By Justin Jackson
Today’s financial institutions are operating in a world that is more competitive than ever before, where consumers compare their digital banking service to all other digital experiences—and expect everything to be at their fingertips.
As more consumers move to digital channels to conduct financial activities, it is important to not only offer more robust capabilities through those channels, but to ensure that customers are aware of those capabilities and know how to use them.
The vast majority of financial institutions offer online banking and bill pay, and in recent years many have added person-to-person (P2P) payments. According to Fiserv’s recent Expectations & Experiences consumer trends survey, bill pay is the most used online banking feature, used by six of every ten online bank customers within the 30 days prior to the survey. This is a stark contrast to another data-point: the same survey found that two out of five consumers did not know whether their financial institution offered P2P payments.
Consumers want the ability to pay other people electronically through their financial institution.
But if they are unaware of the service—or how it can benefit them—adoption and usage won’t grow.
The integration of P2P payments with online bill pay is one way to address lack of awareness, while simultaneously simplifying payment options for users. Among a group of more than 1,000 financial institutions that implemented this integrated approach, there was a 38% increase in personal payment transactions and a 41% increase in users—within six months. Users embraced the ability to use P2P payments to pay a friend or family member from the same place they typically pay their bills.
It’s important that the integration be accompanied by a thoughtful introduction to the service within the product. When consumers log into online bill pay for the first time after the integration, they should be greeted with new interstitials and banners educating them on the new P2P capabilities. This educational collateral should also provide direct access to activation for unregistered users—and encourage usage for current users.
This is a good opportunity to highlight the different ways customers can use P2P payments—a chance to bring the payment option front and center just as people are paying their bills. That way, consumers see clear, relatable examples of how P2P payments can simplify their lives—all within the familiar setting of their bill payment service.
Here are some key takeaways that can be applied to driving engagement and adoption of digital services, especially P2P payments:
- Increase awareness to increase adoption – Many consumers are unaware of all of the services offered by their financial institutions. Integration of related payment capabilities can help increase awareness while also improving the user experience. Awareness can also be increased by promoting additional features of online banking within the service itself, or through more traditional marketing efforts in the branch or via targeted marketing.
- Educate the consumer – Not only does the consumer need to be aware of the availability of the service, but they also should be shown how it can be used and how it can benefit them. Display clear, relatable examples of what P2P payments are and how they can make users’ lives easier. P2P payments save the time and hassle of dealing with checks or cash, making it easier to pay someone and giving the user more control over how and when they pay others. P2P payments also benefit the recipient, because payments are deposited directly to the recipient’s own account. Specific examples of how P2P payments could be used by consumers to simplify their lives might include a parent sending money to a child in college, sending money to a roommate to cover rent, or collecting money from a group for a shower gift. If people identify with ways to use the service, they are more likely to give it a try.
- Reassure on security – More than half of consumers view their financial institution as a partner. It is important to communicate security practices in order to maintain this relationship with them. Clearly communicating to customers that a service is secure and being transparent about the methods in place to protect confidential information will boost consumer confidence in the service.
With consumers increasingly conducting financial activities through digital channels, the combination of digital payment options into a single experience enables them to pay who they want, when they want. It is especially important for smaller and community banks to offer this kind of functionality as they look to compete with nontraditional financial providers in a digitally focused banking space. Financial institutions that are able to fulfill the needs of their consumer base will enjoy higher customer retention and a return on investment in their digital channels.
Justin Jackson is vice president of integrated payment and bill payment in the Digital Banking Group at Fiserv. Email: [email protected].
Online training in digital, mobile and social media from ABA.
