If you need consolidated evidence that there are tremendous advantages that electronic collections and/or payment networks promise to collectors, look no further than Bank Technology News‘ recent article, “The Innovators 2007.”

I call attention to two impressive details having to do with customer enrollment:

• Bank of America reported that online customers are 27% more profitable than traditional customers, with deposit balances 15 percent higher and loan balances 28 percent higher.
• SunTrust Banks found that customers who receive at least three e-bills per month have a 78 percent lower attrition rate and were 86 percent more profitable than offline customers. The implementation of the Web RXP version prompted a strong initial boost in the number of customers signing up for ebills, says Sarah Overcash, SunTrust avp and online bill-pay product manager, with nearly 30 percent of the bank’s active online base currently receiving at least one e-bill.

Consider this in relation to the rather sluggish response by the Credit and Collections industry to move towards on-line self-service payment enrollment channels. As Henry Ijams recently expressed to me, “In a credit crunch situation where an individual is only able to pay three out of four bills on-time, he’s going to skip the one that’s a pain to pay.” Furthermore, customers used to paying with a self-service on-line channel are more likely to take advantage of auto-payment enrollment tools.

On that note, consider the advantage of auto-pay - the visibility it provides into the future of that customer’s payment record - the repetitive payment it encourages - the ease of payment the customer becomes accustomed to. Now ask yourself, what percentage of your customers pay you automatically?

OR, perhaps equally as important, are you able to account for clients who are using third-party on-line banking tools to pay you automatically? And is it possible that you can encourage that payment behavior to complement your own enrollment program?

PayStream recently published a vendor buyers’ guide on Receivables and Collections Management - The complementary white paper and full guide are available here.

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• New SaaS content management app - December 2nd, 2007
• Automating Self-Service IT - November 21st, 2007

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