Financial services firms that send reminders to clients with overdue loans repayments are doing themselves a disservice, according to US credit scoring and predictive analytics firm,FICO. FICO surveyed 3600 retail banking and financial services customers in nine countries, including 400 customers in Australia.The top preference in Australia for a payment reminder was for SMS messages (39 per cent), with email following at 30 per cent. "Australian consumers have almost universally embraced smartphones and are therefore very used to receiving electronic communications. Not only are they comfortable receiving late payment reminders and other debt-related messages via SMS and email, they would prefer their banks communicated with them in this way rather than generating paper letters which can be seen as wasteful to the environment and costly," said Dan McConaghy, president for FICO Asia-Pacific. While the trends were broadly consistent across all countries, the various mixes vary. For instance, Brazilians seemed relaxed about being told via social media if they were falling behind in their repayments. This compares with other countries - Australia among them - where it's unacceptable to almost six in ten of those surveyed."When compared to the US, Australia does seem to be ahead in terms of digital transformation with some 25 per cent of Australian respondents saying their bank uses SMS to communicate with them, compared to just 15 percent in the US," McConaghy"But Australian and US banks are both pretty far from matching channels with customer preferences."The survey also found that:•    Australians said they would be much more likely to respond to a collection message that is delivered by a live person (26 per cent) than an automated message (14 per cent);•    twice as many people in Australia said they would be most likely to respond to a collection message that is friendly, helpful, and delivered through a trusted source (26 percent) than said they would respond because the lender reduced or restructured their debt (15 per cent);•    websites or online portals were the preferred method of making late payments (36 per cent), with email and mobile apps both significantly behind on 18 per cent; and•    six in ten respondents (58 per cent) said they would be "not at all comfortable" with payment reminders showing up in Facebook, Facebook Messenger, Instagram or other social media channels, with only eight percent "extremely comfortable" receiving reminders over social."What's most important in these findings is the trend towards digital convenience," said Ross McGown, who manages FICO's mobile communications business in Asia Pacific. "While there is no one best way to communicate with your customers - people have different preferences, and they expect lenders to remember that and treat them as individuals - there is an obvious move away from calls and letters to SMS, email and apps."A straw poll by Banking Day of several issuers (ie, loan originators, or lenders) at the Australian Securitisation Forum found a string preference for SMS contact, with communication by letter not used until the final stages, when legal letters get sent.