Canadian Lender Case Study | Lending Case Study

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Products

Payments

eLinx

Digital PAD

Bank Verify

Rails

Interac e-Transfer for Business

Use Case

Consumer Lending Business

Integration Time

2 weeks

Intro

For over 15 years, this Canadian lender* has specialized in financing for customers with credit challenges, helping them purchase furniture easily. Founded in 2006, the company quickly became a favourite due to its fast turnaround times and flexible lending options. The company has doubled in size, assisting thousands of consumers with their financing needs.

However, with the sharp increase in new kinds of lenders in the market and a need to stay ahead of the curve, the company began exploring new avenues to maintain its competitive edge, deliver the customer service it was known for, and cut down on costs.

To address these challenges, they turned to VoPay’s Fintech-as-a-Service platform. This case study details how VoPay’s platform transformed the lender’s operations and increased productivity by 25%.

The Problem: The True Cost of Manual Processes

The alternative lending space in Canada is growing rapidly, with the market expected to surge from US$1.48 billion in 2022 to US$4.20 billion by 2027. Online lenders have become a popular and efficient method for Canadians to secure quick funding. However, the industry is highly competitive, with nearly half of borrowers researching multiple lenders before applying. Differentiation in service and efficiency is crucial.

This organization faced significant challenges due to outdated manual payment processes, which resulted in high operational costs and wasted valuable employee time. Manual payment data entry, NSF reconciliation, and correcting clerical errors consumed a substantial 25% of their workforce hours.

Lenders cannot afford the thousands of dollars lost annually due to labour inefficiencies and human errors, which substantially reduce their profitability.

“Before automation, the process was archaic. We would send a list, and someone would manually enter every payment into the system. Our supervisors would spend between one and a half to four hours completing NSF reconciliations every Monday morning. It’s hard to believe this is still common practice in the industry.”

- Company CEO

6 Key Issues Faced By The Organization

1. High Operational Costs and Inefficiencies: Manual payment processes increased labour costs and ineffective resource use. The organization needed a solution to address and minimize these operational costs.

2. Human Errors: The current system increased the likelihood of errors due to manual data entry, leading to further inefficiencies and additional correction costs.

3. Lost Productivity: Employees were spending a large amount of time on low-value tasks instead of focusing on strategic, high-impact activities.

4. Need for Real-Time Payments: Delays in fund disbursement affected customer satisfaction. Real-time payouts were essential to ensure immediate and secure disbursement of funds.

5. Integration Challenges: The organization needed a developer-friendly API for easy integration with existing systems, enabling seamless operations and efficient automation.

6. Automated Fund Disbursement and Bulk Collections: To further streamline operations, the lender needed automation in collections and fund disbursements to ensure error-free transactions and improve overall efficiency.

The Solution: Whoever Funds Fastest Wins

The lender’s primary objective was to simplify the customer journey by minimizing client information requirements, reducing manual input, and eliminating unnecessary human involvement post-approval.

During initial discussions with VoPay CEO Hamed Arbabi, the lender quickly recognized the alignment between their needs and VoPay’s capabilities. The simplicity and effectiveness of VoPay’s payment platform were immediately evident.

“What I loved was that even before discussing with Hamed Arbabi, I quickly identified what they did, how it would work for us, and its simplicity in API integration. It fit the bill and checked all our boxes.”

- Company CEO

The organization integrated VoPay’s advanced payment technology solutions into its operation.

• Interac e-Transfer^® for Business: Enabled the lender to provide secure, real-time payments using just an email address, available 24/7/365. This facilitated immediate fund disbursements, significantly improving customer satisfaction. The lender gained a competitive advantage as much of the industry had not yet adopted or automated Interac e-Transfer payments. By offering this trusted and secure payment method recognized in the Canadian market, they were able to further differentiate themselves.

• VoPay Instant: Designed for the lending industry, this advanced electronic funds transfer solution allowed the lender to push and disburse funds instantly to customers' accounts, with 24/7 visibility over payment flows. With real-time transaction updates, the lender could automate reconciliations and access detailed reporting, boosting operational efficiency and customer satisfaction.

• VoPay’s Proprietary iQ11^™ Technology: Utilizing Open Banking technology, this intelligent EFT solution added a layer of data intelligence to the lender’s EFT payments by verifying account ownership, available balance, account information, and performance history during the first transaction. This technology not only enabled faster transactions but also drastically reduced NSFs. By integrating a custom embed URL on their platform, users could select their financial institution, login, and choose their account, resulting in a unique iQ11 token for secure and streamlined future transactions.

• VoPay’s Proprietary eLinx^™ Payment Technology: The lender utilized this solution to send unique links to customers for secure bank detail capture, minimizing input errors and bolstering transaction security and traceability. By automating processes with real-time notifications, eLinx^™ improved overall operational efficiency, allowing the lender to streamline payment workflows and offer a more reliable service.

The Results: Quantifying the Qualitative

VoPay’s expertise in payment technology completely overhauled the lender’s collection and disbursement processes, simplifying operations, reducing manual work 25%. By integrating VoPay’s solutions, the lender saved time and costs, achieving a 30% reduction in labour costs, and scaled operations efficiently. This automation set the stage for sustainable growth and provided a competitive edge in the market.

Outcomes Achieved

• Unified System: Implemented a cohesive system that eliminated the need for multiple financial platforms, simplifying the financial infrastructure and streamlining operations.

• 25% Elimination of Manual Tasks: Automated payment processes enabled quick, efficient payment sending and receiving with complete transaction visibility. This significantly reduced the time and labour required for data entry and reconciliation. Labour-intensive tasks such as manual data entry and chasing NSF payments were eliminated, freeing up valuable employee time and reducing operational costs. The lender was able to eliminate 25% of their manual tasks, further enhancing productivity and operational efficiency.

• Enhanced Client Experience: Streamlined processes ensured a seamless customer journey, significantly boosting client satisfaction and encouraging repeat business by making interactions easy and efficient.

• 30% Reduction in Time and Workforce Costs: Automation enabled staff to focus on strategic activities that drive business growth rather than repetitive tasks. By reducing manual reconciliation hours from 10 to zero per week and cutting NSF processing time from 20 hours per month to nearly none at $30 an hour, the lender achieved a 30% reduction in labour costs. This shift improved employee morale and contributed to more impactful work outcomes.

• Future-Proofing Operations: By adopting innovative payment solutions, the lender stayed ahead of industry trends, ensuring long-term success in the evolving fintech landscape.

Operational Savings

• Reduced manual reconciliation hours from 10 to zero per week.

• Cut NSF processing time from 20 hours per month to nearly none.

“To be quite frank, the cost-saving has been huge. Whether it’s money, time, or staff, the reduction in the time it takes to address issues arising from payment processing has been remarkable.”

- Company CEO

* This case study is based on a real lending organization. However, to respect the privacy of our clientele, the organization has been kept anonymous.