By: Chris Joy, Principal Consultant, Advisors Plus
The news concerning the possible spread of the novel coronavirus (COVID-19) in the United States can be unsettling. While the full domestic impact remains to be seen, credit unions can take proactive measures by anticipating possible business impacts, calculating potential responses and reviewing emergency preparedness plans.
As the situation unfolds, credit unions may want to analyze and test their possible responses to some of the potential social and market impacts.
Potential Market Impacts:
- Decreased branch and ATM traffic
- Possible interruption or reduction in paychecks for some members (disrupted supply chain/fewer work hours/closings)
- Delayed demand for traditional auto and mortgage loans
- Initial spike and later decline of in-person retail shopping
- Increased online buying and delivery of goods and groceries
- Travel and entertainment sectors might see declines in attendance and spending
- Deposit balances might increase as a net result of the above and stock market volatility
- Federal Reserve intervention – additional liquidity and reductions in the federal funds rate
Additionally, it could be helpful to remind your members about some of the built-in advantages of credit union membership, particularly your payment vehicles.
Useful Tips to Inform Your Members:
- Mobile wallets and contactless plastics do not require card insertion, PIN keying or signature pens. They can be used to pay for POS transactions without physically touching merchant terminals, which can help reduce the transmission of germs.
- Consider using video and other media to instruct your members about using online and digital services such as online banking, mobile apps, money transfers, mobile wallets and online payment services (i.e. Visa Checkout, EMVCo Secure Remote Commerce and MasterPass).
- Credit union credit and debit cards serve as perfect vehicles for online retail and online grocer purchases. Members can store their credit union card buying information on retailer websites for repeat purchases.
- Short-term lending solutions are available for temporary disruptions in employment.
While we hope the spread of the coronavirus can soon be contained or slowed down, it is important to help provide your credit union and members with proactive best practices that can help them respond to the situation.
Christopher D. Joy is a Principal Consultant with the Credit Card practice at Advisors Plus. Chris advises credit unions on issues involving portfolio growth, profitability enhancement, member reward programs, and the competitive and regulatory environments.
Chris has earned an industry-wide reputation for creating balanced, effective and credit union-centric credit card portfolio solutions for his clients. His 30+ years of experience in managing, growing and optimizing credit card portfolios provides unique insight when assisting clients in the highly competitive credit card marketplace.