Keeping track of our financial affairs is a challenge at the best of times. Bills, statements, notices and letters from the bank seem to fly through the letter slot with dizzying frequency and in no particular order. Householding (intentionally mailing separate statements or other documents for the same address in the same envelope) and its natural extension, consolidating (combining information from several accounts into a single document), are two ways that financial institutions can help their customers deal with the deluge of information they receive each month while increasing efficiency and improving customer retention. However, they also present challenges that organizations must understand and address, if they are going to be successful.
As financial institutions continuously strive to get a greater 'share of wallet' (more of each customer's financial business), one of the great advantages of creating consolidated statements is that you can offer customers an overall view of their financial affairs through a high-level summary. Many customers find a lot of value in this big-picture view of their finances - something that's consistently supported when it's brought up in document testing sessions - as long as the receipt of a consolidated statement is optional. One of the benefits to the organization is that having so much of a customer's financial information bundled together in a single package creates a "stickier" relationship with them and can encourage customers to consolidate more of their business with one institution so that their financial snapshot can be that much more complete.
Another benefit of both householding and consolidating is considerably lower mailing costs, based on the fact that four or five individual mailings can often be reduced down to one. There is also the potential for lower paper and production costs.
While the benefits are clear and customer support is strong, there are challenges to offering householding and consolidated statements, some legal, and some logistical in nature. One of the most delicate challenges is respecting the privacy of individual account holders. Those who object to consolidated statements often say that they keep their money in separate accounts for a reason and want those accounts dealt with completely separately from one another. The issue of how to address joint accounts also raises similar issues. Lawsuits have been launched, and won, by customers whose banks thought they were doing them a favor by householding or consolidating their individual and joint account records into a single mailing.
A few guidelines will help avoid the privacy pitfalls around offering householding or consolidated statements:
- Any program needs to be optional for customers, and they should be required to actively sign up for the program and choose which accounts can and which cannot be combined. Joint accounts should require the consent of both accountholders.
- Each customer needs to be assigned a unique identifier, and some work needs to be done to reconcile accounts that may have slightly different information for the same person. For example, the name might be listed as John Smith on one account, J. Smith on another and J.M. Smith on yet another. This unique identifier also needs to go beyond name and address to cross-reference other information, such as date of birth, to address the fact that fathers and sons or mothers and daughters living at the same address may share the same name.
From a logistical point of view, offering householding or consolidated statements will require that organizations align their statement periods for a customer's various accounts. More significantly, they will need to look at developing a consistent format and organization for presenting their customer account information. (See my June 2009 column, "Keep It Consistent," for a detailed look at this subject.)
While these challenges are not insignificant, the benefits of offering householding and consolidated statements can be considerable. They can help simplify your customers' financial affairs and strengthen their relationship with your organization in the process.
Scott Watkinson is a senior communications consultant, specializing in the writing and design of customer-focused business relationship documents. Send your comments to firstname.lastname@example.org.