The ongoing COVID-19 crisis is placing enormous pressure on credit union operations. Members are facing historic job losses and economic hardship, just as the low interest rate environment is stressing credit union loan portfolios, revenues and efficiency. Meanwhile, stay-at-home orders and widespread fears of infection are transforming both consumer behavior and how we work, forcing organizations to embrace a new vision of service delivery, operational flexibility and innovation.
As they responded to the COVID-19 crisis, credit unions initially, and rightfully focused on emergency relief and crisis management. However, as we enter the next phase of this crisis, our partners at Filene Research Institute argue that now is the time for credit unions to refocus on people, processes and product. In their latest 3-part Special Report “Credit Unions and the Coronavirus: Notes on the Impacts and Implications of the COVID-19 Crisis” (co-sponsored by CO-OP), Filene states that now is the time: “to invest in business continuity and business resiliency so as to further your mission and support your community[i].”
Learn more about the findings from Filene’s research project during a webinar this Thursday, July 9th at 11:00 a.m. CT / 1:00 p.m. ET, featuring a panel discussion between CO-OP’s David Demsko (SVP, Corporate Strategy and Business Performance Management) and Summit Credit Union’s Rebecca Gerothanas (Chief Operations Officer).
According to Filene’s research, credit unions should begin their transformation journey in the following areas:
Reposition financial well-being at the heart of the relationship
Trust will continue to be the cornerstone of the primary financial relationship (PFR) and is needed now more than ever.
To maintain trust, ensure your members’ financial well-being is positioned at the heart of the credit union value proposition by attending to your members’ key life stage transitions. Examples include key life moments like leaving for college, getting your first job, purchasing a home, starting a small business, and retirement. They also include hurdles such as losing a job, facing a medical emergency, and the loss of a loved one.
Although people of all backgrounds, generations and socioeconomic status go through similar life stages, it’s important to also recognize and attend to your members’ varied financial lifestyles. The member in front of you may express different behaviors and needs based on factors such as whether they are digital-first, a gig worker, pursuing a nomadic career path, or living in a rural or urban environment.
For instance, before the crisis three in ten workers relied at least in part on gig work for income[i]. According to one recent survey of freelance workers, since the crisis nearly 70% of respondents reported they now have no income[ii].
With your members facing such daunting financial straits, your credit union serves as a crucial lifeline. Find ways to help them maintain financial access and preserve their credit through fee waivers, skip-a-pay programs and other means.
The current moment also presents an opportunity for building a new understanding of financial inclusion by focusing on equity and diversity. This means going beyond the traditional approach of promoting simple access, to understanding and emphasizing the underlying causes and social determinants of well-being, and disparities stemming from inequitable distribution of need, risk and resources across various groups[iii].
Adjust operations to serve your members where they are today
To address these massive shifts in member needs and consumer behavior, credit unions must begin to reimagine their service delivery and operations. Financial institutions have slowly pivoted toward digital banking for years—there is now little excuse for not completing this transformation.
In the wake of COVID-19, solutions like digital deposit-taking, payments and onboarding are table stakes. The next opportunities for advancement include deploying chatbots and digital assistants, identity solutions with enhanced security protocols, and sophisticated AI-driven data analytics.
Self-service through remote delivery channels has also proven its viability during the pandemic. The nature and purpose of the branch itself is rapidly being called into question, as the vast majority of financial transactions can be done via online and mobile channels, while mature technologies like interactive video tellers can still provide face-to-face interactions with greater efficiency and without the health risks of in-person branch activity.
Support your employees with empathy and flexibility
Lastly, it’s important to recognize your own employees are also experiencing life-altering transitions due to the crisis. Numerous credit unions are offering enhanced support to their employees during these challenging times, such as continuation of full pay during branch closures, expanded sick pay benefits, and flexible working opportunities for those who must continue working from home for health or family reasons.
If credit unions can rise to this moment by focusing on their members’ and employees’ needs, health and financial well-being, while re-imagining their operations to improve efficiency and profitability, that may ultimately be the most lasting and positive outcome of the current crisis.
To learn more about how to transform your credit union’s operations for a very different future, download Part 1 and Part 2 of Filene’s special report and join us on July 9th for our webinar with Filene and Summit Credit union!
[i] “Credit Unions and the Coronavirus: Notes on the Impacts and Implications of the COVID-19 Crisis,” Report No. 506, Filene Research Institute, June 17, 2020.
The original article Transforming Credit Union Operations for an Uncertain Future can be found on Insight Vault.