Credit Union COVID Task Force Sees Opportunties Despite Challenges
The latest report states credit unions "use the unique operating environment as an opportunity to build brand loyalty."
A new outlook report for the credit union industry from the “COVID-19 Restart and Recovery Task Force” indicated credit unions are losing ground to big banks, while opportunities for digital growth remain strong.
The report, released this week, reviewed items surrounding credit union brand loyalty, digitalization of services, a new broadband initiative and a competitive analysis between banks and credit unions.
The task force, which CUNA formed in June, is comprised of 27 members from various areas in the credit union industry and currently meets once each month to address the coronavirus pandemic and its impacts on credit unions.
According to the report’s competitive analysis, “More than 50% of new consumer accounts entering the financial services industry went to the top four large banks – they are starting to beat credit unions at their own game.” The report said the nontraditional and national players are “setting the bar high for consumer expectations” as organizations like Apple Card can process an application in about 28 seconds. And banks such as Chase Bank are currently spending “30 cents on the dollar integrating new technology into their systems.”
Financial institutions appear to be using the pandemic as a reason to invest heavily in technology and digital banking improvements “that will transform our industry,” the report stated.
The report indicated that despite the inherent risks the pandemic brings, credit unions have an opening to solidify brand loyalty especially among employees when it comes to the health and safety steps taken at the physical branch. The report encouraged credit union leaders to take the following steps:
- Ensure sick leave policies encourage sick employees to stay home.
- Ensure sick leave policies meet requirements of new laws.
- Policies should align with the behaviors credit unions want to see from staff.
- Consider the risk tolerance of individual employees and shift operating areas for employees based on their risk tolerance.
Due to the decline of foot traffic into branches and fewer ATM transactions, the report indicated that credit unions take advantage of the mostly-digital lives members now lead. The report suggested to “adapt to this changing environment, credit unions must drive scale, execute on digital transformation, deliver exceptional member service, innovate products and services, and adjust to new demographic and workplace realities.”
The report also announced that CUNA plans on supporting efforts to expand broadband services and is pushing Congress to fund these efforts “in areas of rural America that do not currently have sufficient access to broadband.”