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Shifting Credit Union Trends in the Era of COVID-19 — Why It’s No Longer “Business as Usual”

Jun 17, 2020 8:15:00 AM

It’s not an exaggeration to say that the coronavirus pandemic of 2020 blindsided businesses across all industries — and around the globe. Financial institutions, including banks and credit unions, have been hit especially hard, as new home and auto loan applications have slowed drastically, customers struggle to meet financial obligations due to rampant unemployment, and traditional ways of doing business have gone sideways into a new virtual reality.

Many brick-and-mortar credit unions have struggled with the sudden need to operate completely remotely. Many have a strong reliance on antiquated approaches to manual data entry and the storage and retrieval of paper documentation, thanks to a largely absent digital infrastructure.

Let’s take a closer look at unique credit union trends — as well as how some are successfully adapting to the “new normal” ushered in by the era of COVID-19.

 

Changing Face-to-Face Interactions

Because credit unions can’t welcome members into their branches in person in the same ways that they used to, branches are limiting their lobby hours across the board, with a commitment to social distancing. Many are limiting the number of members allowed in a branch at any given time — with floor markings that always keep members at least 6 feet apart. They are increasing cleaning and sanitizing measures, installing acrylic shields, and requiring staff to routinely wear masks and gloves. Some are scheduling face-to-face meetings by appointment only and dedicating early morning hours to servicing only their elderly and immunocompromised customers.

 

Reliance on Virtual Solutions

Across the board, credit unions are increasingly relying on remote solutions such as mobile and drive-through banking, ATMs, and online and phone contact centers, among other service channels. They are also leveraging digital lending technology, which enables new account and loan requests to be completed online, as well as the use of remote notary services.

 

Remote Work Solutions for In-House Staff

Industry-wide, credit unions have equipped their team members with the technology needed to fully service customer needs while working remotely from home. Many have added microsites or intranet sites with remote file access to keep employees informed and up to date.

 

New Financial Relief Alternatives

In Spring 2020, both the Federal Financial Institutions Examination Council and Northwest Credit Union Association issued updated guidelines for addressing the threat of a pandemic outbreak and its potential impact on the delivery of critical financial services. Both organizations identified actions that financial institutions should take to minimize the potential adverse effects of a pandemic, including periodically reviewing related risk management plans and continuity plans to ensure that they can safely deliver products and services with minimal disruption to consumers, businesses, and communities.

At the time those guidelines were released, credit unions were scrambling to find ways to accommodate the needs of members who are now facing true financial crises related to the pandemic. Now, a variety of relief programs in the form of free financial counseling, emergency loans, and payment extensions are typically available for members who meet qualifying criteria.

Here are some examples of new relief options offered by some of the largest credit unions in the country:

  • Navy Federal Credit Union is offering their eligible members access to loan extensions, deferred payments, credit card line increases, student loan forbearance, a Pandemic Relief Loan, overdraft protection, fee-free transfers, and penalty-free certificate withdrawals.
  • State Employees’ Credit Union (SECU) provides a variety of programs for eligible members who need a new loan or payment extensions on an existing SECU mortgage, vehicle, credit card, or personal loan. Additional options are available for SECU mortgage loans through a Mortgage Assistance Program, which offers modified monthly payments, forbearance, and loan modification or refinancing.
  • PenFed Credit Union has a Financial Hardship Center that provides information and resources for members in need of deferred loans payments, forbearance, and modifications due to both short-term and long-term hardships.
  • The Member Assistance Team at BECU helps eligible members with short-term payment relief and loan modifications on BECU loans and revolving credit, including home equity, auto, boat, RV, credit cards, and personal loans. In addition, they have suspended foreclosure actions and collection lawsuits.

 

Navigating the New Road Ahead

By all accounts, the trend toward, and demand for, virtual services is here to stay, not just for credit unions and banking, but across almost every industry. And short-term adjustments like those described above are likely to have a lasting impact on how credit unions will operate and how financial interactions will take place in the future.

In fact, The Financial Brand websites describes a “new normal” that most financial institutions and their customers will need to adjust to. Likewise, Cognizant’s Center for the Future of Work released a special report titled After the Virus that examines the post-COVID-19 effects on work, education, entertainment, e-commerce, and human interaction. Put simply, the report states that life as we know it will change — and it provides a foundation of insights that the banking industry can leverage now to address the future needs of the market.

 

How CDP Can Help

If your organization is struggling with acclimating to the “new normal,” CDP can assist you in implementing changes that will help you transition to virtual services, maintain excellence in service, and become more efficient — even during uncertain times like those we are currently facing. Our committed team of digital transformation consultants can help you safely and securely digitize documents, automate manual processes, and leverage custom-fit technologies to make virtual information management easy, both for your employees and your members.

With a variety of services — including eSign, our electronic signature solution — we can help your financial institution affordably and effectively manage virtual interactions, such as secure and encrypted sending, receiving, and signing digital documents on demand on any device. Contact us today for information on how we can help you prepare for the future of the financial industry. You can also download our eSign explainer for more information:

esignatures for banks and credit unions

Kait Kluz
Written by Kait Kluz

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