Fighting the Fallout of Friction

businessmen pushing shaping with various degrees of difficulty
By Trace Ledbetter

2 minutes

How are you making sure processes are moving, efficient, and effective for members and are promoting your growth?

“Friction” has become quite the buzzword in financial services in recent years, and for good reason—it’s a powerful force that can slow down processes, harm efficiency, cause member discomfort and dissatisfaction, and ultimately inhibit an institution’s growth.
While strategies for reducing friction have been top of mind for credit union management and executive teams for years now—after all, this is not a new phenomenon—the emergence of the COVID-19 pandemic and its economic ramifications has brought the issue even more front and center.
Filene recently asked more than 150 credit union leaders about sources of friction in their institutions as part of “The Art & Science of Organization,” a two-day virtual discussion sponsored by State National Companies.
As a business partner to thousands of credit unions for almost 50 years, we were deeply interested in hearing what these leaders had to say as they do their best to steward their credit unions successfully through these (we won’t say it) (yes, we will) “unprecedented” times.

Here are some highlights.

Asked, “In which areas does your credit union experience the most friction?” respondents answered as follows:

  • 36% Internal—between employees and or departments
  • 26% Technology solutions & implementation
  • 21% External solution providers/vendors
  • 9% Member concerns regarding accounts/account servicing
  • 8% Data security & privacy

We especially noted that these leaders see “technology solutions and implementation” and “external solution providers/vendors” as such high areas of potential friction.

The survey then addressed specific areas in the credit union that could be impacted by such friction—one of which is State National’s specialty, portfolio protection.

Importantly, when asked about the importance of proper risk mitigation for their portfolios in light of COVID-19 and its economic consequences, 23% of respondents agreed with the statement “Having a strong portfolio protection program in place is more important than ever.”

And when respondents were asked what makes a portfolio protection program strong, they said:

  • 19% Ease of use & program management
  • 17% Minimal member friction
  • 16% Transparency & visibility to member interactions
  • 15% Responsive communication with prompt resolution
  • 9% Low cost to membership
  • 9% Fast & efficient claims payment processes
  • 8% Proactive, non-disruptive borrower notifications
  • 4% Multiple credit union products & solutions
  • 3% Detailed & comprehensive insurance tracking

We’d love to know what you think about these questions, too—and how you are fighting friction at your credit union. Let us know.

Trace Ledbetter is EVP at CUESolutions Bronze provider State National Companies, Bedford, Texas, where he directs and oversees delivery of all services and products for lender services, including customer relationship management, underwriting and claims.

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