Making a loan payment should be simple. But behind that transaction, financial institutions may be navigating multiple cores, credit card systems, payment rails, channels, and operational processes.
Borrowers don’t see those individual systems. They see one financial institution—and expect one consistent experience. So, how can financial institutions manage all that complexity without passing it along to the borrower? Along with our partner Alkami, we explored this question on a recent webinar, Modern Loan Payments: Better Borrower Experiences. Already Built for Alkami.
Here are three things to consider when modernizing the loan payment experience.
1. Don’t Let Fragmented Systems Create a Fragmented Experience
Multiple systems are a reality for most financial institutions. As Ward Howell, vice president of strategic partnerships at Alacriti, noted during the webinar, institutions may be working across “multiple cores,” “multiple credit card systems,” and “multiple payment rails.”
The borrower shouldn’t experience the friction that comes with that. Real-time integrations can connect systems and automate processes such as validation and posting that might otherwise require manual intervention or dual entry. Out-of-the-box integration with the loan payment solution and digital banking providers can also help create continuity between the experience borrowers already know and the payment technology working behind it.
2. Let Borrowers Choose How They Pay
Modernization doesn’t necessarily mean moving every borrower into the same one-size-fits-all digital channel. Some borrowers prefer digital banking. Others may respond to a text reminder, rely on recurring payments, use an automated phone system, or call the contact center.
“We know that members and customers transact in the modalities and the channels that are most comfortable for them, and that’s something we want to continue to support,” said Howell.
Rather than assuming how borrowers should pay, financial institutions should focus on making the channels borrowers actually use convenient and consistent.
3. Look at Borrower Experience and Operational Efficiency Together
A clunky payment experience doesn’t only affect the borrower. It often creates added manual work internally. A transaction that can’t be completed through self-service may become a contact center call. Disconnected systems can lead to manual entry. Exceptions can require hours of research and reconciliation.
Improvements to the payment experience can benefit both sides. During the webinar, Howell shared multiple examples of financial institutions that have seen measurable results from loan payment modernization. Among them:
- Addition Financial saved approximately $10,000 per month in labor costs by shifting more transactions to digital self-service.
- IHMVCU reduced exception handling from approximately six hours a week to 30 minutes.
- UMB Bank processed more than 72,000 transactions representing nearly $160 million in payment volume in one year.
The lesson isn’t simply to automate more. It’s to look for places where the same friction is making things harder for both borrowers and employees.
What to Do Next
As a first step to loan payment modernization, look for the friction borrowers actually experience. Where do they abandon self-service and call for help? Which transactions still require manual intervention? Where are disconnected systems creating an inconsistent experience? Those pain points can help identify where modernization will have the greatest impact—for the borrower and the institution.
Alacriti’s Orbipay Loan Payments is designed to help financial institutions modernize that experience with real-time core integrations, digital self-service, multiple payment channels, and automated payment processing.
To learn more about how financial institutions can modernize loan payments while improving operational efficiency and delivering a better borrower experience, watch the full webinar, Modern Loan Payments: Better Borrower Experiences. Already Built for Alkami.
