How COVID-19 Is Creating A ‘New Normal’ For Credit Unions

Shutdowns. Lockdowns. Shuttered branches.

Banking may be forever altered.

The ongoing coronavirus pandemic is disrupting financial services, as consumers pull back on spending, raise cash to deal with emergencies and take to ordering, well, everything online.

In an interview with PYMNTS, Steve Salzer, senior vice president, legal and enterprise risk at PSCU, said that amid the disruption, opportunities are taking shape for credit unions (CUs) to cement their relationships with existing customers and serve them in new ways.

As Salzer told PYMNTS, “There have been some significant shifts in consumer demand — and those consumers have been increasingly transacting, and looking for help, across online channels.”

The shift to online conduits for daily financial life has come as CUs have had to close branches or conduct activity by appointment at those locations that are open.

At the same time that CUs are seeking to help members make the transition to online and mobile banking, the financial institutions (FIs) themselves are implementing (and where necessary, recalibrating) their own business continuity and pandemic response plans.

“They’re responding to what’s going on in their environments,” noted Salzer, “whether it may be the particular statistics for hospitalizations and COVID-19-related deaths or governmental orders that may apply to their branches and operation centers.”

Asked by PYMNTS how those continuity plans may be challenged by the relatively limited resources CUs have at their disposal compared to their larger brethren, Salzer said the credit union vertical is a collaborative one, and that PSCU has leveraged its analytics and consulting services to help member firms identify trends within their membership bases — as well as handle the additional influx of calls that may be coming into CU contact centers.

“We’ve also implemented, on a rapid basis, some emergency cardholder services to provide cardholder relief so that credit unions can provide that financial assistance to their members,” Salzer said.

The Permanent Changes

There are parts of the shift in the financial services landscape that will become permanent, said Salzer, in a “new normal” that will impact how CUs interact with their customers.

Individuals and families are likely to start saving more money as the economic environment continues to be uncertain. Corporate clients may look for new ways to gird against the financial shocks tied to supply chain disruption. CUs will have ample opportunity to offer new financial products for members — but it takes data to craft the new features that will help clients refashion their financial lives. Historical data can help serve as a baseline for those services on offer from a CU, said Salzer — and, analyzed in real time, can help keep offers timely and relevant.

He cited contactless cards and wearable devices as ways and means for consumers to continue to shift away from cash. Digital banking will also become more widespread.

“As fewer people visit branches, there is definitely an opportunity for CUs to enhance and elevate their digital banking strategies,” said Salzer, with additional payment options and tightly integrated and customized experiences that can rival offerings of big banks.

But as consumers turn increasingly to bits and bytes to transact, that opens the door for fraudsters to step up their attacks, as card-not-present activity proves a tempting lure. For CUs, Salzer said, fraud management efforts — along with collaboration and information sharing across the institutions themselves — will become a critical endeavor moving forward.

“It’s going to be important to explore different ways to keep members safe,” he told PYMNTS, “through authentication, the use of biometrics and artificial technologies to make sure that consumers and their information are protected.”