Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303038 
Year of Publication: 
2024
Series/Report no.: 
SAFE Working Paper No. 428
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
We examine the effect of personal, two-way communication on the payment behavior of delinquent borrowers. Borrowers who speak with a randomly assigned bank agent are significantly more likely to successfully resolve the delinquency relative to borrowers who do not speak with a bank agent. Call characteristics related to the human touch of the call, such as the likeability of the agent's voice, significantly affect payment behavior. Borrowers who speak with a bank agent are also significantly less likely to become delinquent again. Our findings highlight the value of a human element in interactions between financial institutions and their customers.
Subjects: 
Personal Communication
Consumer Finance
Loan Repayment
Promise Keeping
Social Distance
JEL: 
D14
G11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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