The global pandemic has touched virtually every aspect of consumers’ lives, prompting them to evaluate which service relationships truly provide value—and which don’t—in their transition to the “new normal.”
Credit unions that deliver an experience that meets the changing needs of members in the age of social distancing will be rewarded with new business and greater loyalty. Those that don’t will struggle to remain competitive.
Shift to Digital—Now
Social distancing has caused many consumers to trade branch visits for digital interactions. Indeed, the digital channel is useful and efficient, but only if it is user-friendly and meets member needs. Members who have a disappointing digital experience may not have the option to visit a branch to get assistance, leaving them feeling frustrated and stuck—and that’s bad news.
There’s certainly room for improvement, as only 52% of consumers report their institution was “very effective” in meeting their online or mobile banking needs. Mid-size institutions particularly have more room to grow, with significantly lower satisfaction rates than larger institutions.
Members who have a poor digital experience during a crisis are likely to sour on that brand—and be more receptive to offers from competitors.
Conversely, credit unions that invest in optimizing and expanding digital options to deliver the best experience will be positioned to attract and retain members. In fact, with interest rates at record lows, digital experience, not cost, will become a major differentiator for loan acquisition. That means your digital experience is smooth, seamless, efficient and, of course, useful.
A slick digital interface is of no use if it doesn’t provide the functionality members are looking for. Providers should evaluate their digital channels and consider making the following modifications:
- Adjust remote deposit dollar limits to make it easier to deposit checks remotely
- Offer convenient loan fund disbursement options
- Use e-signatures and touchless loans to facilitate remote document completion
- Offer a digital chat feature to quickly resolve previously tedious issues like duplicate charges
Actionable Strategies for Serving Members Now
Of course, there’s a fine line between being seen as helpful and being viewed as opportunistic, so it’s vital credit unions show they have their members’ best interest in mind.
Some 34% of Americans only have enough savings to cover three months of expenses, according to this report. As the economy begins to reopen, consumers may need help bridging paychecks or managing bills. Be sure to market a variety of tools, such as skip-a-payment and missed payment forgiveness programs, to ease members’ near-term financial needs.
Offer special, unsecured personal loans at a low rate. These flexible loans are attractive to borrowers to help cover expenses that arise from an unexpected change in their financial situations.
Consider reaching out to your most vulnerable borrowers. Have a conversation with them about how they have been affected and their financial challenges. Let them know you’re available to help navigate changes in their financial situation and determine their eligibility for alternative repayment or other loan relief options that might work better for them. Auto refinancing is a potential tool for this, as the rate differential is minimal. This means consumers can lower monthly payments by lengthening the loan term without experiencing a significant increase in the overall amount paid.
Prepare for the New Future
As credit unions focus on improving digital experience and serving member needs in the realities presented by the pandemic, it’s also important they position themselves for growth during changing economic conditions. This means asking questions like:
- Are there particular member profiles we should acquire that will help us weather similar crises in the future?
- Are we prepared for business in the “new normal?” What will our members need? What can we offer them and how can we grow the relationship as they reorganize their finances?
- How can we grow new deposits and help members achieve savings goals and help them be better prepared for a future crisis?
The global pandemic will not only change how people view personal finances, but also how financial service providers respond to consumers’ urgent needs. The digital experience you provide and support today will determine how you retain members, deepen relationships and acquire new members in the future.
This post was written by Stephenie Williams for Credit Union Executives Society (CUES), a World Council associate member. She is executive director/acquisition solutions at CUES Supplier member Harland Clarke.