Shifting Landscape for Billing and Payments: Are you Prepared?

Transcription

1 Shifting Landscape for Billing and Payments: Are you Prepared? The latest research and insights on how the changing landscape will impact your business. Eric Leiserson, Senior Research Analyst, Fiserv March 5, 2014

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3 Agenda The Shifting Billing and Payment Landscape The Importance of Billing and Payment The Latest Bill Presentment, Payment and Mobile Research Insights Questions and Answers Eric Leiserson Senior Research Analyst, Fiserv 3

4 The Shifting Billing and Payment Landscape

5 The Vatican Pre-Smartphone Reference: Forrester Research Inc. 5 Reference: Forrester Research Inc.

6 The Vatican in 2013 Reference: Forrester Research Inc. 6

7 A Gen Y and Mobile Effect is Fundamentally Changing the Billing and Payment Landscape 7

8 Leading to New, Novel (and Fun) Ways to Pay Bills; Snap to Pay 8

9 USPS: Postage Going Up, First Class Mail Volume Going Down 140,000 First Class Mail Volumes (in Millions) and Postage Rates (in Cents) First Class Pieces (M) 120, ,000 80,000 60,000 40,000 20,000 First Class Mail Volume First Class Postage Rate Postage Rates (Cents) 0 0 Source: USPS Household Diary Study; USPS internal assessment; The National Bureau of Economic Research

10 Proliferation of Methods and Channels: Bill Pay Adoption Among U.S. Households Mobile 16% Biller Site 62% Bank Sites 36% Phone 17% Check 53% Walk-In 28% Source: Billing Household Survey, Fiserv, Inc., 2013

11 Proliferation of Methods and Channels: Bill Pay Adoption Among U.S. Households 83% of Consumers Use More than One Bill Payment Method Number of bill payment methods consumers use monthly +10% Increase in the average number of bill payment methods vs Source: Sixth Annual Billing Household Survey, Fiserv 2013

12 Proliferation of Methods and Channels: Bill Pay Adoption Among U.S. Households We Have Become Bill Payment Omnivores

13 Challenges for Billers and Insurance Companies In This New Operating Environment Please describe what you think the biggest challenges are to electronic billing and payment. 13 Source: Survey of 112 Customer, Billing and Payment Professionals from CS Week and CRS2013

14 14 The Importance of Billing and Payment

15 Why ebilling and Payment is Important A successful billing and payment strategy can: Reduce costs Increase retention and satisfaction Drive greater digital channel use Encourage customer self-service Improve DSO Cross sell products & services Sources: Forrester Qwest Case Study, 2011 Billing Household Study, Con Edison Value of E-Bill, epost Utility Research (Canada), Forrester Beyond The Bill Thought Leadership Paper, Fiserv E-bill Efficiency Analysis, AEP Case Study, Exelon (Com Edison) Segmentation Analysis and Case Study, Fiserv Mosaic Cluster Research, The Future of Electronic Bill Presentment & Payments, InfoTrends, 2011, NACHA s PayItGreen Survey, 2010, Javelin Strategy and Research, BlueFlame Consulting CEBP e-bill Benchmarking Study,

16 Customers Visit Biller Sites Mostly for Billing and Payment; Eliminates Much of the Need to Call 82% have visited the website from whom they receive a monthly bill For which of the following reasons, if any, did you visit their website? Pay a bill Access bill and Pay history Shop for products and services Use online self service options Contact customer service 22% 18% 17% 45% 82% Take advantage of marketing 7% 71% said conducting these activities prevented a phone call to customer service 16 Source: Billing Household Survey, Fiserv, Inc., 2013

17 Billing and Payment Plays a Key Role in Insurance Customer Satisfaction Index 2013 U.S. Household and Auto Insurance Studies 17

18 JD Power Reports Paperless E-bills and Recurring Payments Boost Satisfaction Rates At utility website Automatically deducted from checking/savings account Through bank's online bill payment Recurring credit card payment Customers who receive electronic bill Customers who receive a paper bill Setting up autopayments, increases satisfaction more than 150 points Base: Residential Electricity Customers Source: J.D. Power Associates, 2013

19 19 The Shifting Landscape: Bill Presentment

20 Insurance Companies E-bill Goals and Expectations Compared to Other Billers What percentage of your total bill and statement volume is paperless today? What are your future expectations? 71% 24% 38% 54% 30% 44% 58% 18% 56% 28% 41% 59% Today Next Year In 3 Years Total Banking/ Financial Insurance Telco/ Utility 20 Source: The Future of Multi-channel Transactional Communications in the U.S., InfoTrends, 2013

21 Opportunity and Barriers to Adoption Level of interest in viewing paperless e-bills at billers websites in the next year What are the main barriers to receiving and viewing e-bills? Please mark all that apply. Might forget because I use paper to remind me 43% Neutral 26% Interested 27% Confortable with current system 42% Record keeping 37% Not interested 20% Very interested 27% Security concerns 21% Some bills easier to read 20% Source: Billing Household Survey, Fiserv, Inc.,

22 Value Propositions for E-bill Among Those that Adopted it Please indicate the one reason that was most important to your decision to sign up for your e-bill service. Convenience all I have to do is click and pay 30% No more stacks of paper and clutter Viewing and paying bills electronically saves paper and energy 18% 22% No more bills lost in the mail 12% 22 Source: Billing Household Survey, Fiserv, Inc., 2013

23 Popular Policies for Transactional Customer Communications Which of the following policies do you currently have in place for transactional customer communications? Customers choose whether or not to turn off paper 36.8% Paper is automatically turned off immediately after electronic adoption New customers are defaulted for paperless delivery 23.9% 23.5% Paper is automatically turned off at some point after electronic adoption Customers must pay to receive hard copy bills by mail 9.4% 14.1% Source: The Future of Multi-channel Transactional Communications in the U.S., InfoTrends, 2013

24 Timing is Everything: Aggressively Engage New and Recurring Payments Customers and Utilize CSRs When would you prefer to activate a paperless e- bill? Please select all that apply. When I set up a new online account with a biller When I start paying online 45% 43% When I m offered an incentive or sweepstakes to go paperless When I set up a recurring payment 28% 25% When I call customer service 9% 24 Source: Billing Household Survey, Fiserv, Inc., 2012

25 The Shifting Landscape: Insurance Bill Payments

26 Car Insurance Bill Payment Volume 2010 vs. 2013, by Channel and Method Channel Method Source: How Americans Pay Their Bills: Sizing and Forecasting Bill Pay Channels and Methods, , Aite Group, September 2013

27 Home Insurance Bill Payment Volume 2010 vs. 2013, by Channel and Method Channel Method 27 Source: How Americans Pay Their Bills: Sizing and Forecasting Bill Pay Channels and Methods, , Aite Group, September 2013

28 Mobile Phone Billing and Payment

29 Mobile Bill Payments Surging; Perceived Value of Service Increasing as Well Why did you choose to pay bills using your mobile phone? +150% Increase in mobile bill payments among smartphone owners Convenient to pay when on the go Anytime access Saves time 55% 49% 70% Easy to do 46% Source: Billing Household Survey, Fiserv, Inc.,

30 Percents of Mobile Bill Pay Users Paying Each Type of Bill Increasing Please indicate which bills you paid using your mobile phone. Cell phone 56% 55% Cable or satellite Electricity Major credit card Insurance ISP/Broadband 39% 35% 30% 20% 29% 20% 23% 19% 21% 16% YR 2013 YR 2012 Department store 20% 15% (Base: Use smartphone to pay online) 30 Sources: Billing Household Survey, Fiserv, Inc., 2013 & 2012

31 Where Mobile Bill Payments are Made Of the bills you paid using the texting, browser or app capabilities of your smartphone how many did you pay Bank's mobile website Biller's mobile website App downloaded from bank App downloaded from biller SMS or text 26% 14% 24% 21% 18% 14% 35% 50% 52% 50% App from other provider 9% 11% Base: Use Smartphone To Pay Online 31 Source: Billing Household Survey, Fiserv, Inc., 2013

32 Paying Bills via a Smartphone Has a Positive Impact on Customer Relationships What effect would paying and receiving bills from a smartphone have on your relationship with a biller? More positive, 50% No Difference, 49% Less positive, 1% #1 Motivator to Pay Bills on Mobile Device? Using Camera to Capture and Input Bill Info 32 Source: Billing Household Survey, Fiserv, Inc., 2013

33 Send Bill Due Reminders and Promote E-bill How would you perceive a biller that sends you a reminder to pay a bill? Would receiving such due date reminders increase you likelihood of opting for receiving e-bills with no accompanying paper bill at biller s sites? More positive, 74% Yes 66% No difference, 25% More negative, 1% Not sure 20% No 14% Would prefer alerts come 5-7 days before bill is due (52%) or 8+ days before (26%) 33 Source: Billing Household Survey, Fiserv, Inc., 2013

34 Second Annual Mobile Bill Presentment and Payment Biller Benchmark Study: Insurance Findings 34

35 Insurance Participant Profiles Biller participation increased from 9 Insurance providers to 18 this year. By Bills Sent (Monthly) % Insurance 11 39% % Under 100k Over 1M 100k to 1M Source: Biller Mobile Bill Pay Benchmark Study, Blueflame Consulting for Fiserv, Inc.,

36 Overall Mobile Strategies and Customer Intelligence Among Insurance Companies Does your company have an overall customer mobile strategy? Have you surveyed your customers on what they desire from an overall mobile solution? 22% 11% 50% 17% Yes, 33% Don't Know, 22% 0% 20% 40% 60% 80% 100% No, 44% Already Deployed No, but will at some point Is Being Deployed Don't Know N = 18 Insurance Companies Source: Biller Mobile Bill Pay Benchmark Study, Blueflame Consulting for Fiserv, Inc.,

37 What Insurance Companies Desire to Achieve from the Mobile Channel in General Do you see the development of the Mobile Device channel providing a means to: Enhance & extend customer service Increase customer ebilling use Increase online self-service Meet customer demand Improve efficiency/ Business transformation Increase paperless & reduce print/mail expenses Additional Customer Communication Reach New customers who access thru Mobile Web New complexity, costs, challenges Market or sell products 78% 72% 73% 72% 73% 72% 64% 67% 73% 67% 36% 56% 27% 44% 46% 28% 27% 89% 100% 91% N = 18 Insurance Companies Source: Biller Mobile Bill Pay Benchmark Study, Blueflame Consulting for Fiserv, Inc.,

38 Insurance Companies Desire a Consistent User Experience for their Customers How important is it to offer consistent user experiences and interfaces across screen PC, Tablet and Mobile? Extremely Important 33% Important 44% Mid level priority 11% Not Important 11% N = 18 Insurance Companies Source: Biller Mobile Bill Pay Benchmark Study, Blueflame Consulting for Fiserv, Inc.,

39 Insurance Companies and Mobile Bill Presentment and Payment (MBPP) 39

40 Insurance MBPP Strategy and Deployment Does your company have a mobile billing and payment strategy? 22% 11% 50% 17% Yes, already deployed Yes, being deployed now No, will be deployed at some point Don't Know N = 18 Insurance Companies Source: Biller Mobile Bill Pay Benchmark Study, Blueflame Consulting for Fiserv, Inc.,

41 Business Case for MBPP Among Insurers: Customer Service and Savings from Paperless ebilling What are the primary drivers for your organization's consideration and/or adoption of Mobile Bill Pay and Presentment? Providing better service to customers 100% Potential cost savings Customer Acceptance/Adoption 67% 67% Potential increased ebill Adoption Wave of the future 56% 56% Matching Tablestakes Reaching out to new customers 33% 39% Other 6% N = 18 Insurance Companies Source: Biller Mobile Bill Pay Benchmark Study, Blueflame Consulting for Fiserv, Inc.,

42 Perspectives on Mobile Influence on Paperless Adoption Among Insurance Companies Do you think mobile devices will influence the adoption of electronic Bill Pay and paper statement turn-off? 18% 39% Yes, significant 73% 39% Some, incremental gains Potentially in the long run 17% 9% 6% No, only marginal gains N = 18 Insurance Companies Source: Biller Mobile Bill Pay Benchmark Study, Blueflame Consulting for Fiserv, Inc.,

43 Top Challenges to Deploying and Managing MBPP Among Insurance Companies What are your top 3 obstacles to deploying, managing, and/or maintaining customer adoption of mobile bill pay? IT Resource Challenge 83% Conflicting Priorities 72% Security Concerns 56% Complexity of the task 33% Benefits are difficult to quantify Lack of demand Customer Adoption Field too new and dynamic content 22% 11% 6% 6% N = 18 Insurance Companies Source: Biller Mobile Bill Pay Benchmark Study, Blueflame Consulting for Fiserv, Inc.,

44 44 Key Takeaways

45 Key Takeaways: Aligning Strategies with the Shifting Billing and Payment Landscape New technologies & services are driving changes in consumer behavior, and it is impacting their expectations for how their providers should support them now and in the future The challenge for bill and statement providers is that the breadth of consumer communications and bill payments preferences is substantial, and will be for some time Bill and statement providers are overly aggressive in their expectations for electronic adoption and for consumer traffic to their own self-service portals, while discounting the importance of the consolidation channel Recognize and internally evangelize the inherent importance of transaction documents and payments Develop a comprehensive, multi-channel mobile strategy that includes reminders and innovations like Snap to Pay Billing 45

46 Next Steps A follow up will be coming with: A complimentary InfoTrends research brief on Bill Presentment in the Insurance industry Webinar feedback survey Also Participate in the Third Annual Mobile Bill Pay Benchmark Survey Check out the just released Research Paper on Mobile Bill Pay and Presentment on Fiserv.com 46

47 47 Questions and Answers

48 Shifting Landscape for Billing and Payments: Are you Prepared? The latest research and insights on how the changing landscape will impact your business. Eric Leiserson, Senior Research Analyst, Fiserv March 5, 2014