Banks Emails Have Higher Level of Trust

Financial marketers continue to use email for the same reasons they keep using direct mail. It works. And it works better for financial institutions in many cases compared with other industries. Banks emails have a higher level of trust and familiarity from routine transactions.

“Email is one of the most effective forms of marketing we do,” says Chris Nichols, Chief Strategy Officer, CenterState Bank.

He says his bank institution plans to do more of it in the year ahead. Regarding trust, Nichols observes in a CenterState blog that banks and credit unions in general use more reputable email delivery applications and produce content of a higher quality than the average business email sender.

But those advantages only go so far. 14% of financial institutions’ emails are deleted before being read, according to a Return Path report on email deliverability. The firm refers to this metric as the “ignore rate,” one of five factors it says the big mailbox providers — Google, Microsoft and Yahoo — focus on.

While the banking’s ignore rate of 14% is ranks slightly better than the average for all industries (16%), the rate jumped by three points from 2018 to 2019. All industries saw an increase in emails ignored — by an average of four percentage points. The least ignored emails were those from manufacturing and distribution firms, many of which may have been B2B versus B2C email communications.

On the other hand, an impressive 38% of bank and credit union emails get read, far ahead of the average for all industries of 24%. Only manufacturing and distribution (60%) and insurance (43%) were significantly higher than banking. The high read rate is crucial because it affects deliverability, according to Return Path. Low read rates along with high ignore rates are seen by email providers as indicators of poor engagement.

“If your read rates are consistently low,” the email marketing company states, “mailbox providers will begin to view your email as unwanted and start delivering your messages to the spam folder.”

Email Complaint Rates Low, But Rising

Besides the “delete before reading” rate and the “read” rate, other metrics Return Path says are at more significant than the more commonly used “open” and “click-through” rates are: “messages marked as spam” and “complaint rate.” The latter refers to the rate at which subscribers report your messages as spam to their email provider.

Email providers recommend a complaint rate of no more than 0.2% of all emails sent by a business. The average overall complaint rate in 2018 for all industries was 0.39%, the Return Path research found.

For banks and credit unions, the complaint rate of 0.26%, came very close to the recommended level, but it was up significantly from 0.09% the previous year, even more than for senders overall. It’s an issue that should be closely tracked by financial marketers.

One way to avoid complaints is to avoid using purchased lists. “In today’s climate of data privacy, this is a risky practice and often yields low ROI,” states Jackie Mattia, Associate Director for Movable Ink, and lead strategist for the email marketing firm’s financial services clients.

Banks and credit unions should focus on emailing to consumers who have an existing relationship and who have chosen to provide their email addresses to the institution.

“They’re the most engaged,” says Mattia.

By contrast to email complaints, which are on the rise, the “Spam rate” — measuring the number of emails sent automatically to the spam or “junk” folder — dropped two percentage points for banks and credit unions, from 6% to 4%. That puts the industry well below the average spam rate of 9%, per Return Path data.

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