SMS in Banking: How It Works and How to Set It Up [2024]

May 9, 2023 | By Sam Pelton
bankers or business people texting

SMS in banking has become more and more commonplace.

Customers now expect to receive texts regarding things like account transactions and suspected fraudulent activity. In fact, the banking and financial industry is by some reports one of the top 3 industries customers report wanting to receive texts from (the others being ecommerce/retail and healthcare).

But have you ever thought about using SMS as a way to keep your internal team updated and in the know? Did you know that one of the most popular uses of SMS in banking among our customers at Mobile Text Alerts is actually for use in communicating with their teams?

Obviously SMS has a lot of potential for the banking industry—and lot of that potential is untapped.

So how can you use SMS in banking for your own company? Let’s take a deeper look as we explore what SMS in banking is, how it works, ways to use it, and how to set it up.

What Is “SMS in Banking”?

The term SMS means “Short Messaging Service” and simply refers to text messages. So “SMS in banking” refers to sending texts related to your banking business.

As mentioned, SMS is becoming increasingly used for customer account notifications, and it’s also used for internal team communication within a bank setting.

How Does SMS in Banking Work?

To send SMS for your bank, you’ll need a platform or API that can send text messages.

Platforms like Mobile Text Alerts are specifically designed for sending text messages on a large scale.

With an SMS platform, you can enjoy a user-friendly way to set up your messages and send them out in whatever method works for you. You can quickly set up and send a message to an individual or to a broader audience as needed. Or you can schedule messages to send out at a specified date and time. You can also set up automated flows or automatically-triggered messages.

With an SMS platform, no coding is necessary in order to get your SMS process set up and going.

If you want more control over automating your SMS flow, you can also use SMS API to program your messaging process. Using an API requires coding per API documentation, but allows you to connect your SMS services to processes and software you already have.

Whether you use a platform, API, or a combination of the two options, through an SMS service you have the capabilities to send and manage your text messages, as well as see reporting information for your texts.

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What Are the Benefits of Using SMS in Banking?

There are a couple of major benefits of incorporating SMS into your banking process.

High Read (and Reach) Rate

Since text messages are read up to 98% of the time, SMS is one of the most effective ways to make sure your messages are actually seen.

Though other communication channels like email, social media, and even phone calls have their uses, they don’t come close to that kind of read rate.

(On top of that, according to TechJury, 92% of the global population is able to receive text messages. So almost everyone you contact will have a phone that you can reach.)

What’s best is to incorporate multiple channels together—for example, you can send an email and a text message at the same time in order to maximize your chances of your recipients seeing and engaging with the message. Or if you have an email with some more thorough content, you could send a text message telling people to check their email.

Time-Sensitive Content

Out of all the potential communication channels, texting is one of the best in regards to communicating time-sensitive information.

For a bank, this could mean a notice about suspected fraudulent activity on a customer’s debit card, or it could mean a notice about a system outage for your employees.

When people receive a text, they’re likely to read it very quickly—as opposed to, say, an email, which may sit in the inbox for hours or days.

Texting can be even better than phone calls in communicating time-sensitive info, because a lot of people don’t answer their phone. And even if you leave a voicemail, it’s more intrusive to have to check a voicemail than it is to check a text message.

Again, what’s sometimes best is to incorporate both a phone call and a text message together, to help ensure your message is read quickly.

3 Ways Banks Use SMS (with Examples)

There are at least 3 primary ways to use SMS in banking.

1. Employee Notices

One major use of SMS in banking is to keep employees informed.

This could be in regards to anything from HR notices to office closures to system outages to safety issues.

SMS is simply an easy way to make sure employees are up-to-date about any info they need to know.

The Albany branch will be closed all day today due to the snowy conditions. Stay safe!

We’re currently running maintenance on the system. Please be patient as this update may take ~20 minutes. We’ll notify you once the system is back up and running.

Casual Friday is being implemented this week! Tellers may feel free to wear jeans (without holes please).

2. Suspected Fraudulent Activity Notices

If your system notices unusual activity on a customer’s credit card or bank account, you can send them a text message asking if they authorized the transaction.

If they reply back that they didn’t authorize it, that can let your system or your employees know to put a hold on the customer’s card or account.

Did you authorize a recent charge of $1.00 at Honest Abe’s on your card ending in x2579? Please reply Yes or No

3. Regular Account Activity Notices

You can allow your customers to opt in to receive notifications whenever they make a transaction like a withdrawal or a transfer.

This can help customers keep track of their activity and can serve as an alert if there’s any unauthorized activity on their account.

Recent withdrawal from checking: $425. Reply HISTORY to see recent transactions.

5 Tips for Using SMS in Banking

1. Have a Team Action Plan

If you’re using SMS for your internal team, have a plan in place so that everyone’s on the same page with how communication is going to happen.

Make sure people know who’s in charge of what, and in what situations communication via SMS will be used.

For example, perhaps each branch manager should be in charge of all SMS communication for their particular branch. Or they could designate some communication responsibilities to prominent bankers or tellers.

Here’s a simple example of how your “SMS communication plan” might look:

The branch manager will contact all branch employees in the events of a system outage, branch closure due to weather or other unforeseen circumstances, HR notice of a time-sensitive nature, or any other time-sensitive notices. If the branch manager is not available, the banker with the highest seniority will assume responsibility.

Or perhaps you have an administrator in the corporate office who’s responsible for all the communication across branches.

Whatever the case, make sure that people are in the know on the communication process so that no one’s confused.

2. Create Message Templates Ahead of Time

You can save time and hassle when it comes time to send a message by setting up message templates ahead of time.

With message templates, you can pre-set a message that you may want to send in the future.

When the situation comes up in which you’re ready to send the message, all you or your administrators will need to do is fill out the message template with the appropriate information.

3. Set Up a Digital Contact Card

To help people know who the message is coming from when you send messages, you can set up a digital contact card. This digital card will allow the recipient to easily save your SMS account’s phone number to their phone along with a contact name and image that you designate.

That way, when they receive future messages from you, they’ll already have the contact saved on their phone so they’ll recognize the sender.

4. Sync Contacts Regularly

Depending on the size of your business, you may have employees entering and leaving your workforce often.

If you’re using SMS to send notices to your team, you’ll want to make sure to sync up your contacts as often as is necessary to keep it up to date. This can be as simple as importing a new spreadsheet with a list of your team members periodically, or you may be able to automatically sync up your management software with your SMS platform via API or Zapier integrations.

5. Automate Whenever Possible

You’ll want to automate your notification processes whenever possible, particularly if you’re using SMS to notify customers of alerts like suspected fraudulent activity or account transactions.

You can apply the SMS API to program automations according to how you'd like them to work.

But there are also no-coding-required automations available through the integration site—and there are automations available within the platform itself which allow you to do things like:

  • Schedule messages ahead of time
  • Trigger specific responses when people send a text to your account’s phone number
  • Send out a preset workflow of messages over a period of time

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Screenshot of adding a message to a text drip campaign

How to Set Up SMS for Your Bank in 3 Steps

To get started with SMS for your bank, you’ll first need to choose an SMS platform or API to try out.

Step 1: Choose a Platform

You can try out Mobile Text Alerts for free for 14 days (no credit card required). You can also get a free 1-on-1 consultation to see how services work, and to get advice on how to implement it for your bank.

Step 2: Add in Your Contacts

Once you have a platform set up, you can start adding in contacts so that you can test out sending a few messages.

Although there are multiple ways to add in contacts, the easiest way most people get started is by importing a list from a spreadsheet.

Step 3: Send a Test Message

Once you have at least one contact added in, you can test out sending a text message from a “Send a Message” section within your platform.

And as far as basics go, that’s it! Pretty easy.

(Of course, many other features are available, which you can explore on an as-needed basis.)

Try SMS for Your Bank for Free

Get started on implementing SMS for your banking business today. That way, you can start reaping all the benefits of the power of SMS to really reach people.

You can get 50 messages to try an SMS platform for free, so that you can get a feel for how it works.

Get your free account now and see how SMS can give a boost to your banking business.

Get a Free 14-Day Trial Account

Start sending SMS today!