Enhancing loan payments through digital banking: The power of integration
Providing seamless and efficient loan payment options is crucial for credit unions looking to improve member satisfaction and streamline internal operations. Recently, a webinar titled Streamlining Loan Payments for Operational Efficiency and Cost Savings brought together experts Stuart Bain, Senior Vice President at Alacriti, and Jeff Bucher, Senior Product Manager at Alkami, to discuss the benefits of integrating loan payments into digital banking platforms.
The Complexity of Loan Payments
Loan payments are a critical aspect of financial services, with both direct and indirect loans presenting unique challenges. Bain explained that direct loans involve members who have a full relationship with the financial institution, such as holding a mortgage, auto loan, or credit card. These individuals often use online banking for all their financial needs, including loan payments.
Indirect loans, on the other hand, may be the only product a member has with the institution, often obtained through third parties like car dealerships. These members may not feel the need to enroll in full online banking, making it essential to offer flexible, self-service loan payment options.
The key to success lies in offering a broad range of payment methods, such as online, phone, or in-person payments, while ensuring the process is as self-service and frictionless as possible. Bain emphasized the need for simplicity: “The goal is to make loan payments self-service and frictionless to reduce costs associated with manual payment processing.”
Loan Payment Strategy
A comprehensive loan payment strategy offers multiple benefits to financial institutions, including cost savings, operational efficiency, and increased member satisfaction.
Operational Efficiency and Cost Savings
Modernizing loan payment processes can lead to substantial cost reductions. By automating payments and offering self-service options, financial institutions reduce the need for manual processing and member service involvement. Automated phone payments through Interactive Voice Response (IVR) systems free up member service representatives to focus on more complex tasks, further optimizing operations. This approach not only saves time but also cuts costs, as financial institutions can reduce overhead related to call handling and other support functions.
Increased Member Satisfaction
Providing a variety of payment options that cater to different member preferences can boost adoption and satisfaction, while also reducing the need for support. Bain explained that offering multiple options—such as online, automated, or pay-by-text—makes it easier for members to manage their loan payments, resulting in fewer missed payments and higher member engagement.
Expanding Payment Options
As financial institutions compete to offer the best possible member experience, providing diverse payment options becomes increasingly important. The webinar covered the various options on the market today.
- Guest Web and Hosted IVR
Traditional payment channels like Guest Web and Hosted IVR are key. These options are particularly valuable for members with indirect loans, who may not want to enroll in online banking but still need an easy way to make payments. Guest Web and IVR provide secure, convenient payment methods without requiring additional login credentials.
- Progressive Web App for Mobile Payments
Mobile payments are a standard expectation among members. A Progressive Web App (PWA) offers an app-like experience without the need for a download. This mobile-friendly option ensures that users can make payments on the go.
- Pay by Text: Simplifying the Process
Pay by Text allows members to make payments with a simple text message. This option provides a halfway point between one-time and recurring payments, offering flexibility for members who prefer not to set up automatic payments but still want an efficient way to manage their loans.
Integration With Digital Banking
The fusion between Alacriti and Alkami allows financial institutions to offer seamless loan payment options within their existing digital banking platforms. Bucher shows how through Alkami’s transfer widget, users can make loan payments directly from their digital banking interface, ensuring a smooth and cohesive experience. The real-time integration allows payments to be processed instantly, reducing the need for manual intervention and increasing accuracy. By partnering with companies like Alacriti and Alkami, financial institutions can stay ahead in the digital transformation of banking services.
To learn more about how integrating loan payments into digital banking can drive efficiency and cost savings, watch the full webinar Streamlining Loan Payments for Operational Efficiency and Cost Saving featuring experts from Alkami and Alacriti.
