Collections

Collections Lessons Learned from the Pandemic

By: Wendy Elieff, SVP, Client Service and Marketing, CU Recovery & The Loan Service Center

This year has propelled credit unions to analyze everything with a new perspective. Face-to-face interactions with members, a cornerstone of the credit union business model, have been limited and may be permanently changed. Most credit unions are evaluating and refreshing policies and procedures, staffing criteria and branch maintenance.

With this openness to change, thought leaders are considering how to most effectively apply lessons learned from the COVID-19 pandemic. One area to take a close look at is potential member defaults on loans once unemployment benefits and payment forgiveness run out. Here’s what credit unions should focus on to prepare for potential spikes in delinquencies and keep the member experience front and center.

Maintaining Member Trust

In the current climate, collectors should spend more time on each member call to assess their true financial picture and develop an appropriate solution. Your members need to believe that you’re there to support them and that you’re considering their situation and challenges in your decision-making processes.

Convenience is the New Member Loyalty

The pandemic has caused a major shift in member expectations and demand for real-time convenience. Members are looking for experiences that allow them to conduct business when they want and how they want.

The use of technology now reaches all ages because of its convenience, and members now expect to have the ability to secure a loan or make credit card payments remotely without having to interact by phone or in person.

Isolation has educated many members to depend on high-speed online service connections and move away from financial institutions that have low-quality digital services, slow-loading websites or limited online banking capabilities.

Member-centered Transformation

There is no doubt that member expectations are changing — and fast. The most successful collection department transformations focus on keeping the member experience at the center of every call. In doing so, credit unions will encourage loyalty when members are ready to look for additional services.

In a recent study, McKinsey Research found that up to 20% of global consumers expect to increase digital channel usage once the COVID-19 crisis has passed. Additionally, McKinsey predicts retail banking will experience up to three years of digital-preference acceleration.

Consumers Want a Provider with a Purpose

Challenging some traditional marketing methods, creating standard product and service campaigns is still the norm. Members expect your credit union to offer great rates and product features, so why spend your time and budget promoting them? The same holds true for campaigns focused on small changes in mortgage rates or a HELOC special. A more productive approach would be to create a campaign that addresses members’ concerns and how you can help them through their financial struggles and improve their financial health.

As 2020 winds down, credit unions hold an advantage over other financial institutions of being member-centric to begin with. Now is the time to focus on reaching account holders who align with your brand. Consumers want to hear more about what makes your credit union different, how you are connected within the community and that you are concerned for their welfare. They want to belong to a credit union they can trust and rely on.

Wendy Elieff oversees the success of the Client Service and Marketing teams in CU Recovery and The Loan Service Center, a PSCU subsidiary. Wendy has worked for CU Recovery for the past 22 years. She is responsible for developing, implementing and monitoring cohesive marketing strategies to increase brand awareness. She is also responsible for building and maintaining client relationships by staying abreast of and responding to changes in the credit union marketplace.