Modernizing Collections Through Emerging Communication Channels
By Jenna Ulbricht
Yesterday ≠ Today ≠ Tomorrow.
Lenders desire to engage with their borrowers and borrowers with their lenders, but both are finding it very difficult due to changing demands and expectations. This prevents lenders from capitalizing on potential dollars collected due to inefficient communication tools and strategies.
The introduction of smart phones transformed the way customers purchase, communicate and access information 604,800 seconds every week. From the Baby Boomer generation to GenX to Millennials to GenZ, the way people interact and communicate has drastically morphed over the past century. Because of this movement, the way businesses operate and engage with their customers had to change. As a Baby Boomer, banking which started in person at the local bank soon morphed into banking with a drive through bank teller. Millennials remember their GenX parents banking in person but the option to bank online has been available to them since opening up their own bank account. GenZ won’t know a world without apps, Amazon and emojis (Google it!). People today are living longer which means the make-up of borrowers is a mixture of all different types of generations. Because of this, lenders are working with borrowers who still prefer to pay their bills in person while other borrowers prefer to set up their bills on auto draft through their smart phone application.
CSG, a Shaw Alliance Partner specializing in online communication, provided the below statistics on lender costs to engage with borrowers through various communication channels:
Phone = $12
Chat = $5
Email = $5
Social = $3
Web = $.10
Not only is it more expensive to call a borrower on the phone, it’s not working most of the time. According to a recent Experian analysis, “21 percent of the visits were outside the core hours of 8 a.m. to 8 p.m., an indication that traditional business hours don’t always work.” On top of that, TCPA regulations and call counters are making it more and more difficult to call borrowers compliantly.
LivePerson, another Shaw Alliance Partner specializing in online communication, surveyed over 1000 US consumers 18 and older about their banking habits and preferences.
Their study confirmed what we predicted of the Baby Boomer generation: Of the respondents aged 55 or older, 57% prefer to bank in person at a branch because they trust it more. A majority of the remaining 43% prefer to use a bank’s website or bank app because banking digitally is more convenient. GenX follows a similar pattern.
When it comes to the Millennial and GenZ generations, it’s about convenience and innovation with a side of trust. Almost 30% of GenZ and Millennial respondents predicted that banks will no longer have physical branches in just a decade! Without branches, consumers indicate that they expect to bank through a digital platform. Amazon, for example, has done a fantastic job at gaining consumer trust through a convenient platform using innovative technology. This is the reason, 12.3% of all consumers surveyed would select Amazon as their bank of choice over their current bank if given the option! From a web browser to mobile application, Amazon consumers can shop and pay for (almost) anything, anytime, anywhere in just 1-click. In addition, previous activity is saved so if mom starts to order paper towels but has to leave the computer to bring her kids to soccer practice, she can access the Amazon mobile app and pick up ordering where she left off. This type of customer experience is flexible and unique to each purchasing journey.
How do lenders juggle communicating to borrowers with different communication preferences effectively, efficiently, and compliantly? How do lenders ensure that the same message is communicated across all types of channels while maintaining consumer trust, like companies similar to Amazon?
Omni channel communication – this is a buzz phrase you’ve likely heard in a Wall Street Journal article or other news source recently. Unlike other buzz phrases, this one has data to back it. At Shaw Systems, we accepted the challenge to help our clients better service their customers using the Shaw Platform integrated with our Shaw Alliance partners. We recognize a combination of the below channels enable your borrowers of any generation to better service themselves, access information and perform simple tasks quickly through a digital platform, all the while reducing lender costs and increasing unique borrower experience:
Accepting payments via
- Online chat channels
- Text messaging
Auto-bot online chat responses for questions like
- What is my account balance? How much do I owe today?
- “54% of customers would prefer to use online chat before calling a company for support” -CSG
- “Chat has the highest CSAT for any customer service channel, average is 73%” -CSG
Text reminders for upcoming payments due and marketing campaigns
- In a governed and balanced way as to not blow up call center… Yes, it has happened!
2-way text messaging
- According to Shaw’s Alliance Partner, SolutionsByText, text messages have a 94% open rate and most of those text messages are read in 9 minutes or less!
2-way Online chat messaging
- Lenders can communicate with multiple borrowers at once versus a 1:1 phone conversation
- Social media chat through sites like Facebook and Twitter
- Apple pay/Samsung wallet communication
- Just like Starbucks rewards card information, airline boarding passes or concert tickets can be stored in the wallet on mobile devices, so can car payments. Borrowers can view their balances, receive reminder notifications that a payment is due on their bill, or initiate a chat question directly from their mobile device using the wallet
- Interactive electronic statements
- Barcodes on statements and in text messages to enable borrowers to pay with cash in convenient stores like CVS and 7-Eleven
- Links to payment portal in online statements
Hundreds of technology companies provide one or most of these services. Due to our stringent Alliance Partner evaluation and onboarding process, we’ve narrowed it down to these vendors who work with Shaw to provide seamless communication compliantly:
- ACI Worldwide
- Nordis Technologies/Transactis
Giving borrowers the option to pick how and when they communicate and pay lenders, increases customer satisfaction and reduces the costs lenders incur today when relying on one channel for communication, phone calls.
To meet the needs of today’s borrowers, customers need to be given the option to communicate with lenders, whenever, however, and wherever they can. All borrower engagements are recorded and managed through automated workflows in Shaw Systems, enabling the lender to communicate with each unique borrower through their desired form of communication. Shaw Systems Associates’ focus is on the future, and improving our clients’ bottom lines.