Communicate with empathy; prioritize the member experience; and increase your digital accessibility.
Sponsored by SWBC
It’s been a little over a year since the COVID-19 pandemic disrupted our lives on a scale that most of us had never experienced before. The events of 2020 prompted credit unions to make nimble adjustments to accommodate stay-at-home orders, with most having to close branches and limit in-person interactions. A slowing economy and high unemployment have caused many families to struggle financially, and credit unions have had to adapt accordingly. Adoption of digital technology—already on the rise—soared last year, which left some credit unions scrambling to keep pace.
Today, many credit unions are reevaluating how they conduct daily operations. They’re also reconsidering collections strategies that may have been successful in a pre-pandemic environment but are no longer optimal for the modern digital landscape.
In this article, we’ll discuss the lessons the collections industry has learned from the COVID-19 pandemic and give you tips for developing collections strategies to prepare for a potential rise in delinquencies in 2021.
Lesson #1: Communicate With Empathy
Credit unions should make a concerted effort to be sensitive to their members during difficult times. In particular, they need to pay attention to how they’re connecting with their members, as well as the level of empathy agents are bringing to collections communication.
At the height of the pandemic, 22.2 million people lost their jobs. While the economy has recovered substantially, there are still lingering effects of financial insecurity. The Federal Reserve’s measure of household financial well-being found that only 51% of respondents who had employment disruptions said they were either doing okay or living comfortably this time last year.
In short, this has been an extremely stressful year for many of your members. The last thing you want to do is come off as sounding too “salesy” or tone-deaf when you’re speaking to them—especially about a collections issue.
The key to successful collections communication in 2021 is empathy. As a credit union, the best thing you can do is try to put yourself in your members’ shoes. Practicing active listening is also important. Truly listening to each situation will help build the rapport that is critical in any successful relationship. Getting to know what your members have to say—and don’t say—may help you discover a solution that will help them with their financial situation.
Building trust with your members by reassuring them that you are going to be there for them and will have their backs if they hit difficult times should be a key messaging strategy going forward.
Lesson #2: Prioritize Your Member Experience
When the COVID-19 pandemic limited face-to-face interactions last year and into 2021, credit unions had to reimagine what their member experience looked like. You may not be seeing members in person as much as you were before the pandemic, but that doesn’t mean you can afford to provide a lackluster member experience when you’re communicating remotely.
Consistency and redundancy across multiple channels form a critical component of any credit union’s post-pandemic communication strategy. Modern consumers are used to seamlessly navigating from their computer screens to mobile phones to their online banking portals. Credit unions should provide this level of channel integration to give your members an optimal member service experience.
Having regular communication touch points using multiple channels can help financially burdened members access the information and resources they need to get out of arrears.
Lesson #3: Increase Your Digital Accessibility
A recent study found that up to 20% of global consumers expect to increase digital channel usage once the COVID-19 crisis has passed. Additionally, experts predict that retail banking will experience up to three years of digital-preference acceleration as a result of the pandemic.
Developing a strategy to become more digitally accessible involves enabling your members to access your services from a variety of channels, including a website, a mobile application, social media networks, call centers and physical branches. Your digital experience should have a similar “feel” on each platform and align with your overall member service experience. To maximize the impact of your digital communication, each channel should also provide metrics so you can use them to gain data-based insights about usage and engagement.
As you reevaluate how you conduct daily operations and reconsider collections for the modern digital landscape, we hope this discussion of lessons the collections industry has learned from the pandemic—and the specific tips we’ve provided—will support your efforts going forward.
As account VP for the financial institution group at CUES Supplier member SWBC, San Antonio, Texas, Brad Eral serves financial institutions throughout the Midwest with lending services, insurance and loss mitigation programs.
Putting your best collections efforts forward in a post-pandemic environment is a daunting task for any credit union. SWBC offers a scalable, omnichannel (email, text, interactive voice response) solution that saves our outsourced collections clients an average of 35-50% annually when compared to in-house efforts. Visit our website to learn more!