Four Examples of Customer Experience Innovation in Consumer Finance

The consumer finance sector is no stranger to digitization. Lenders, banks, credit unions–the entire industry is getting on board with technologies that help businesses offer a better experience for customers. Take a look at these examples of customer experience innovation to see how financial institutions are shifting to a customer-centric model and delivering more seamless payments experiences.

1. Adopting Payments as a Service (PaaS)

Legacy payment systems often can’t offer financial institutions the ability to manage large amounts of data efficiently. The processing power and IT resources involved are simply too high of a barrier for many consumer finance companies. To solve this problem, some are turning to Payments as a Service (PaaS) solutions to enhance data management.

With PaaS, financial institutions gain more visibility into their vast troves of data. Providers store data securely on cloud servers, taking over some of the burden of safe data storage and management. With better data management, they can draw deeper insights, which can be applied to improving customer experience. For example, understanding how and when consumers pay can lead to smart reminders and better feedback for natural language processing based chatbots. 

Chief Business Officer at Infosys Finacle, Sanat Rao said in a recent Payments Journal podcast that, moving forward, “Payments as a Service is something that will be embraced by all players and consumers, and will be an area banks really focus on.”

2. Digitizing Cash Payments

While in-person cash payments may represent a smaller proportion of your bill payments, it’s still an absolute necessity for many unbanked and underbanked Americans. And contrary to the catchy headlines on fintech blogs, cash isn’t going away. There will always be a segment of your customers who prefer or need to pay with cash.

OneMain Financial, a national lender with branches across the country, partnered with PayNearMe to ensure its customers had the option to pay in cash, without having to travel to branch locations. They used PayNearMe’s payment barcode technology, which allows customers to pay in cash at any retailer within an expansive network of 27,000 locations.

This flexibility makes it easy for all of the lender’s customers to make payments.

• OneMain Financial sends a unique payment barcode to the customer’s phone.
• They can then visit any retailer within the network, including national chains such as CVS Pharmacy and 7-Eleven, scan the barcode at the checkout, and pay in cash.

This creates a win-win for the lender and consumers. For bill payers, they can quickly and safely pay with cash at a nearby retail location instead of driving to a bank branch. And for OneMain, they no longer have to manage the risks and inefficiencies of on-site cash payments, instead converting them into digital transactions in the same way they collect card and ACH payments. 

3. Issuing Contactless Cards

Since the pandemic, contactless payments have increased dramatically. According to a Visa survey, 54 percent of US consumers would switch companies simply over the availability of contactless payments.

Major large financial institutions such as Capital One, American Express, and Chase already have contactless credit and debit cards but now smaller companies are coming out with contactless options. Upgrade, a three-year-old alternative lending company based in San Francisco, decided to give its customers contactless cards after the WHO encouraged people to use digital payments to help reduce the risk of spreading the virus.

In addition, there has been a steep increase in the adoption rate of digital wallets such as Apple Pay and Google Pay. These solutions can turn any credit or debit card into a contactless option, allowing consumers to get all the perks of a contactless card without changing out the physical card. 

4. Offering Digital Disbursements

Disbursements have long been a manual, paper-based process for most financial institutions. Digitizing the experience, whether through push to card disbursements or funding directly through ACH, is a way to offer near instant funds to customers. Digital disbursements offer a faster, more secure way to handle outbound payments, including:

• Loan funding
• Refunds
• Overpayment returns
• Insurance claims

Consumer finance organizations are using digital disbursements to create fully online lending experiences that happen completely electronic and quickly.

Innovation Drives Better Outcomes for Customers and Financial Services

Customer experience innovation is key to living up to evolving needs. Customers today are looking for flexibility, seamless bill pay, and payment experiences that meet them where they are right now.

Are you ready to meet those needs? PayNearMe is an innovative platform that simplifies payment processing for customers and businesses. We’re also always updating our platform with the best technology. Request a demo and see how PayNearMe can help your business offer a better customer experience.

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Research: Consumer Trends Driving the Future of Loan Payments