New Survey Results: How Lenders Can Capture More of the Billion Dollar Pie
It should come as no surprise that the disruption found throughout the world of payments would impact the world of consumer finance. Fact is, the eCommerce experience enjoyed by shoppers has created an undeniable ripple effect for everyone from bankers to lenders. And with billions of dollars at stake, it’s important to understand the impact of this paradigm shift, especially as it applies to the growing demographic known as Gen Z.
To gain the most relevant insights possible, ACI surveyed 111 lenders on both their payments offerings and their customers’ preferences. Unsurprisingly, 80 percent of respondents offered checks as a payment option, followed closely by electronic check/ACH (79%). Online banking was another popular option, with 73 percent of respondents offering this payment channel. In stark contrast, only 44 percent offered debit cards as a payment option.
There’s a clear opportunity here for lenders, as 72 percent of payers who pay late are “very” to “extremely likely” to pay on time if they can pay with a debit or credit card. That said, our survey found that less than 10 percent of customers chose to repay their loan with a debit card, while electronic checks/ACH were the most popular payments method at 46 percent.
One area where technology – particularly mobile – made a big difference, was in how customers chose to receive lenders’ alerts. 35 percent preferred alerts by email, while 26 percent chose text messaging. These mobile-friendly alert channels fit seamlessly into customers’ lifestyles, making it easy for lenders to easily capture borrowers’ attention.
Lastly, we asked which payment channels lenders are currently offering to their customers to make payments. 75 percent offered payments through their company website, while 60 percent offered payments through traditional mail. And while consumers preferred to be alerted to bills by text and email, only 22 percent of lenders offered payment by email and 17 percent by text. With 87 percent of U.S. consumers using smartphones, lenders should look to bolster these offerings to meet consumer demands. This applies in particular to Gen Z, the first truly mobile-native generation.
Ultimately, for lenders to begin collecting more, it is incumbent upon them to deliver payments that fit seamlessly into borrowers’ lifestyles. This will mean more mobile-friendly payments and debit cards.
For more information on how ACI can deliver a payments experience that raises collections and borrower satisfaction, visit: www.aciworldwide.com/solutions/up-bill-pay-solutions.
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