Like any other industry, COVID-19 has created new, immediate needs for credit unions: Rapidly transitioning to remote work, serving members with reduced branch availability, reallocating branch staff to address increased call center traffic and supporting members in financial distress through deferments, emergency lending and more creative, tailored arrangements. Now it is the time for Credit Unions to re-focus on people – employees, members, and community – and to invest in business resiliency to improve member experience during Covid 19.
Implications of Covid-19 crisis for Credit Unions
As COVID-19 evolves and continues to impact our world, it is creating new challenges for business. Unfortunately, credit union members seem to be suffering more. According to a recent Gallup poll in Mid-March, while the national average is 70%, 75% of credit union members say they have experienced a great deal or a fair amount of disruption. Credit Unions are facing several challenges which include: Unsurprisingly, as members are staying home, many credit unions are seeing an overwhelming surge in call volumes, Branches being closed by government mandate, forcing a demand for other methods of service, Economic hardships for members resulting in the need find creative — and often non-standard — ways to ease economic hardships.
The implications of the COVID -19 crisis will be far-reaching, and credit unions must begin to prepare to confront upheavals and turbulence across the full footprint of their business, from the front line to the back office, up and down the organizational hierarchy, and across all channels, physical and digital. While adapting to the new normal, credit unions will also be challenged by continued uncertainty and a rapidly shifting environment. Many will need to adjust more effectively deliver the right products and services via the right service delivery channels.
Here are the key areas where Credit Unions need to focus to overcome the challenges at the same time there is opportunity: To showcase your organization’s commitment, shore up your trustworthiness, and build deep and enduring relationships with members.
Strategies for improving memeber experience during the Covid-19 crisis.
Focus on member financial well-being: Member financial well-being should be the primary value proposition for credit unions. CUs should do well to reposition themselves as trusted partners who can provide for the many elements that contribute to financial well-being. Start think beyond the transactional need of members, rather act as a helping hand in member personal financial management.
Promote Digital Service Delivery: Make it easy for new business and personal banking customers to bring their business to your institution. Fully automated, touch-free online account opening software and digital loan origination systems provide critical engagement channels to onboard customers and make loans. The trick is to scale up high-quality digital channels and support member adoption with the service excellence that sets credit unions apart.
Improving operational efficiency while developing new revenue streams: Remote work and the future of branches are two top-of-mind areas to begin re-thinking your operations. On the revenue side, members may not take well to new or re-introduced fees; instead, identify value-added products and services to offer in alignment with your financial well-being value proposition. Rethink your underwriting to take advantage of untapped markets and advance financial inclusion. Combined with lower fee income and an expected spike in credit losses and operating expenses, credit unions can find operational efficiencies and new revenue sources to grow and remain sustainable.
Focus business continuity planning on issues for survival: As essential service providers, credit unions have kept the vast majority of their over 200,000 employees working during the stay home orders. The norm was to allow appointment-only branch services while keeping drive-thrus open, encouraging mobile and home banking service usage, and operating remote call centers. To take the strain off higher-health risk ATM cash transactions, credit unions will want to promote cashless transactions such as remote deposit capture and real-time transfers. As an income source, banks and credit unions may also consider increasing ATM surcharge fees for non-credit union members.
Think forward!
Unlike Banks and other Lending entities where services are not very relationship-driven, Credit Unions are a better option. Credit Unions hold a captive audience of enrolled members. Credit Unions are real people serving other real people with a dedicated heart that will always win. Support your members and consider making financial well-being your primary value proposition. Invest in your digital and mobile service as a differentiator. Take a hard look and develop efficiencies in your organization, while innovating and building new revenue streams that fit your community and will further adapt your business model to our new economic and social conditions.
In short, the near future appears very uncertain, and that uncertainty extends into the medium and long terms. Credit unions have a mandate to help members achieve some measure of stability in these trying times, and the credit union system is uniquely positioned to do so. Insight Consultants are dedicated to serving Credit Union hearts to make them as BIG and as SMOOTH FLOWING as possible. We do this using our experience, proficiencies, and future-focused technology. Whether it is technological advisory or software development, we have you covered no matter where you are currently.
Contact Us to improve your customer experience during the covid 19 and make your future journey smooth flowing.
