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Shalin Patel
Shalin Patel
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Why Alerting Drives E-Servicing Usage

Unlike banks and brokerages, most mortgage firms do not offer e-mail alerts. However, Gomez believes mortgage firms should use alerts to get offline customers to adopt the online channel. Companies like Washington Mutual, Sharebuilder and E*Trade can show the way to go.

E-mail alerts allow customers to set up discretionary conditions under which they will be notified via e-mail outside the account management area. Clearly, e-mail alerts provide customers with a convenient way of receiving timely account information.

Time-sensitive, transaction-driven industries such as banking and brokerage have taken advantage of alerts and the benefits they provide to customers. Online bankers and brokerage clients are able to use alerts, for instance, to notify themselves when a bill is due, a trade is confirmed and if the price of a security has hit a set target.

But unlike banks and brokerages, most mortgage firms have not taken up alert initiatives. Only 20% of the 15 firms on the Gomez Q3 2002 Internet Mortgage Scorecard provide some form of alerting compared with 75 percent of discount brokerage firms on the Q4 Internet Brokerage Scorecard.

Why are alerts important? Importantly, they can spur additional usage of the online offering, particularly to partake of more cost-effective e-servicing functionality. For example, Gomez research shows that Online Bankers (those who at least occasionally use Web banking) who use bill payment have the highest interest in alerts. Currently, 53.3 percent of firms on the Q3 2002 Internet Mortgage Scorecard provide online mortgage bill payment.

Furthermore, data derived from our report, "Mortgage E-Servicing: Raising Awareness, Driving Adoption" reveals that 81.6 percent of current e-servicers access their checking accounts online; 74.4 percent access their credit cards online; and 66.4 percent access their savings account online. This shows that the habits of e-servicers are not that much different than those of Online Bankers. Additionally, Offline Bankers state that alerts are either the first or second most preferred method for learning about an event. Gomez believes mortgage firms should use alerts to get offline customers to adopt the online channel.

What follows are best practices and some shortcoming in alerting as implemented by a variety of financial institutions.

WaMu's Alert Variety
WaMu is a leader within the mortgage industry with its sheer number of alerts. The diversified financial services firm, in fact, is paving the way for other firms by providing one of the most sophisticated alert offerings in the mortgage industry. For instance, WaMu provides payment posted alerts, late charge notification and payment problem alerts (interestingly, though, the bank doesn't offer these services to banking customers).

WaMu, however, fails to provide online statements online and does not offer online statement alerts. Wells Fargo and Countrywide are examples of two financial institutions that provide online statement alerts but don't provide the other three that WaMu offers.

Sharebuilder's Statement Alerts
Sharebuilder, one of the fastest growing online brokerage firms from a new accounts perspective, provides new statement available alerts similar to Countrywide and Wells Fargo. The Sharebuilder e-mail alert contains several best practices such as reminding customers to print and retain a copy. It also provides links to several valuable features the site has to offer.

While statements are still not readily available in the mortgage industry, once online statements become more prevalent, statement alerting would be a powerful way to elevate usage of the online offering.

E*Trade's Alert Integration
E*Trade not only provides a host of e-mail alerts for its brokerage customers, but also is one of the few firms that integrates its alert throughout its online offering. Instead of providing one section where alerts can be found similar to WaMu Home Loans, E*Trade integrates the appropriate alert within the appropriate section.

For example, E*Trade integrates price alerts within the quotes, charts and news page-the most logical site page. Additionally, clicking on the alert link directly modifies the current alert that is set up.

The mortgage industry is aggressively evolving, especially in light of the refinance boom and ever-increasing adoption of the Internet channel. A closer look at recent site enhancements at WaMu and Countrywide suggest that financial institutions are focusing their online efforts on serving existing customers with the goal of reducing costs.

By providing features such as e-mail alerting and, more importantly, online statements, mortgage firms can accelerate the conversion of offline clients into online users. This will help them save significant amounts of money and improve customer retention in the process.

Shalin Patel is an online securities brokerage and mortgage services analyst at Gomez, Inc., an Internet quality measurement firm in Waltham, MA. Patel can be reached at

This article originally appeared in Bank Systems & Technology eNEWS, a weekly e-mail newsletter. To order a free subscription, click

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