. Some firms—like Capital One and Chase—employ some form of fraud awareness within money movement journeys on their authenticated sites. Capital One’s wire transfer journey stands out for having the most unique form of fraud awareness, in which the firm quizzes the user about three possible scenarios they may have experienced. Selecting yes to any of the three opens a lightbox warning the user that they may have been a victim of a scam and links to a public site informational page with tips on protection from scams. Other firms may require identity verification when consumers perform money movement-related tasks, such as making a wire transfer or adding a new wire transfer recipient.

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Scam warnings from Capital One’s wire transfer journey

For deeper discussion of banking firms’ marketing and communication strategies, check out our recent Communication Analysis Report (October 2023) or our previous Security Management and Communication Report (May 2023) for further information around banks’ security measures. (Subscription required for both reports.) For more detailed insights, contact us about custom work or explore our research services here. And view our Insights page for the latest from the world of financial services, insurance and healthcare.

Stephanie Sorage

Stephanie Sorage is an Analyst on CI's bank and cards team.