SMS alerts are probably the most important entry point to mobile banking. It is an ideal mechanism to provide immediate benefits to bank customers by making use of a mobile phone. The direct benefits are obvious and it is relatively easy to build a supporting business case. By ensuring faster feedback on card (and other payment products), it is much more difficult for fraudsters to steal.Other (indirect) benefits also exist, like selling term repayments directly to the customer through the mobile, by sending a SMS with the following intent: "This purchase you made just now, you could repay us over six months at $X per month - just reply to this message and we will execute it in such a way".
What is however much more important, I believe, is to implement SMS alerts in a strategic way as this is actually the start of mobile banking. It is critical to plan this well, to store the right data, to enroll customers rigidly and to map out a plan with milestones that would ultimately lead to full-blown mobile banking.