The financial services industry is continuously evolving, and it is essential to optimize collections strategies to maintain liquidity and minimize risk. One of the most critical choices for credit un...
Payments
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3 min read
Did you know that the COVID-19 pandemic and subsequent statewide lockdowns have accelerated the adoption of digital products and services by six years? Digital channels have revolutionized what your borrowers have come to expect from a payments experience—they’re now demanding payment options that are dynamic, fast, and resonant. In this blog post, we’ll discuss how incorporating these three qualities can help your institution improve its digital payments experience.
Dynamic Payment Options for Our Multifaceted Lives
Between work, side-hustles, getting the kids to school or daycare, staying active, and enjoying hobbies, we all wear many different hats in a day. Today’s “do everything” borrowers expect to have multiple options for making loan payments. This demand for more dynamic choices is due in large part to the very high growth in electronic payments of all types, across all markets. If you want every facet of your payment experience to shine, you need to make sure it’s multifaceted to begin with.
Omnichannel is a comprehensive and intentional strategy to support payments across the board at critical customer service touch-points at a financial institution, including online. Omnichannel ensures there is a plan to support customers for in-person, phone (live or IVR), mobile, desktop, and more; the plan will ensure that business requirements (i.e. risk controls and operational capabilities) are built into each channel. This allows omnichannel support, even if 100% functional parity cannot be attained because of external factors.
Real-Time Payments Options for Busy Borrowers
Let’s face it—your borrowers are busy. They don’t want to have to wait around for a payment to go through. What’s faster than fast? Real-time.
Real-time payments have a very specific definition—they’re immediate, irrevocable, and final. Basically, the movement of money happens effectively at the same time as an authorization. It's also known as an immediate payment.
Adapting to changes in FinTech is an ongoing challenge for financial institutions, but failing to keep up can mean sacrificing business. Meeting the demand for real-time transactions will help your institution keep pace with today’s borrower expectations.
Related Reading: What Do Real-Time Payments Mean for Lenders?
Why Digital Payment Options Resonate with Today’s Borrowers
The era of in-person transactions is fading in the rearview mirror of a society that has recently weathered its first global pandemic. In the wake of COVID-19-related shutdowns and the mass migration to working from home, even the most reluctant adopters of digital technology are now competently using video messaging platforms, mobile apps, and web services as many continue working in a remote environment.
The click-of-a-button ease of access that we’ve become used to while shopping on Amazon and ordering an Uber has shifted consumers’ expectations of payments.
According to Pymnts, “Consumers expect payment capabilities to be embedded in the services they use and to be able to execute transactions seamlessly, without having to fetch card information or toggle between apps or screens. These dynamics were already present before the pandemic hit, but the crisis has been a force multiplier for these trends, hastening the obsolescence of cash and greatly increasing the share of retail commerce transacted online.”
Given the fact that the penetration of digital payments reached 78% in 2020, if your institution was planning to expand digital payment options to your account holders in the next few years, you are now even further behind the curve.
Conclusion
If your financial institution wants to meet the expectation of today’s borrowers, you’ll need to be prepared and equipped to facilitate payment transactions quickly and securely through an online payment portal or other digital platform. You’ll also want to offer payments options that delight all of your borrowers.
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