Banking how you can Benefit from Text Alert Services

One of the most interesting developments in banking in the last couple of years has been the introduction, by some banks, of text alerts services. This article explores what these services provide, what they could provide in the future and whether they are worth having.

The basic principle behind text alerts is that your bank will send you reminders that hopefully will prove useful in the management of your finances. There are two basic types of alert that you might expect to find included in your bank’s text alert service (if they’ve launched one yet). The first of these is a basic balance reminder. So maybe once a week or once a day, etc, your bank will send you a text telling you what your balance is. This may be handy but the real utility, I think, lies with a second type of alert, one which can be described as a proximity alert. The idea of a proximity alerts is that you set the conditions that will trigger the sending of the alert. For example, you might set it up so that you get a balance reminder if your balance goes below $100. It’s easy to see how useful this could be, acting as an early warning system and enabling you to make sure that you don’t incur overdraft charges.

The two types of alerts that I’ve described both relate to account balances. However, there’s no reason why alerts couldn’t be used to provide a much wider range of benefits. How about an alert every time that your online banking session is accessed? If you got this alert and it wasn’t you who was in online banking, this would be a warning to contact your bank’s fraud area. Or you might want an alert telling you that you now qualify for a $500 increase in your overdraft. These are just a few examples of the ways in which text alert services can be used. It is a relatively new area of banking and we can expect to see the range of services offered evolving over the next 5 or so years.

The question then is whether it’s worth signing up for your bank’s text alert service as and when your bank introduces and starts to promote the service? The answer to this probably depends on two things. Firstly, how good are you at pro-actively managing your finances. If you’re someone who always knows what your balance is and never incurs overdraft charges, then maybe the text alert service won’t offer that much extra value, although you may be just the type of person who likes the idea of getting your balance sent daily to your phone. The second factor is whether your bank includes a cost for signing up for the service? If the service is offered for free, maybe as part of the benefits offered with a premium account, then there’s no reason not to take advantage of it. The chances are though that there will be a small charge (either monthly or per transaction) and you will then need to make a value judgement as to whether the cost is justified by the value you are likely to derive from it.

I think text alerts and mobile phone banking are two of the best developments to have come out of the banking industry in the last few years. They extend the principle of allowing people to do their banking any time, anywhere. I expect text services to become very prevalent within the next 5 to 10 years, although how quickly they become entrenched as part of our everyday banking will probably depend on the price that they are made available at.