5 Text Messaging Best Practices for Consumer Lending

In an increasingly digital world, effective communication is vital for lenders to engage with borrowers, provide timely updates, streamline their operations, and capture payments. Digital lending is expected to grow at a compound annual growth rate of 26.5% between 2023 and 2030. As more and more businesses turn to text messaging as a communication tool and payment channel, lenders can leverage its benefits to enhance customer experience, optimize their processes and create new revenue streams. However, implementing text messaging requires careful planning and adherence to best practices to ensure compliance and ongoing success. This blog explores five best practices that lender should follow when integrating text messaging into their communication strategy. 

1. Obtain Consent & Comply with Regulations

When utilizing text messaging in the lending industry, it is crucial to obtain consent from customers before initiating any text communication. Ensure that you have clear and explicit opt-in processes in place, where customers provide content to receive text messages. Additionally, stay compliant with applicable regulations such as the Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (Regulation F). Familiarize yourself with legal requirements governing text messaging and ensure that your processes align with these regulations to avoid potential legal issues. 

In the highly-regulated financial and communications industries, SBT ensures you are staying compliant with our message template library. What you say in outbound text messages, when you send outbound text messages, and how you respond to conversational or inbound messages are all subject to government, industry, and carrier regulations. We work with you to create compliant templates specifically for account management and transactional messaging. Compliant message templates not only prevent agents from sending freeform messages that would put you at risk for penalties but enable you to get started with your text messaging strategy quickly. 

Additionally, our Deactivation Logic™ protects you from any potential regulatory and legal violations by providing you with a layer of protection to ensure that a message is NOT sent to a recycled mobile number. This protection fully complements our dedication to compliance and the ever-changing landscape of the mobile industry. 

2. Determine Right Party Contact (RPC)

All debt collection processes begin with locating and connecting with the correct person. It’s vital for accomplishing your goals and staying compliant. A higher RPC rate indicates a higher success rate. The high open (98%) and response (45%) rates of SMS makes it a reliable channel for reaching customers. 

Keeping contact data clean and monitoring phone numbers is required regardless of whether communication is a phone call or text message. TCPA oversight requires carriers to report changes in mobile device ownership daily. SBT’s Deactivation Logic helps validate a numbers history and potential ownership so that you are reaching the right person with the proper communication and not sending messages to numbers that are deactivated and given to a new user. If a mobile number has changed carriers, no action is required, and consent is intact. If a mobile number is deactivated, SBT manages the deactivation logic protocol and provides a daily report to the client. 

Collection companies can count on the reliability of text messaging to drive their RPC up. For example, SAFCO (Southern Auto Finance Company, LLC) wanted to improve its Right Party Contact rate to engage customers in a two-way conversation that would enhance its collections strategy. By implementing SBT’s compliant-focused SMS subscription, two-way text capabilities, dedicated short code, and SmartURL, SAFCO was able to triple its right party contact rate resulting in a 70% kept rate via text channel. 


"We chose Solutions by Text for their compliance expertise with the opt-in process. They have helped us achieve a 70% kept rate- that's 10% higher than our combined rate- across all contact channels. SBT is a leader in innovative methods of communication for collectors."

3. Increase ROI with Text Payments

In today’s digital era, lenders are consistently seeking ways to optimize their operations and increase return on investment (ROI). One effective strategy is to leverage text messaging as a powerful tool to enhance payment processes and improve borrower engagement. Text messaging offers lenders a direct and convenient channel to communicate with borrowers, deliver payment reminders, and streamline the payment collection process. Other pay-by-text vendors rely on outsourcing either the text messaging platform or the payment platform – resulting in a fragmented user experience. Users have to find their login details, account details and possibly even the amount due. With limited compliance support or guidance – putting you at risk for compliance infractions.

Enter: SBT’s FinText™Our FinText Payment platform is a one-stop shop offering a closed-loop frictionless payment experience for consumers resulting in higher ROI. FinText offers the first text messaging platform with a native payment portal – keeping you compliant and secure. This process is streamlined even further by our Smart URL™, which are shortened, trackable, secure links through which consumers can enter their payment details. 

FinText Payments

4. Personalize and Automate Messages

One of the key advantages of text messaging is its ability to deliver personalized communication. Lenders can leverage borrower data to send targeted and relevant messages that resonate with each individual. Segment your borrower base based on various factors such as loan type, stage in the lending process, or specific needs. By tailoring messages to each segment, lenders can provide a more personalized experience and increase engagement. Address borrowers by their names, and consider including information specific to their loan, such as payment reminders, upcoming due dates, or loan status updates. Personalization enhances the borrower’s perception of being valued and increases the effectiveness of your messaging.

5. Maximize the Customer Experience with Direct Communication

As consumer lending continues to shift from paper to digital, your loan servicing must stay ahead of the curve by adapting to consumer needs and preferences. To keep up with consumer demand, financial institutions are integrating SMS communication to enable account management for their customers.

SBT puts customer communication at the forefront of your marketing efforts. Our live, on demand, agent driven two-way texting removes communication barriers by opening a direct line of engagement between lenders and consumers. In addition, service teams are empowered to provide competent, convenient, and personalized support that nurtures the customer relationship for long-term success. Whether you’re answering billing questions, offering loyalty discounts, or promoting products and services, with SBT, your customer communication happens in real time.


Are you Optimizing the Value of Text Messaging? 

Implementing text messaging into your lending business can significantly improve customer communication, streamline operations, enhance overall efficiency and add new payment channels. However, it is vital to adhere to best practices to ensure a successful integration. Obtain consent, comply with regulations, determine right party contact, increase ROI with payments, personalize and automate messages, and ensure a direct line of communication to maximize the customer experience are all important factors to consider when implementing text messaging in your lending business. By following these best practice tips, you can leverage the power of text messaging to strengthen customer relationships, increase satisfaction, and drive ROI. 

Today’s consumer is digital-first. They don’t respond to voice calls and emails—but they do respond to text. SBT delivers the benefits of an integrated, modernized platform with built-in compliance. Contact us today to discover how SBT can help you streamline operations and deliver customer satisfaction and success. 

Customer Highlight: How SAFCO Partnered with SBT to Achieve a 70% Kept Rate

Share this article:

Want to learn more? Contact us today!