Aiden, a 24-year-old borrower, misses a payment on a small loan. He sees a few calls from an 800 number but swipes them away because he doesn’t recognize the number. Besides, he rarely answers calls.
A voicemail hits his phone but gets buried under a stack of other voice messages. A reminder letter is delivered a week later, sandwiched between flyers and junk mail. It never makes it to the top of the pile.
Before long, Aiden isn’t just slightly past due… his credit score is suddenly at risk.
For many Gen Z and younger millennials, this scenario is becoming common. The problem exposes a core collections issue: consumer lenders and servicers are still relying on channels younger borrowers don’t use, and often ignore, at times when clear, simple steps matter most.
The Gen Z Collections Problem in a Nutshell
Collections operations still built around phone calls, mailed letters, and web portals are at odds with Gen Z and younger millennial behavior: they live in their phones’ native messaging apps. Across consumer finance, critical updates like fraud alerts and one-time passcodes are already sent by text. When something important happens with their money, younger borrowers check their text inbox.
When outreach and borrower habits don’t line up, even solid collections strategies underperform. The result? More attempts and more accounts rolling into later stages of delinquency.
And when a borrower is already stressed about money, every extra step (every call, every login) becomes another reason to wait.
Why “Trusted Text” Matters
To meet these borrowers in their text inbox, you don’t need to chase new messaging formats. You can effectively use SMS and MMS where it actually helps.
If a borrower can see what they owe, ask a question, and take a step toward resolution without leaving their texting app, the experience feels manageable. They don’t have to remember a URL or dig up a letter. They can stay in a trusted space.
In collections, trust comes from using text messages correctly, which begins with clear consent and opt-in. Effective messaging platforms align with CTIA and wireless carrier expectations, so borrowers know they’ve agreed to receive account and payment-related texts before they suddenly appear.
From there, consistency matters. Standard templates expected HELP and STOP language, and honest frequency disclosures signal that messages are part of a defined program, not random one-offs. When MMS is used, it’s to add clarity (such as sharing a simple statement image or explainer), while keeping the conversation inside the same text thread.
Behind the scenes, quiet hours management, opt-out handling, and auditable records of opt-in and message history help collections and servicing teams rely on text as a primary channel while managing regulatory and carrier risk.
FinText™ Payment Services keep borrowers in their text inbox. For a collections or servicing team, the flow looks like this:
- A past-due reminder goes out as an SMS through a compliance-first platform like SBT’s, using clear, appropriate language and a specific next step.
- From that same text thread, the borrower can tap into a secure payment experience, see the amount due, and choose how to respond without having to search for anything, move to a different space, or remember a rarely used password.
Payment itself should feel easy. With support for Apple Pay, Google Pay, and other digital wallet options, borrowers can complete payments without typing long card numbers on a small screen. Stored and tokenized payment methods make repeat payments even simpler, which is especially helpful when a borrower is working through a plan over time.
Many tools that call themselves “pay-by-text” simply send a generic link and push borrowers to a separate portal. FinText treats the text channel as the center of the experience. The reminder, the options, and the payment itself all feel like part of the same conversation. It turns text messaging into a true payment channel.
A Gen Z Collections Journey, Resolved
Remember Aiden, our 24-year-old borrower? The collection team uses a text-first approach: When he accidentally overlooks a payment, he receives a clear, compliant text he’s already opted into. The message explains what’s past due and lets him know he can handle it right away—without leaving the text.
With one tap, he enters the FinText experience, sees what’s due today, and uses his digital wallet to make the payment. He gets a confirmation text in seconds.
A delinquent account is resolved quickly and a customer relationship is strengthened, all by speaking with the customer where he likes to engage.
Where Collections Leaders Go from Here
For collections and servicing leaders across consumer lending, the question is whether your main collections journeys reflect the way Gen Z and younger millennials already use their phones.
A FinText-enabled approach can reduce unanswered calls and unopened mail, turn more past-due reminders into self-service payments or realistic commitments, and ease the load on call centers while giving borrowers a simpler way to get back on track.
Of course, any text-based collections program should be designed with your own legal and compliance teams. SBT can provide the infrastructure, tools, and guidance that align with carrier and industry expectations, while you apply your policies and interpretations.
If your younger borrowers are ignoring calls while living in their text inbox, it may be time to make SMS, MMS, and FinText Payment Services the front door to your collections strategy.
