As credit unions look ahead to 2021, improving experiences and strengthening relationships is more central to a successful member-centric strategy than ever. Limited in-person interactions and community events that credit unions have historically relied on to differentiate themselves must be reimagined as social distancing remains a priority, and the economic impact of the pandemic is only just beginning to be felt.
At Temenos Synergy 2020, these concerns were top-of-mind for attendees and speakers alike, especially those working at credit unions whose communities have been highly affected by the shift to digital banking. The following article captures three inspiring examples of how Temenos credit union customers have provide excellent member service and continue to grow despite this year’s uncertainty, and how fellow credit unions can incorporate such ideas into a member-centric strategy for 2021.
Use Automation to Support – Not Replace – Human Connection
Automation can seem like a scary, daunting word to credit unions whose bread-and-butter is providing member-oriented service. If automation replaces interactions between people, how will credit unions get the chance to do what they do best? Underpinning this line of thinking is the belief that automation replaces connections between people: in reality, automation augments these connections by eliminating certain tedious, time-consuming tasks and freeing credit union team members to focus on relational activities that technology cannot replicate.
A great example of a credit union that has demonstrated how automation can support connection is PSECU. In the late 1990s, PSECU began transitioning to a digital-first model. While they have two physical branches to support certain member transactions, the vast majority of their services and products can be accessed digitally. PSECU was way ahead of the curve in this regard, spearheading initiatives to make their services portable and accessible via end-to-end digital experiences long before smartphones were commonplace.
In 2016, PSECU switched their origination platform to Temenos Infinity to focus on making transactions simpler and automate a communications strategy for people requesting a new account or loan that was triggered by specific rules. This allowed PSECU to automate up to 70% of their decisioning, depending on the products, and fulfill most loan requests from members in less than 15 minutes. They have also fully automated their document generation process: most documents are automatically generated and sent digitally, and the ones that need to be mailed are automatically generated, printed and sent without any manpower required from team members.
By speeding up previously long, tedious processes and eliminating unnecessary back-and-forth between employees and members, employees can act as trusted advisors rather than harbingers of annoying administrative tasks. In every part of PSECU’s automated communication strategy, whether by email or phone, members have the chance to connect with a PSECU employee to get additional clarification, get more details on the status of their application, and more.
“Temenos has been a great partner for many years,” said Andrew Coy, Assistant Vice President of Credit Services for PSECU. “With Temenos, we have started working towards a 100% digital preapproval process, finding ways to improve and streamline our applications and further mitigate fraud to protect our members.”
Translate Member Feedback into an Actionable Strategy
Most credit unions want to be known as a place where members feel seen, valued and prioritized when they walk in the door—this should not be any different when it comes to their digital experiences. Credit unions must realize that members are not only comparing their digital credit union experiences with those from other financial institutions, but from their consumer digital experiences, as well. Retail tech giants like Amazon have continued to grow steadily since their inception because they take feedback to heart and are not afraid to continuously iterate and experiment to make small, but powerful, gains in conversion and satisfaction.
For another Temenos credit union client, member feedback is central to everything they do, down to gathering direct, often unsolicited feedback from app store reviews. They have maintained a 4.7 rating in the app store by taking this feedback seriously and incorporating it into updates that benefit all members. Additionally, when the pandemic changed operations, their marketing team used member feedback on digital onboarding to create several YouTube videos that helped people navigate the digital transition. By keeping an open mind and responding to member needs, they found several ways to leverage member feedback almost immediately and deliver tools and products that uphold the value of that member relationship.
Lay the Groundwork for Compassionate Collections
As the pandemic stretches on, delinquencies are on the rise: unemployment has more than tripled, and delinquency rates have increased at the fastest rate in the last five years. For mission-driven credit unions whose member relationships are at the heart of their success, figuring out a compassionate, efficient collections process is vitally important to maintaining a strong reputation and growth.
First Tech Federal Credit Union has seen firsthand how the importance of this process plays out. “We really haven’t seen normal in some time; there’s been so many natural disasters and unusual events, we’ve been navigating challenging times since 2008,” said Troy VanRiper, VP of Special Assets Management at First Tech. “As a credit union, we really do care about the financial fitness of our members and throughout these tough years we have prioritized building relationships and rapport with them.”
For credit unions like First Tech, a major goal in collections is to make it as member-driven as possible. Members do not want to feel like they are spinning their wheels and getting nowhere in terms of communication with their financial institution. Instead of repeatedly calling members month after month, credit unions who value compassionate collections want members to strengthen their finances, start paying on time, and get back to good standing through collaborative process.
At First Tech, their proactive approach to COVID-related delinquency came in the form of identifying accounts that were at the greatest risk for future default. Those accounts were worked earlier, before things got more complicated. They knew there would be a lot of requests for assistance and broke the collections team into three separate groups to help prep documents and checklists, field inbound calls, and process COVID-19 assistance requests. Additionally, they outsourced 5,000 accounts for 30 days, a transition made seamless by the Temenos platform. “We were able to meet and maintain our SLAs, getting waiting times down from 30 days to 7 days,” said VanRiper. “Our technology and efficiency gains have been the direct result of our relationship with Temenos.”
Despite the inherent chaos of the pandemic, First Tech leveraged the Temenos platform and their own internal processes to turn what could have been chaos (and was, for many other banks and credit unions) into a turning point for their organization. Even with a huge spike in unemployment and requests for assistance, they experience no increase in delinquency or charge-offs, and members sentiments improved in the second quarter.
To achieve success while remaining member-oriented and flexible, it is important that credit unions lay the groundwork for spikes in collections activity before disaster strikes. Leveraging automation and data-driven, rule-based processes that can be easily scaled to meet volume not only make it easier for members to achieve financial stability but also helps team members handle unexpected increases in workload in an orderly, efficient manner. When team members have clear direction, they can provide advisory services to members and represent your credit union as a leader in turbulent times.
Start Now to Reap Rewards Later
At the end of the day, what all of these digitally-savvy credit unions have in common is an eye on the future and a willingness to take risks to move forward with digital service delivery. As the fallout from the pandemic stretches on with continually rising long-term unemployment, credit unions must continue their efforts to provide automated processes that support member relationships, listen to and act on member feedback and begin proactive efforts to manage the coming spike in collections in 2021. Now is the ideal time to make additional technology investments and identify strategic partners who can help credit unions achieve these objectives for next year and beyond.
For additional insights into how Temenos customers are providing excellent service for their members through thoughtful technology investments and digital initiatives, explore the Temenos Synergy content hub. The Synergy page features 40+ on-demand sessions exploring all aspects of growth, from deposits, digital strategy, loans, member relationships, strategy and more.