Except for when a customer goes past due. When it comes to collections, banks are not leveraging their coveted place on the front screen of their customers go-to, go-anywhere devices.
This is a mistake.
I made a presentation last week at the Consumer Bankers Association annual convention on "tailoring the customer experience to enhance satisfaction and results" where I shared the findings from two recent consumer surveys we've conducted on what customers expect from the companies they do business with in terms of proactive engagement and collections.
Consistent in both these surveys was compelling evidence that customers want to hear from you before an issue has a negative impact on their lives:
To avoid issues like late charges for past due payments and negative reports to the credit bureaus, the surveys found consumers welcome proactive outreach from their creditors in a variety of channels, including email, interactive voice messages, text messages and push notifications to their mobile devices.
But, instead of leveraging this preference, banks are avoiding the use of these channels in their collections strategies, even those banks that are actively exploiting them for marketing and customer service. While that might be a reasonable, if overly conservative, policy from a consumer privacy and legal perspective, it has negative implications for both collections results and customer satisfaction. As one attendee noted after the presentation,
"When we stop using the channels that the customer expects us to communicate through just because they are now in collections, we run the risk of confusing them and losing their trust."
And those legal concerns may be overblown. If a customer has opted in to communications about their account in these channels for purposes of marketing and customer service, that consent should extend to collections. Even if the "opt-in" is based solely on the customer having provided their mobile number as their point of contact, the FCC has recently reconfirmed that this is evidence of the prior express consent required under the TCPA for automated communication to wireless numbers. In their just released declaratory ruling on the GroupMe petition, the commission said,
"Our clarifications here are consistent with the 1992 TCPA Order and the Commission’s 2008 ACA Order. The Commission stated in the 1992 TCPA Order that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” Based on this reasoning, the Commission found in the ACA Order that a consumer who provides his or her wireless telephone number on a credit application, absent instructions to the contrary, has given prior express consent to receive autodialed or prerecorded message calls “regarding the debt” at that number, including autodialed and prerecorded debt collection calls from a debt collector acting on behalf of the creditor."
Furthermore, our surveys found that when customers provide their mobile number, 84% believe no further opt-in should be required:
Given this, why are banks so hesitant to leverage mobile communications in collections? There may be concern about the ongoing risks of TCPA litigation, but the FCC ruling and recent court decisions confirming that "provision = consent" should give collections executives encouragement to pursue a change of policy.
More importantly, not doing so may leave increasing numbers of mobile-only customers asking "why didn't you let me know?" as they begin shopping for a new bank.