New research from Fiserv reveals consumers value choice when it comes to billing and payments – and these choices lead to increased customer satisfaction and retention. This is especially true for financial institutions acting as a biller, defined as a financial institution that issues recurring monthly bills and statements and collects payments for business and personal loans; for example lines of credit, mortgages, car loans, etc.
Research from our eighth Annual Billing Household Survey found that the majority of U.S. households now use multiple methods to pay monthly bills. From paying on a mobile device to writing a traditional paper check, these “bill pay omnivores” use an average of three different payment methods to pay their bills every month and have been conditioned to expect multiple easy and convenient ways to receive and pay bills according to their needs
To remain competitive, banks should optimize their billing and payment offerings by making it convenient for customers to view and pay their bills in their preferred channel. Today’s financial institution should address four top-line strategies to help them achieve consumer expectations:
Adopting a mobile first approach. The number of U.S. households who turn to smartphones to pay monthly bills continues to grow. In 2015, 33% of households paid at least one bill on their mobile phone compared to 16% in 2013. Overall survey results indicated that the top reasons include convenience, ease of use, on-the-go access and time savings. In fact, paying a bill is the number one reason customers visit a service provider’s mobile site. Furthermore, 65% of consumers surveyed said having the option to pay bills using a smartphone helps improve their satisfaction.
As consumers warm up to a new way to pay, financial institutions can leverage mobile payment methods to retain and attract customers while enhancing adoption of mobile services as well as consumer experiences.
Offering paperless e-bill. Whether it’s time savings, reduction of clutter or environmental impact, more and more consumers are electing to turn off paper bills in favor of e-bills. While it may seem counterintuitive to present e-bills at both the bank’s bill pay site and through another online banking bill pay service, it can lead to higher customer satisfaction and retention, and a means of establishing an actionable competitive presence among peer banks. Whether consumers receive e-bills at a financial institution’s bill pay site or a biller site, 46% surveyed said viewing paperless bills increased their satisfaction and 25% increased their loyalty to that service provider.
This is especially true for millennials. Fifty-five percent of millennials are interested in going paperless with bill presentment offers, the largest majority of any other generation. Banks promoting e-bill capabilities help to connect with a strategic and important target audience.
Providing emergency payment options, bill pay reminders and alerts. When a payment is late or nearly late, consumers want multiple options for making urgent, same-day payments to avoid dreaded late fees. This is especially true for mortgage and auto loans, which ranked highest among bill priorities for consumers according to our survey. While lending products cannot take credit card payments, banks have been providing the ability to make debit card payments with or without a fee to process and post payments the same day, similar to expedited shipping. When asked about expedited bill payments made through a financial institution’s online bill pay service, 52% of respondents said having such an emergency payment option would increase their satisfaction with their bank or credit union.
Likewise, intelligent digital bill pay reminders are one way the banks can help consumers manage their financial lives. Bill pay alerts become a digital “parent,” providing useful nudges before a payment is missed. The research found that 59% of respondents expect bill pay alerts and reminders, and 77% of respondents interested in receiving alerts say the functionality would enhance their satisfaction with a bank.
Options for traditional offerings: walk-in bill payment. The availability of consumer technologies, especially mobile, redefines the billing and payments environment as new channels emerge and traditional payment methods, such as cash and walk-in bill payments remain popular. Since consumers pay bills using a variety of payment methods, it is necessary to meet every need and preference, including consumers who prefer to pay some bills in cash. Usually, walk-in payments help solve the problem of the late-payer with the benefit of an immediate, near real-time payment account crediting, along with personal interaction and issuance of a physical receipt as proof of payment.
The billing and payment experience remains strongly connected to satisfaction. Financial institutions must meet the diverse needs of customers with multiple options for billing and payments, along with extras such as same-day payment options and due-date alerts. Each of these capabilities help to extend banks their lending businesses and build stronger, more loyal relationships with customers across all channels.
Mr. Leiserson is director of Research at Brookfield, Wisc.-based Fiserv. He can be reached at [email protected].
