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In the past decade, financial institutions have had to adapt to growing consumer expectations for interactions that are fast, easy, and secure—in other words, frictionless. Frictionless payment solutions make it easier for consumers to complete transactions in whichever way they find most convenient. This in turn creates a ripple effect of reducing queue sizes and wait times for non-transactional customers, allowing employees to be more attentive and provide better service to their members.
To meet consumer demand for a frictionless experience, financial institutions are beginning to leverage loan payment solutions that put borrowers in the driver’s seat. By providing account holders with the most convenient and frequently used options to complete transactions easily and independently, these financial institutions are able to rise to the level of excellence in terms of meeting the modern consumers’ expectations of having multiple, easily accessible payment options.
Keeping up with consumers’ needs and trends in the latest technology is important for financial institutions that want to gain flexibility, improve their borrowers’ satisfaction, increase their payment activity, and improve overall operational efficiency. In this blog, we’ll discuss the importance of creating a frictionless loan payment experience for your borrowers.
Omnichannel Payments Options
For a truly frictionless experience, consumers expect to have multiple options for making loan payments. This demand for broader choice in payments by consumers is due in large part to the very high growth in electronic payments of all types, across all markets.
Omnichannel is a comprehensive and intentional strategy to support loan payments across the board as the critical customer service touch-points at a financial institution, including online. Omnichannel ensures that 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.
More and more, today’s consumers expect to be able to “set it and forget it” when it comes to making payments, because they’re electing to have payments automatically deducted from their savings or checking accounts on a reoccurring basis. Using a reoccurring billing system is a very popular method for consumers to pay for many monthly services. This option not only makes it more convenient for your customers, but it almost guarantees you will be paid on time.
Staying organized is a top concern for customers when it comes to paying bills each month. By sending email reminders, or having them billed on a reoccurring basis, your financial institution can make your account holders’ lives easier while increasing customer satisfaction. Having the ability to plan out their payments by skipping recurring monthly payments online also helps keep your customers on track.
With the growing demands of consumers who are expecting frictionless loan payment options, not providing these payment channels may negatively impact your customer loyalty. Offering flexible, high-quality self-service payment options allows your institution to increase operational efficiencies and deliver greater convenience to your account holders.
Changing Payment Preferences: Mobile Payments
According to a survey by Pew Research, “Mobile payments technology allows customers to make online and point-of-sale purchases, pay bills, and send or receive money from their smartphones via the Web browser, an app, or a text message.”
Mobile payments or “digital wallets” are fast becoming the norm, especially among younger consumers. The same report found that 46% of Americans have made a mobile payment—that’s approximately 114 million people. As more and more people adopt smartphones and mobile technology, experts expect to see a growing trend toward mobile payments in the next several years. Millennials and Gen Xers currently make up the majority of those making payments from their mobile wallets, but the technology appeals to all consumers who want to receive text alerts, participate in rewards and discount programs through mobile aps, and opt in to receiving electronic receipts.
The use of mobile payments among consumers is linked to an optimistic view of FinTech innovations in terms of ease of access, convenience, cost, and privacy. To make sure your financial institution is competitive, you must not only offer mobile services, but you must also shift your institution's priorities toward creating a more mobile-centric consumer experience.
If your institution allows customers to accomplish their financial tasks on their devices anytime, they'll have no reason to take their business elsewhere. Capitalize on these trends now to grow your existing relationships and make sure your financial institution is top of mind for new prospective customers!
To gain insight into payments preferences among different age groups, download our ebook.