Key Features That Make Loan Repayment Technology Excel for Credit Unions

Brad Tompkins, CIO, Vergent LMS

In an era of rapidly advancing technological sophistication, leaders across nearly every industry find themselves in a position where staying current with the latest innovations is not just a priority but a necessity. This dynamic is particularly evident in financial services and financial technology, where customers demand only the most convenient and secure solutions for managing their money.

For decades, there has been an arms race to create the safest and most user-friendly tools for everything from payments to loan application automation. Developers have often focused on packing these solutions with features designed to attract customers, whether institutions or retail users. However, a new school of thought is emerging, advocating for a more focused approach. By dedicating attention to a handful of key features, developers can create superior solutions while simplifying the development process. When it comes to loan repayment technology, this concentrated effort should prioritize a few critical aspects that deliver the most value to financial institutions.

At the core of any payments technology development should be the end user. With a vast array of payment services available, simplicity and flexibility are paramount. Loan repayments must be as straightforward as possible for borrowers, not only for convenience but also to reduce the likelihood of missed payments. Institutions must also consider the variety of methods borrowers might use to make payments, including credit or debit cards, direct deposits, and other options. Providing flexible and accommodating payment methods increases the chances of on-time payments and enhances the overall user experience.

Despite careful planning, complications are inevitable. As Murphy’s Law states, “Anything that can go wrong will go wrong.” Both lenders and borrowers need reassurance that robust support systems are in place. Customer support has become a growing priority for credit unions seeking effective repayment technology. Transparency is essential for customer support to succeed, ensuring lenders, borrowers, and support staff all have access to the information they need. Support must also be readily accessible and highly responsive, addressing issues in real-time before they escalate into larger problems. By prioritizing transparent and effective customer support, institutions not only improve the borrower experience but also protect themselves and their clients.

Another critical feature for loan repayment technology is the ability for lenders to easily generate detailed, comprehensible reports. These reports are indispensable for compliance and strategic decision-making, helping lenders share accurate information with regulatory bodies and glean insights to foster growth. Payment platforms are uniquely positioned to provide such reports, but not all lenders have the same priorities or requirements. Developers should consider incorporating configurability into reporting features, allowing lenders to focus on the metrics most important to their operations. Here, too, transparency is key—lenders must have clear, unrestricted access to their data.

This focus on simplicity, flexibility, support and reporting does not imply that other aspects of a loan repayment solution are less important. Security, for example, remains critical as fraudsters continuously refine their methods. However, the emphasis here is on prioritizing a few core elements that many credit union lenders find indispensable. By concentrating on these areas, developers can move away from a maximalist approach, creating more effective and efficient solutions.

For credit union leaders evaluating loan repayment technology, the takeaway is clear: identify the features that matter most to your business and make decisions accordingly. By prioritizing what’s essential, institutions can ensure they adopt the solutions best suited to their needs.