This year has certainly been unlike any other. Covid-19 shocked the world back in March, putting credit unions’ agility, resiliency and dedication to member service to the test.Many of the plans and projects institutions had at the top of their to-do lists weretransitioned to the backburner, as credit unions hadto quickly make adjustments and shift priorities. They were challenged with providing their employees with the resources necessary to effectively work from home. Member service was especially important this year, as consumers and businesses alike faced great economic uncertainty in the form of furloughs, layoffs and business limitations or closures.
Credit unions, as they always have, showed up in a major way this year, despite the numerous roadblocks in front of them. The overwhelming majority rose to the occasion, figuring out how to provide regular service in addition to special offers and assistance to their members, whether that was through new loans or payment deferral programs. It was a tough year, but one where the ‘people helping people’ philosophy carried through.
As we look ahead, many of the shifts that occurred in 2020 are likely to linger. Credit union executives should take a careful look at all that happened this year in order to make predictions and set priorities for 2021 and beyond. Areas to watch include digital acceleration, the shifting role of the branch, a more in depthfocus on business continuity planning and identifying more creative ways to serve and assist members as theyattempt to regain not only their financial footing, but their financial control and confidence as well.
An uptick in digital
This year, digital became more important than ever before. With shelter-in-place mandates in cities across the country and consumers practicing social distancing, many branchlobbies were closed or restricted for at least a period of time. As a result, more members leverageddigital banking apps, some for the first time. In addition to being able to complete simple tasks like transferring money and depositing checks digitally,there was also a need to complete more complex aspects of the banking experience online. Previously manual and paper-based processes like new account opening and loan origination faced a new demand for digitization.
The need for and surge in digital will persist. Consumer preferences are shifting as digital has become the preferred channel for many, includingboth those who leverageddigital banking pre-pandemic and those who didn’t. To remain relevant and competitive, credit unions must prioritize delivering a digital banking experience that is personalized and seamless. Credit unions are known for their service and they must be able to provide an exceptional member experiencethat maintains that personal connection regardless of the channel. Those that can accomplish this will be well positioned for success next year and beyond.
The changing role of the branch
Even though many branch lobbies were shut down at the pandemic’s onset to protect both members and employees, credit unions prioritized finding a safe way to make them available again in some capacity. The branch will remain a critical channel; that will not change. However, what will shift is the branch’s role and how credit unions leverage this important touch point.
With the increased number of members relying on digital banking and many still minimizing public outings whenever possible, more credit unions are shifting to appointment-only models. Such an approach allows employees to still meet with their members face-to-face to discuss important aspects of their financial health (such as budgeting, investments, loan/mortgage closings and financial literacy), and it also providestime to clean between appointments and the assurance of less people in the branch at once. ITMs will also likely rise in usage and adoption in branch, as these machines enable members to complete tasks on their own when possible and engage with a live representative through video when needed.
To be successful, credit unions can’t have a ‘one-size fits all’ mentality for their branch strategy. Every credit union – and each branch within a credit union’s broader branch network –serves a unique member base, so credit unions must take these particular nuances, preferences and needs into account when formulating a branch strategy. This is where relying on a trusted technology or consulting partner could come in handy. Ultimately, digital and branch banking must complement one another to be effective.
Increasing focus on business continuity planning
Credit unions have had to stress-test their business continuity plans in a significant way this year. Institutions were challenged to quickly equip their employees with the resources necessary, such as headsets, laptops and remote access to different systems, to successfully work remotely. While some were in a strong position to deliver the necessary hardware and software, others struggled. Complicating matters, there has been an uptick in pandemic-related fraud, as hackers have preyed upon the vulnerabilities posed by working from home. Such attacks have demonstrated the importance of keeping hardware up-to-date with robust encryptions and security software and standards.
Now that institutions have experienced firsthand that anything can happen, a more serious emphasis will be placed on disaster recovery and business continuity planningmoving forward. The ability for credit unions’ technical teams to efficiently provide application support, steady software patching and new hardware to their staff if needed will be a priority in 2021.
Identifying niche ways to better serve members during times of need
During a year filled with financial uncertainly and stress, credit unions across the country supported their communities by introducing new offerings and programs to help members during their time of need. Through skip-a-pay programs, payday loan offerings and small business services like Paycheck Protection Program(PPP) lending, institutions found effective ways to help and provide a lift where they could. This will likely continue into next year and beyond as consumers and businesses look to regain their financial stability and confidence. Credit unions will continue to be flexible and open-minded to new and unique member service opportunities and initiatives.
Credit unions have certainly demonstrated their dedication to members over the past 12 months. Next year, the institutions that nimbly adapt to the changing credit union landscape, such as by implementing new technology, evolving their operations and creating strong business continuity plans, will be the ones best positioned for success. Whether the pandemiclingers or we’re enjoying a post-pandemic environment, members will always remember and find comfort in knowing that their institutions are ones that they can trust and lean on for support in both the good times and bad.
Matt Baaki, Chief Technology Officer, Member Driven Technologies (MDT). In his role as Chief Technology Officer at MDT, Matt Baaki provides leadership in the strategic areas of product selection and integration, product implementation, and support.
Matt’s 16-year career in the credit union industry consists of tenure at both a credit union and a CUSO and also includes responsibility for software services, professional services, client relations, and training.
Matt currently serves on several specialty advisory boards and committees, offering his expertise to the continuous evolution of financial products and services for both MDT clients and other credit unions.