Errors, Lost Information and Misinterpretations: Email in Financial Services

The secure and trusted exchange of information in financial services is critical. Indeed it is the purpose of the entire industry. Among the list of traditional channels used to relay information between internal and external parties, email holds a dominant role, but it also poses significant issues. Financial professionals rely on accurate and timely information to conduct everything from onboarding new customers, making informed lending decisions, managing investments, and communicating with their customers on a daily basis. So it’s fair to say that having the right (error-free) information when they need it is essential for those working in the financial services space.

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The Use of Email in Financial Services

Email is used by practically every FS firm across the world to receive a variety of information and documents. When it was built in 1965, the concept was a revelation – an evolution of traditional paper and post, and at the time it was a massive step forward, but fast-forward 60 years and technology has moved on (and let’s be honest, it was never built for the complex world of financial services anyway). Email is now deemed the legacy communication channel of the modern era, and considering the number of issues that derive from this channel, and the consequences of these issues, you have to wonder why it is still the de facto standard of communication used in financial services today?

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Misinterpreting Crucial Information

Email communication, by its very nature, introduces a level of ambiguity into the exchange of information. When financial institutions engage in vital interactions via email, whether this is requesting or receiving sensitive information, data and documents, there is a significant risk that misinterpretation of information, on either side, can result in negative consequences.

For example, imagine a scenario where a mortgage lender or a loan underwriter, amid a flurry of email communications and a large number of back-and-forth email threads, misinterprets the financial details provided by a customer when processing an application, which then leads to erroneous loan approvals or declines, incorrect interest rates, or inappropriate financial advice.

Or on the flipside, a typo in an email from the lender to a customer requesting documents results in the customer submitting the wrong information, which leads to the lender inadvertently processing incorrect information, or extensive delays as the customer has to resubmit the correct data.

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Document / Information Misplacement in Financial Communication

In the intricate web of financial communication, the challenge of losing documents or information within a sea of email threads looms large. The constant influx of emails, each creating a new thread, can lead to a disorganised maze where critical information may inadvertently get lost or misplaced. Financial professionals navigating this labyrinth find themselves grappling with the consequences of a scattered digital banking landscape. The inability to locate essential documents amidst the multitude of threads can result in operational inefficiencies and potential errors.

The impact is not just internal; it extends to customer interactions. Financial institutions may find themselves in the awkward position of having to request customers to resend documents due to the challenge of document misplacement within the email system. This not only adds unnecessary friction to the customer experience but also raises concerns about the institution's reliability and organisational efficiency.

Many FS firms will employ an army of administrators to manage this problem. They will also spend millions on technology like CRMs and workflow tools to handle it. The problem is big, keeping any semblance of order extremely costly and ultimately information gets lost and processing is done at a glacial pace.

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Ignorance is (not) Bliss

In the world of financial services, where time is often of the essence, the frustration of being ignored or experiencing delays in email responses can be acutely felt. Consider a scenario where a client, eager to address an urgent financial matter, sends an email inquiry to their bank or financial advisor. However, days pass without a response, leaving the client in a state of uncertainty, heightened anxiety and confusion.

For banks, investment firms, or other financial entities, a failure to promptly address client queries via email can have broader implications. Clients may perceive the institution as unresponsive, leading to dissatisfaction and, in extreme cases, prompting them to consider alternative financial partners.

The consequences of being ignored or experiencing sluggish responses through email in financial services extend beyond frustration and inconvenience. They touch upon matters of financial security, client trust, and the overall competitiveness of financial institutions in a market where swiftness and responsiveness are paramount.

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The Costly Price of Errors

The toll of errors, mistakes and misinterpretations can be a costly venture with far-reaching consequences. Whether it's a misplaced decimal point in interest rates, a loan incorrectly approved or a misinterpreted clause in a contract, the financial industry navigates a delicate balance where precision is paramount. Mistakes in calculations, miscommunications, or oversight during customer onboarding can lead to a domino effect of financial repercussions.

However, as discussed throughout this article, the costs extend beyond mere financial losses, encompassing customer frustration, damaged client relationships, regulatory compliance issues, and reputational damage. In an environment where accuracy is synonymous with trust, the costly price of errors underscores the imperative for financial institutions to strengthen their communication processes to avoid mistakes and mishaps.

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Nivo Verified Identity Messaging: Upping the Ante in Financial Email Communication

Nivo’s Verified Identity Messaging (VIM) is a rare thing. Rather than complex solutions trying to paper over the cracks of email, VIM is a channel designed to be fit for purpose and as such can eliminate all of these issues. VIM is a feature-rich instant messaging platform that leans on speed, ease and convenience of messaging apps such as Facebook Messenger, WhatsApp, Slack and MS Teams. It comes with bank-standard security to ensure that sensitive information will remain secure and safe and features that make the collection of data, documents, evidence and approvals slick and effective.

Verified Identity Messaging is revolutionising the financial sector and replacing outdated traditional channels including the use of email. Email was never intended for such a highly regulated industry and the risk of errors and mistakes are vast. Nivo eliminates these risks, using one platform to communicate instantly with customers and partners.

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Conclusion: Re-evaluation Email Communication in Financial Services

In conclusion, the prevalence of errors and misinterpretations in financial email communications underscores the critical need for a re-evaluation. The customer experience, integral to the financial sector, is profoundly affected by even the slightest inaccuracies. As the industry continues its digital evolution, prioritising communication channels that minimise errors becomes imperative for the future of the financial services.

To learn more about the many issues with using in email in financial services, download our guide 10 Reasons why Email is Killing Efficiency, Speed and Security in Financial Service Operations today.

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