PRIMIR Study Unveiled about Financial, Transactional and Transpromo Printing

A new PRIMIR study entitled "Trends and Future of Financial and Transactional Printing through 2012" was released in the spring of 2008. The study focused on commercial printers as well as in-house data centers and print-for-pay data service bureaus. A principle objective was to develop a comprehensive analysis of the digital printing (including inkjet) market opportunity for this application and identify drivers and threats to printed output in 2006 while at the same time forecasting trends and opportunities through 2012. The research was unique since, in addition to the traditional round of expert and industry interviews, an online consumer survey was conducted. In fact, 547 consumers responded about their current and future use of paper and online transactional documents.

Marco Boer of I.T. Strategies who conducted the research for PRIMIR noted, "the rate of migration to e-statements is highly varied, depending on business sector and size." For example, banks that on one hand have a 40% online banking rate find that 70% or more of their customers still want paper statements. While some credit card providers encourage electronic payments to save on remittance processing costs plus paper, printing and postage costs, other providers see paper as a great monthly communication vehicle with their customers. The latter group is generally open to the transpromotional opportunities.

There is a lot of industry buzz about opportunities in transpromotional statement printing. The truth is there are many parts of the transaction processing workflow that precede the printing. Given that, altering this fundamental workflow has a domino effect on the entire process.

Adding color graphics to a statement requires adaptation of completely new printing languages, changes in layout require coordination between the IT department and the marketing department, and programming adds expense and investment. Thus, the operational/technical challenges for implementing this new 'marketing opportunity' in-house requires corporate level decisions far beyond the simple acquisition of a high-speed color transaction printing system. As a result, there are opportunities for many NPES members to partner together to provide a 'total solution' to a printer or corporate in-plant that is interested in this market.

Having said all that, transpromotional printing is an opportunity for the astute 'commercial' or digital printer who has already mastered the technical skill sets, implemented new workflows, and has the high speed color printing system in place. The only skill set needed is a highly effective sales team to convince the corporate clients of the benefits and rewards of transpromotional statements and win their confidence to outsource that part of their business.

What do the Consumers Say?

The study confirmed without a doubt: people like paper. Paper provides proof that a transaction took place; it satisfies the need to keep a record over time that can be easily retrieved if necessary. It is tangible and trusted--the opposite of the Internet, which is intangible and not completely trusted.

As a result, consumers see value in both paper and electronic documents--paper for its permanence and electronic for its convenience. To quote one survey respondent: "Paper statements are a necessity. Online bill paying is also a necessity. I want both, and am not very happy with companies that don't provide both."

Surprisingly, 75% of the consumer respondents would prefer not to have promotional messages printed directly on their statements. Why?

o They want the messages separate so they can easily throw them away.

o They are afraid it will clutter the statement and make it more difficult to read.

o They are afraid they'll miss the promotion.

Proponents, on the other hand, want the message on the statement primarily since it will save paper!

The message is clear, for businesses considering implementing a transpromotional marketing strategy, they need to evaluate their customer base and determine how the messages should be presented and weigh the costs and expenses prior to moving forward--either in-house or with their printer.

Transaction Page Printing and Volume

Despite the common thinking that much of the production output is moving to electronic means, from 2002-2006 page volumes continued to increase. A large hidden contributor to this page growth is the proliferation of multiple financial accounts per household. But, according to I.T. Strategies, print volumes peaked in 2006 and have started a gradual decline.

One important shift seen in this new study is the growth of transaction pages that are printed fully digitally on continuous-feed color printers--for process cost efficiencies rather than transpromotional value-added reasons. And, much of which is two and three colors rather than four. Also, the offset preprinted shell will soon become a relic.

Outsourcing

The good news for digital printers: there is a strong trend towards the outsourcing of statement printing from in-plants to independent transaction print providers. And, unlike other printing applications, there is little risk that the outsourcing of the printing will migrate overseas since transaction printing is a highly time-sensitive application. I.T. Strategies noted that firms not typically associated with transaction printing, but rather with the processing of transaction data (i.e., e-billers) are buying their way up the value chain to offer one-stop (printing) services to clients. These firms present a new business opportunity for NPES members offering software, equipment, presses and supplies.

The Bottom Line

The bottom line of the study: financial and transactional printing is still a strong viable market despite all the hype about electronic bill presentment and payment. Transpromotional printing is highly effective in certain markets, but printers entering this market segment need to understand the overall costs and expenses for implementing a totally new workflow that supports transpromotional statement production.

The study "Trends and Future of Financial and Transactional Printing through 2012" was released exclusively to PRIMIR members. For membership information contact Jackie Bland, Managing Director of PRIMIR at e-mail: jbland@primir.org or phone: 703/264-7200.