Nearly 1 in 5 consumers repay loans by calling customer service
Sixty per cent of consumers wish the experience of managing and repaying loans was easier, an 39 per cent increase from similar research in 2021, according to PayNearMe.
The Santa Clara, Calif.-based electronic billing and payments provider surveyed more than 1,574 consumers in the U.S. to produce its report, Consumer Trends Driving the Future of Loan Payments,
PayNearMe found that while 82 per cent of consumers are likely to walk away when the customer experience (CX) aspects of loan repayment are poor, they are ready to reward good CX. In fact, 79 per cent would feel an incentive to give a lender more business based on an “exceptional” experience.
Better CX would likely involve taking some of the effort off their plate. For example, 80 per cent would like their loan information prepopulated on online forms, and 32 per cent said they get frustrated by having to repeatedly re-enter their card or bank account number.
Elements of a poor experience cited in the report include having limited payment options. This doesn’t mean consumers want to stick with one form of payment, though: 40 per cent said they wanted to be able to use debit cards one month and digital options like PayPal on their next billing cycle.
Though 59 per cent said they would be likely or very likely to repay loans with a digital wallet, meanwhile, cash is alive and well. PayNearMe found 84 per cent of those who said they pay with cash want the option to do so at a retail location like a drug store or grocery chain instead of lender’s brick and mortar location.
Overall, 69 per cent said having a tailored loan repayment experience is important, and PayNearMe argued it doesn’t have to be that hard.
For example, consumers could receive a reminder text message or email that
includes a personalized link taking them directly into their payment flow,” the report’s authors wrote. “This experience eliminates the need to remember due dates and login details, or enter loan information, making the payment experience fast and easy.”
360 Magazine Insight
PayNearMe obviously wants to emphasize the increased trend towards digital payments with this research, and there’s lots of advice here about the importance of effective mobile design and being able to pay by scanning QR codes.
That said, this is an interesting study because it focuses on an often-overlooked point in the customer journey.
So much discussion of CX strategies, including those in financial services, tend to focus on how to attract customers and make onboarding and initial transactions as streamlined as possible.
The fact 19 per cent of people are reaching out to lenders’ contact centers shows there’s not enough being done to communicate the available options. Digital payment options won’t completely solve this issue based on the continued preference to use cash.
Instead, brands should be just as “omnichannel” in their thinking here as they tend to be with their marketing. Besides e-mail and text, direct mail is still a good way to outline the loan repayment experience they’re trying to deliver. As the report notes, artificial intelligence (AI) will probably help brands in this space better understand individual customer preferences and customize experiences accordingly.
No one likes having to repay loans, of course. That’s why it’s such a critical area to get CX right.
