Client Success Story: Improved Repayments by Adding SMS Channel to Digital Communications for Delinquent Customers
.jpg)
Online-only banks, or neobanks, have gained popularity with consumers by offering no-fee digital checking and savings accounts, competitive loan and savings rates, cash advances and the ability to open accounts with no minimums—all made possible by not relying on legacy banking technology and costly networks of physical branches.
But these kinds of online institutions are not necessarily well-versed in digital communications with customers who have fallen behind on payments. How do you know which digital channels are going to resonate with your customers, especially for sensitive delinquency communications? The answer is not which, but which combination.
For one leading neobank, their customers had come to expect a frictionless, digital experience when using the bank’s services, which are available via a user-friendly app. It’s no surprise then that this neobank had already switched to digital communications for customers who fall behind on their payments after conducting a head-to-head comparison of Retain by TrueML Products’ email capabilities versus outbound calling for customer engagement and repayment (read more on that email versus calling test here).
But email engagement rates alone, while better than the call-based approach, hinted that some customers were still not responding, leaving room for improvement—so they turned to Retain to explore adding SMS (text messaging) into their past-due customer communication mix.
This neobank already knew the performance and cost-saving benefits of automating its digital communications for customers with delinquent accounts using Retain, but by utilizing a multichannel, digital approach—including SMS—it was able to engage customers even more effectively while keeping operational costs low.
Adding SMS messaging as a channel in their digital customer communications for their in-house debt collection efforts delivered results that did not disappoint:
- 9% payment rates increase four months after adding SMS
More than $2.6 million generated over those four months
ROI of 83:1 thanks to lower operational costs and higher engagement and repayment
Engagement increased to 78% after adding SMS