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SURVEY: BANKS PICK WRONG CHANNEL TO REMIND UK CONSUMERS OF LATE PAYMENTS

FICO survey shows credit grantors prefer letters but consumers prefer SMS

“Stop sending us letters when we pay late and start texting us.” That was a resounding message from UK consumers in a new survey on lender communications by Silicon Valley analytics firm FICO. While 31 percent of respondents said credit grantors send late-payment reminders via the mail, making it the most-used channel, only 14 percent prefer that channel. The top preference was for SMS messages (42 percent), with email following at 23 percent.

“Consumers consistently tell us that when it comes to late payment reminders and other debt-related messages, their banks are not communicating with them in the ways that they would prefer,” said Steve Hadaway, general manager for Europe, the Middle East and Africa at FICO. “The UK does seem to be ahead of the US in terms of digital transformation, some 28 percent of UK respondents said their bank uses SMS to communicate with them, compared to 15 percent in the US. But UK and US banks are both pretty far from matching channels with customer preferences.”

The survey also found that:

  • Twice as many people in the UK said they would be most likely to respond to a collection message that is friendly, helpful, and delivered through a trusted source (25 percent) than said they would respond because the lender reduced or restructured their debt (12 percent).
  • Websites or online portals were the preferred method of making late payments (30 percent), with phone calls a distant second (18 percent).
  • Two-thirds of respondents (65 percent) said they would be “not at all comfortable” with payment reminders showing up in Facebook, Facebook Messenger, Instagram or other social media channels.

“What’s most important in these findings is the spread of opinions,” said Russell Robinson, who manages FICO’s mobile communications business in Europe, the Middle East and Africa. “There is no one best way to communicate with your customers — people have different preferences, and they expect lenders to remember that and treat them as individuals.”

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