In the financial services industry, building and maintaining trust with customers is a key priority. Recent trends show that text messaging has become an important channel for communication between lenders, financial institutions, and their clients. However, rising concerns about spam, fraud, and SMS phishing—known as “smishing”—have led to growing distrust among consumers.
According to industry data, smishing incidents increased by 328% in 2022. Furthermore, 85% of consumers express concern about fraud when they receive texts from unknown numbers. This lack of trust can result in reduced customer engagement, missed payments, and lost revenue for financial institutions.
To address these issues, companies are increasingly turning to message verification processes. Verification assures recipients that communications are genuinely from trusted businesses. While compliance with regulations such as the Telephone Consumer Protection Act (TCPA), carrier guidelines, and opt-in/opt-out procedures remains essential, verification provides visible proof of authenticity.
Different messaging channels offer various ways to reinforce trust:
- For SMS messages, using dedicated short codes increases consumer confidence; research indicates that 20% of people are more likely to trust messages sent from a short number associated with their lender or credit card company.
- MMS allows for multimedia content such as images and videos. Including business logos in these messages enhances recognition; 17% of consumers report greater trust when they see a recognizable logo.
- Rich Communication Services (RCS) provide interactive features like verified badges and branded elements. Carrier approval helps ensure that both networks and customers recognize these messages as authentic.
Industry observations suggest that verified messaging leads to higher engagement rates and better conversion outcomes. While open rates for SMS are already high at around 98%, verification further boosts click-through rates and reduces opt-outs. Some providers have reported up to a 25% increase in application-to-funding conversions after adding MMS capabilities.
For members of the American Financial Services Association (AFSA), benefits include improved message deliverability—verified RCS messages are less likely to be filtered as spam—and increased customer engagement leading to faster responses on payments or sign-ups. These factors contribute to a higher return on investment through better overall performance in communications.
The emphasis is on making verification central—not just a technical addition—to effective communication strategies within sectors like auto finance.
“Verification isn’t just a technical add-on—it’s the core of effective, trustworthy communications, especially in auto finance,” according to Solutions by Text.
Solutions by Text offers services designed to help financial institutions deploy verified messaging systems that comply with regulations while enhancing brand reputation.