A Usability Comparison of SMS and IVR as Digital Banking Channels

1. Introduction

Internationally, banks are investing considerable sums of money into mobile phone banking (mBanking) services (Lee & Chung, 2009; Laukkanen, 2007; Luarn & Lin, 2005), but the uptake by customers has been disappointingly low (Laukkanen, 2007; Pousttchi & Schurig, 2004; Suoranta & Mattila, 2004). Many of the advantages of Internet banking are shared by mBanking, e.g., convenience and time saving. The most optimistic supporters of mBanking claim it is cheaper, safer and more convenient compared with Internet banking (Lee & Chung, 2009; Luarn & Lin, 2005). The appeal of mBanking lies in the fact that the customer can access their account on the move, regardless of time or place. A major factor in the success of Internet banking is its ease of use (Hudson, 2002; Karagaluoto, 2002). In contrast, a major factor in the low adoption of mBanking applications relates to the usability problems inherent with these smaller devices.

This paper is concerned with one application of mBanking: Short Message Service (SMS) banking. It compares the usability of SMS banking to the more established Interactive Voice Response (IVR) automated banking. The paper describes the results of an empirical investigation into the integration of an SMS banking channel into a bank’s multichannel environment¹. The paper compares the usability of an SMS banking channel with an IVR banking channel for balance requests. The aim of the experiment was to inform the practical application of SMS banking in order to maximise customer acceptance and adoption, and to contribute to better understanding of the reasons for the low adoption of SMS banking. The usability methodology was based on previous work in SMS banking (Peevers & McInnes, 2009; Peevers et al., 2008).