FICO Survey: APAC Consumers Taking Longer To Pay Bills

SINGAPORE — 21 December, 2016

HIGHLIGHTS:

• 59 percent of senior Asia Pacific collections managers indicated that consumers took longer to pay their bills in the past year
• 41 percent have seen the highest growth in 60-days past due payments, while 72 percent have registered a rise in the number of first-time delinquents
• Older Millennials aged 25-34 years were most responsive to early collections efforts while Gen-Xers (aged 35-55) took the longest time to pay their bills
• Respondents said automated customer communications for collections helped improve customer satisfaction and ensured customers paid bills between two days to two weeks sooner

For more information: http://www.fico.com/en/products/fico-customer-communication-services

In a recent poll, three in five senior collections managers from banks, telcos, and utilities across Asia Pacific revealed that consumers in the region have taken longer time to pay their bills in the past year. The 60-days past-due segment has seen the highest growth according to 41 percent of respondents, while 72 percent of collections managers have also registered an increase in the number of first-time delinquents.

“These figures show the need for businesses to react to dynamic changes in consumer behavior across the Asia Pacific region,” said Dan McConaghy, president for FICO Asia-Pacific. “Earlier this year, Moody’s reported that household debt in Asia has grown at an average of 13.5 percent a year. The rapid rise of the middle class in the region’s emerging economies and the growth in services that provide some type of credit are two key reasons for the changes in collection rates this year.”

Senior collections managers said that mobile communications and automated collection strategies were very effective at helping customers make payments. 59 percent of respondents said consumers paid their bills one to two days faster while 25 percent said their time-to-collect improved three to fourteen days.

Further to this, 78 percent of respondents reported higher customer satisfaction rates using automated customer communications, and reported that 60 percent of consumers will rate the experience between seven and ten. 

The survey revealed that older Millennials (24-to-35 years old) make up the greatest portion of early collections. By contrast, 47 percent of collections managers said Generation X, or consumers 35-55 years old, a made up the largest portion of late collections activity. This shows that Millennials cure better than their older peers and respond to collections in a timely way.

“It is encouraging to see that Millennials in Asia Pacific are more responsive and willing to take speedy action on bills when approached using their preferred communications channels”, said McConaghy. “Given that 60 percent of the world’s Millennials will be living in Asia by 2020, it’s important that businesses adapt to their expectations of digital service channels that are easy to use.”

In terms of the growth of collections cases in 2017, the survey showed that three in four collections managers anticipate a 10-25 percent increase next year. Half of the Chinese attendees expected there would be a 25-50 percent or greater increase in collections cases. Most put this down to natural business growth as well as an increase in the number of higher-risk customers their companies are willing to sign up.

“Automated collections is the perfect solution to deal with this growth while keeping a lid on costs and ensuing all collections remain compliant with each market’s regulations,” said McConaghy.

FICO conducted a survey of 37 senior collections managers from across Asia Pacific in November 2016 at its FutureCollect event.

About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 170 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.

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