Journal of Finance Vol. 80 No. 1 2025
Personal Communication in an Automated World: Evidence from Loan Repayments
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.
- DOI
- 10.1111/jofi.13388
- Volume
- 80
- Issue
- 1
- Pages
- 515-559
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex