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The lack of new account features like easy biller setup, multiple payment options, and timely payment confirmations are to blame because consumers have become accustomed to frictionless digital experiences in other areas of their lives, such as shopping and entertainment.
FREMONT, CA: According to a new study commissioned by BillGO, an innovator in bill pay services, most banks continue to lose bill payment customers to biller sites due to outdated services. Out of the 15.5 billion bills paid by U.S. consumers in the last 12 months, only 2.1 billion were spent using bank bill pay. Accustomed to frictionless digital experiences in other areas of their lives, such as shopping and entertainment, most bank bills pay experiences do not meet today's highly connected consumer expectations. The lack of new account features like easy biller setup, multiple payment options, and timely payment confirmations are to blame because consumers have become accustomed to frictionless digital experiences in other areas of their lives, such as shopping and entertainment.
This is just one of the findings of How Americans Pay Their Bills (infographic), a national study conducted by Aite Group whose highlights were released today. The report provides an up-to-the-minute, comprehensive overview of American bill-paying habits, identifying those channels and payment methods consumers prefer as well as how different demographic segments manage their financial obligations.
"The findings in this report confirm how imperative it is for banks to rethink their legacy bill-paying platforms if they intend to win over the next generation of consumers," said David Albertazzi, Research Director, Retail Banking & Payments, Aite Group. "A key finding in our new study is that Gen X and Gen Z expect immediate, frictionless transactions and banks are missing the mark. They must provide a better bill-paying experience if they intend to remain relevant."
The 106-page report offers a wide array of insights into how financial institutions miss out on opportunities to serve better and retain customers and what they need to do to meet consumer expectations better. The report also found that consumers continue to reject legacy banking bill-paying platforms, which are perceived as inefficient. In most cases, they prefer making payments directly to service providers. Among the 15.5 billion bills paid in the last year, only 35 percent were set up regularly, underscoring the need for more efficient and consumer-friendly platforms. Most respondents claim they forgo some bills like charitable donations and student loan payments o ensure they can meet their mortgage, rent, and utility obligations.
"We compiled this report to give the industry an honest picture of bill-paying trends in today's economy," said Dan Holt, CEO of BillGO. "The data should serve as a wake-up call. Consumers expect a modern and centralized digital experience when managing and paying their bills, complete with real-time confirmations. Delivering anything less represents a missed opportunity."