With the number of U.S. unemployment claims already crossing 20 million, many people are already surviving on reduced incomes — and 63% of Americans say that the government’s $1,200 stimulus check won’t be enough to fill the gap. As the global economy teeters on the brink of a recession, it’s no surprise that customers are reining in spending, pulling cash out of their accounts, and preparing for the uncertain future that lies ahead.
These moves can have negative revenue consequences for financial institutions. For credit unions and regional banks, however, this isn’t the time for panic or knee-jerk reactions. Customers are struggling right now and are in serious need of empathy and assistance. As a result, many people are turning to their financial institutions for help.
With their deep customer relationships and tradition of personalized service, credit unions and regional banks are particularly well-suited to answer the call. Now, credit unions, banks, and fintechs need to do something they should have done all along: prepare their digital channels to truly serve customers.
Taking one-to-one communication outside the branch
As COVID-19 continues to rattle markets and bank accounts, your credit union or bank can reassure customers by easing their financial strain and offering clear, personalized guidance. For example, if a customer has a mortgage, lease, or loan payment due, educate them about taking a “payment vacation.” If a member has improved their risk profile or credit score, expand their line of credit so they have more financial flexibility.
Improved digital communication does not mean closing down branches, but rather giving customers a greater choice of channels to use. While most bank branches are considered essential and remain open during a shelter in place mandate, in-person visits should be kept to a minimum for the sake of customers’ and employees’ health. That cuts off one of your financial institution’s most important channels to communicate with customers and serve their needs on a one-to-one basis.
To rise to the occasion and deliver real value to customers during the crisis, credit unions and regional banks need to develop new channels for real-time, personalized communication that address individual customer needs at scale.
Developing digital channels fast
In particular, financial institutions need to leverage digital channels, particularly their mobile banking apps. Leveraging mobile lets you replicate the one-on-one attention you’ve given members and customers in face-to-face interactions for decades. Reaching out to customers digitally is faster than direct mail and less interruptive than phone calls. Unlike emails, mobile nudges and content won’t get lost in overcrowded inboxes — and they’re relatively easy to personalize. When a customer is concerned about their finances for any of the reasons listed above, they’re likely opening their mobile banking app more often than usual, making the channel even more useful as a contact point.
Take this time to thoughtfully re-prioritize budgets to build the digital capabilities you need. In particular, look for lightweight solutions that can be implemented quickly, i.e., within weeks, not months or years. For example, a technology partner that can adapt an existing mobile app to deliver personalized content will be more useful than a partner that needs to build a new app from scratch. Customers need guidance, assistance, and reassurance tailored to their unique situations now. You don’t have time to waste.
A new role for financial institutions
If your credit union or bank leverages digital channels to offer customers thoughtful, relevant support at scale, you’ll build deep customer relationships that last long into the future. You’ll also begin to grow their roles in customers’ lives for months or years to come. Financial institutions, particularly those with strong roots in their communities, are increasingly becoming gateways of trust through which customers access information, services, and experiences that enhance their everyday lives.
By administering small business loans and loan forgiveness via credit unions and banks, the U.S. government’s coronavirus aid package has already put retail financial institutions at the center of the nation’s economic recovery. In the future, that role will expand.
Credit unions and banks will no longer solely serve as places people go to borrow money or make transactions. They’ll also serve as hubs for data, services, and support that assist all aspects of a customer’s lifestyle. That could include everything from making restaurant recommendations for customers visiting a new city (once travel is safe again) to managing sensitive data, like health records, on customers’ behalf.
If you act quickly to offer personalized support during this crisis, you’ll be well-positioned to win an increased market share in this new financial landscape. By helping customers now, you’ll have set your credit union or bank up for a bright future.