Banks send millions of messages to their customers every day from one-time passwords and security alerts to transaction notifications and installment reminders. But as the volume and cost of banking SMS continue to rise, a more fundamental question emerges: does every banking event really need to become an SMS? Perhaps the challenge facing banks today is no longer simply how to reduce SMS costs, but how to intelligently decide which message should be sent to which customer, at what time, and through which channel.
SMS has been one of the primary communication channels between banks and their customers for years. Withdrawals and deposits, one-time passwords, installment due dates, cheque status updates, security alerts, and a wide range of service and informational notifications generate a massive volume of banking messages every day. Rising SMS delivery costs have also made the management of this traffic a significant expense for banks.
But perhaps the right question is no longer, “How can banks send SMS more cheaply?” The more important question is: Should every banking event become an SMS in the first place?
A one-time password or a suspicious-login alert cannot reasonably be treated the same way as a low-value transaction notification, a service reminder, or a promotional message. The former may be a critical security message whose delivery the bank must ensure, while some other notifications could be delivered through channels such as Push Notification—or even left to the customer’s preference.
The issue becomes even more complex when differences between customers are taken into account. A low-transaction retail customer and a business with a high-volume account have completely different notification patterns. Yet in many conventional models, all of these events ultimately follow the same path: a message is generated, passed to an SMS gateway, and its delivery cost is absorbed into the bank’s overall messaging expenditure.
A Decision Should Be Made Before a Message Is Sent
There is another way to approach this process. In this model, the occurrence of a banking event does not automatically trigger an SMS. The system should first determine what the event is, which customer and account it relates to, how important it is, what the bank’s policy is, who should bear the notification cost, and ultimately which channel is best suited to deliver it.
Arad has designed Arad Notification Wallet around exactly this logic. Rather than serving as just another message-delivery tool, it operates as a decision-making layer between the bank’s systems and the messaging infrastructure.
In this architecture, whenever Core Banking, card systems, lending platforms, cheque systems, internet banking, mobile banking, or other banking applications generate an event, Notification Wallet evaluates it before delivery.
The platform can determine which customer and account the notification belongs to, whether the notification service is active, whether the cost should be covered by the bank or the customer, whether the customer has the required package or credit, and even whether SMS is the most appropriate channel—or whether Push Notification would be a better option.
Not Every Message Should Have the Same Price or Follow the Same Route
This approach allows banks to define different policies for different categories of notifications. For example, one-time passwords and security alerts can be funded by the bank; optional notification services can be deducted from the customer’s package or wallet; corporate customers can be billed based on actual usage; and the cost of messages sent as part of a marketing campaign can be charged directly to that campaign’s budget.
Different policies can also be applied to low-value transactions versus high-value or sensitive transactions. Some notifications may first be delivered through Push Notification, with SMS used only as a fallback when necessary.
In this model, the problem evolves from “sending SMS” to “managing banking notifications.”
This distinction is also economically important. Instead of treating millions of messages as a single cost pool, the bank can distinguish between expenses related to essential services, optional customer services, and services that may be developed into value-added offerings.
The Goal Is Not to Charge Customers for Every Message
Managing the cost of banking notifications does not necessarily mean passing those costs on to customers. Charging for all notifications without distinguishing between service types can harm the customer experience. The real objective is to create the ability to choose and define appropriate policies.
With Arad Notification Wallet, a bank can distinguish between critical messages, basic services, optional services, and value-added services, and assign a different financial model to each.
Notification packages, prepaid wallets, postpaid billing, bank-funded messaging, and hybrid models are among the options that can be configured within this architecture.
These policies can even be defined at the individual account level. A single customer may have several bank accounts serving different purposes, and it is not necessarily logical for all of them to follow the same notification policy.
Notification Wallet supports profile definition based on mobile number, customer number, account number, national identification number, or a combination of these identifiers. As a result, the same customer can have different notification service models for different accounts.
The Real Issue Is No Longer the Number of SMS Messages
Rising SMS costs may be one of the factors encouraging banks to reconsider their notification models, but the issue extends far beyond the price of each individual SMS.
In digital banking, the number of customer touchpoints continues to grow. Every transaction, login, purchase, installment, cheque event, or security incident can generate a notification. If all of these events are automatically converted into SMS messages without distinguishing between their importance, customer, account, or communication channel, growth in both message volume and cost becomes inevitable.
That may be why the question for the banks of the future should no longer be:
“How can we send more SMS at a lower cost?”
The more important question is:
Which message should be sent to which customer, at what time, and through which channel?
Arad Notification Wallet is designed to turn the answer to that question into an independent capability within the bank’s architecture a capability that determines, before delivery, whether the message is necessary, how it should be funded, and which channel is most appropriate.
In such a model, the best banking message is not necessarily the cheapest SMS. The best message may instead be the one for which the bank already knows why it needs to be sent, and why this particular channel is the right way to reach this particular customer.
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