Monday , July 15, 2024

Five Ways AI Will Improve Bill Payments

Artificial intelligence, once the stuff of science fiction, is coming fast to the business of bill payments. Here’s why—and how. 

I recently turned on my smart speaker and enjoyed a music playlist curated just for my tastes and listening habits. When I scrolled through social media, I received customized shopping suggestions based on recent searches, and a store where I shop sent me a direct message offering some coupons for items and brands I frequently purchase.

Welcome to the world of artificial intelligence.

Consumers are getting accustomed to this type of personalized treatment—except that it is largely absent in one of their most frequent activities: paying bills. Why shouldn’t bill payments rise to the same level of personalization and helpfulness as these other activities?

Short answer: It’s coming. Forward-thinking billers will have the opportunity to work with their payment providers to elevate their services through AI and machine learning (ML). They recognize that when the payment experience is better tailored and streamlined to remove friction, customers are more likely to pay independently and on time, while feeling more positive about the company behind the bill.

Here are five ways AI and ML are already transforming the bill-payment process:

  1. Personalized payment experiences

Imagine opening your bill-payment site to see a customized interface, adapted to your payment behaviors and preferences. AI and ML can use previous data to learn each customer’s preferences, including common payment types and channels, and then deliver those options with appropriate engagement communication during each interaction.

For instance, the customer could see a payment screen that includes a list of their most successfully used payment types, prioritized by recent use. They might see a pop-up message suggesting a repayment plan if they were late on their last payment. The can just click to accept and make the payment.

These convenient offerings reduce the time and effort needed to pay bills. They also make the customer feel “seen” and known, which builds loyalty.

  1. Fraud protection

AI can analyze enormous sets of payments data and flag unusual events and possible threats. This is true not just in the biller’s database but across the payment provider’s entire data lake.

If an issue is detected, AI tools can alert the payments platform so the provider can tighten security and initiate protective authentication measures across all of its clients. This protects customers from having to deal with fraudulent payments or, even worse, identity theft. This can be a huge customer-satisfaction win.

  1. Self-service support

A surprising number of people—10% in a recent bill-payment survey—regularly call customer service to pay their bills. Others call to have simple questions answered. For some of these customers, these are just longstanding habits they don’t want to change, while others may be intimidated by self-pay or have run into self-service problems in the past.

Generative AI can help by being a human-like assistant to walk them through making a payment or to answer their questions. The AI agent sends a message to customers waiting in the queue, asking how it can help them. If they want help paying their bill, the virtual agent sends a personalized payment link and even walks them through the process. If the customer has a question about payment or is encountering a problem— say, with a payment type that isn’t working—it can offer step-by-step instructions to resolve the issue or send them a helpful link.

Customers who have completed self-pay once are more likely to do so in the future, reducing their dependence on live agents and saving the biller money.

  1. Proactive outreach

AI-generated support doesn’t only react to customer needs. It also can help companies anticipate common customer issues and reach out proactively. It could be as simple as a heads-up about an upcoming payment or a personalized tip based on customers’ usage and patterns. Maybe a customer is a great candidate for autopay or would be better off using a different payment method for the type and state of their loan.

Payments-platform providers can also merge internal and external data to identify trends and predict potential problems with payments and enable billers to proactively reach out and offer help to ensure timely payment.

For instance, AI can be trained to identify at-risk borrowers based on a change in their payment behavior, or even a change in regional factors like a natural disaster or a major labor strike. Billers can then engage with impacted customers and suggest alternative payment schedules that may keep them from defaulting.

The beauty of machine learning is that it’s always learning. That means the more data it ingests, the smarter these types of recommendations become.

  1. Protection for customers’ financial health

When businesses gain AI-powered insights into their customers’ payment behaviors, they can better determine how to help those customers avoid defaults, fees, and credit hits.

AI models can track patterns of payment behavior over time to identify the best times and channels for engaging often-delinquent customers before their bill is due. The technology also can help organizations determine payment options that best suit at-risk consumers.

A delinquency-prediction dashboard powered by AI can keep the organization informed and prepared to take preemptive action.

AI Behind the Scenes

This is just the tip of the iceberg in terms of AI’s eventual impact on bill payment. Many more advances will occur behind the scenes, supporting and protecting customers even if they never see it.

To realize these gains, billers should work closely with a payments provider that is focused on AI/ML expansion and has a skilled data-science team in place. AI can be an advantage when it draws from a substantial pool of data, and its algorithms are properly designed and tested to prevent bias.

Consumers are ready for AI and all the personalization and convenience it will bring to bill payment. Now it’s up to billers to make it happen—not just to make bill payment easier for customers, but to tap into the endless insights and opportunities AI will provide their business.

It’s an exciting new world, and we’re just getting started.

—Steve Kramer is vice president, product at PayNearMe.

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