Over the past several months, COVID-19 has dramatically impacted consumers, businesses and communities across the country. Major cities enacted shelter-in-place orders, restaurants and retailers shut down or majorly altered their operating models and staying six feet apart from others quickly became the new normal. Because of these health concerns and various social distancing suggestions or mandates (depending on location), branch activity has been significantly affected. Even though most credit unions have opened back up (even if in a limited capacity or with new requirements), hesitations linger. As a result, members who have traditionally preferred the branch have been propelled toward digital more quickly and completely than anticipated.
Social distancing has not only impacted member channel preferences, but employee working conditions as well. Staff that used to report to an office or branch have been forced to go remote, introducing a slew of issues and roadblocks that institutions were generally not prepared for. There have been challenges around obtaining enough laptops, connecting to secure networks and managing bandwidth limitations. Call centers have been inundated, leading to inordinately long wait times. While most credit unions had a business continuity plan in place, those plans typically didn’t account for the consequences of physical separation.
Though there was hope that the pandemic would be on the downturn by now, COVID-19 cases are once again spiking in certain parts of the country, and the profound behavioral shifts experienced and internal issues highlighted during the crisis are likely to have even longer lasting repercussions. Lessons learned from the crisis are prompting credit unions to reevaluate the channels through which they support their members and strengthen and expand their overall business continuity plans.
Doubling down on digital
While digital has been rising in popularity and prevalence over the past several years, the pandemic has hastened the shift to digital services. Even as social distancing mandates continue to be lessened, members are likely going to remain cautious of crowded spaces and shared surfaces, like branches, for the foreseeable future, solidifying digital as the preferred touchpoint for a wider range of members. In response, a seamless, intuitive digital banking experience must be delivered, one that replicates as closely as possible the personal service and effectiveness of in-branch interactions. Because members of all ages and backgrounds will be leveraging digital for certain functions (like remote deposit capture and new account opening) for the first time, these financial tools and solutions should be user friendly and simple to navigate.
A superior digital experience isn’t just about the interface and ease of use, but also about relevance. Uber can populate a frequently visited location, Netflix can intelligently suggest a new movie and Amazon can accurately recommend products, and members expect their credit unions to provide this type of personalized experience as well. Despite the wealth of data available to institutions, many have yet to figure out how to make the information actionable. Data must be mined and effectively analyzed for personalization to occur. A good first step is to organize data in a single, centralized location to make it more digestible. This makes it easier to gain a holistic view of members and start to anticipate their needs.
For example, consider the ability to see that a member has recently missed a few loan payments. This may prompt the credit union to proactively share information about refinancing programs or skip-a-pay solutions. Sharing budgeting advice and alternative payment options with a member that appears to be struggling is a great way to provide personalized service. While extracting and analyzing data takes some work at the onset, such efforts typically enable deeper and more meaningful relationships with members.
With unemployment rising and small businesses in trouble, it’s more critical than ever for credit unions to be there for their members with comprehensive digital tools, relevant financial advice and personalized, timely offerings. Those willing to shift their channel strategy and approach to data and personalization will be better positioned to serve their members and communities during this trying time.
Pandemic preparedness – was your credit union ready?
Just as the pandemic has prompted credit unions to take a closer look at the ways they serve members, it’s also caused them to reflect on their internal preparation. Were they ready to have staff working remotely? Were they prepared to have branch closures or restrictions for a significant period? Could they effectively handle the influx of PPP loans and call center requests? Many have found themselves less equipped than they would have liked in the face of COVID-19, which is understandable; nobody saw this coming.
As a result, those not fully satisfied with their readiness will likely take steps to ensure that if another pandemic emerges, they are better primed to handle all that such a crisis entails. Even if this isn’t undertaken voluntarily, it’s expected that regulators will require more comprehensive pandemic preparedness plans in the future. To most effectively create such a plan (which should be an extension of a larger business continuity plan), credit unions should execute thorough tabletop exercises, fleshing out scenarios that arose during COVID-19, as well as brainstorming situations that could potentially materialize in the future. The implications of physical isolation, call center volumes, network limitations and any other recent issues should be discussed in detail, with agreement on how to handle the matter next time. These efforts are more successful when team members across the institutions are involved, including HR, legal, lending, the C-suite and beyond.
Technology partners should also be assessed on their pandemic preparedness, especially those responsible for managing institutions’ critical IT infrastructure. In times of crisis, members rely on their credit unions more than ever, so operations must remain smooth and consistent. For example, can partners maneuver the shift to remote work with no negative service or end user implications? Are they able to persevere even with a travel ban? Can they ensure that data remains secure, even if no one can physically visit data centers? If one data center experiences an interruption, is there a backup? Savvy credit unions pose these questions during due diligence and beyond, prioritizing partners that can take care of both people and technology during a disaster.
COVID-19 has demonstrated the importance of credit unions consistently evaluating how behavioral changes, macro events or interruptions of any kind could potentially threaten their existing business, operational and member service models. Even though the pandemic will pass, the aversion to crowds and health concerns will likely linger. Credit unions have an opportunity to help members navigate this new normal by providing seamless, personalized digital tools and guidance. And, those credit unions that use this as a reason to tweak their internal approach to business continuity planning will be better equipped to help members weather any future storms.
Larry Nichols is the president and CEO of Member Driven Technologies (MDT). MDT is a CUSO that hosts the Episys® core platform from Symitar® to provide a private cloud alternative for core processing and IT needs.