Survey: US Consumers Need Both Automated and Live Prompting on Late Payments

Lenders have a new opportunity to reach customers faster using SMS. A third of respondents said they prefer SMS late payment reminders but only less than 15 percent of respondents receive one. However, lenders should clearly understand the functions and limitations of their mobile strategy. For example, mobile apps are still not consumers' preferred method of making late payments (12 percent), despite the popularity of SMS as reminders.

In addition, live contacts continue to be important for some borrowers. More than a quarter (27 percent) of the respondents said they are more likely to respond to a live contact regarding a late payment than even a restructuring or reduction of their debt (8 percent).

More information: https://www.youtube.com/watch?v=3bPqMHqbr1I

"Today's mobile-first, digitally savvy borrowers expect friendly and helpful services from lenders on every channel," said Tim VanTassel, vice president of FICO's credit lifecycle business line. "US lenders have to strike a fine balance between automating their customer communications effectively without losing sight of the importance of live contacts for select borrowers to take action in order to boost repayments."

The survey also found that:

• Social media channels are inappropriate for late payment communication: Only eight percent of people in the US indicated that they would be comfortable receiving late payment reminders from their bank through social media channels or chat apps, even though a vast majority use them regularly.
• Email is the most commonly used late payment reminder channel: Consumers are used to receiving late payment reminders by email with 36 percent selecting it as their top choice and 42 percent typically receiving email late-payment messages.
• Websites or online portals were the preferred method of making late payments (31 percent), with phone calls a distant second (17 percent).

FICO surveyed 3,600 consumers, 18+ years of age, in nine countries around the globe between June and August 2017.

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SOURCE FICO

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