5 Things We Hope Credit Unions Keep Doing in the New Normal

If there’s anything we’ve learned from COVID, it’s that the future is uncertain. Over the past 18 months, credit unions across the country have done an impressive job finding ways to rapidly pivot and to serve members as their communities dealt with lost jobs, lost businesses, extreme weather events, civil unrest, childcare struggles, mental health challenges, and deadly illness.

As the recent upticks in cases show, COVID is not done with us yet. But if there’s one silver lining of this hard time, it’s that credit unions have truly lived their “people helping people” mandate.

Here are five things we saw take root during the pandemic that we’re hopeful credit unions will continue to embrace going forward.

 

1. A just economic recovery that focuses on the most vulnerable members.

Since March 2020, it’s been abundantly clear that even if we were all in the same storm—i.e., dealing with COVID—we weren’t all in the same boat. Especially in those early days, the world was largely split between those who could work from home—even if that work was often punctuated by the screams of children—and those who went to in-person jobs every day, stocking grocery shelves, producing food, and packing Amazon boxes to make our shut-down lives possible.

Most of the people who held those jobs were low-wage workers, and a disproportionate percentage were people of color. Many put themselves in real danger to earn a paycheck. And many others lost their paychecks as restaurants, retail, and other service jobs disappeared.

According to a January 2021 report by Callahan & Associates, credit unions acted swiftly to help members manage the financial impacts of COVID with loan deferrals, stopped or slowed repossessions, increased credit card limits, Paycheck Protection Program (PPP) loans, waived fees on ATM withdrawals, early CD withdrawals, and ramped-up donations, support and fundraising for local communities. All good things.

We hope credit unions will examine some of the changes they made during COVID and give them a post-pandemic twist. It’s likely some of their most financially vulnerable members will continue to face the hardships that made the need for these services and assistance so critical over the last year. After all, the pandemic may eventually wind down, but inequality continues to rise. How can credit unions help members continue to not only regain, but maintain, financial stability?

The Biden administration recognized the impact credit unions can have on the most vulnerable Americans by awarding 244 Community Development Financial Institution (CDFI) credit unions a total of $408.1 million to help the communities they serve recover from the pandemic. Treasury Secretary Janet Yellen remarked that “in serving places that the financial sector historically hasn’t served well, [CDFIs] lift our whole economy up. By one measure, every dollar injected into a CDFI catalyzes eight more dollars in private-sector investment.”

That sort of public/private partnership is heartening and one we hope to see more of. In a similar vein, there has been momentum around creating a public bank in New York to help advance racial and economic justice. Linda Levy, CEO of Lower East Side People’s Federal Credit Union, which is also a CDFI, supports the effort because a public bank could invest the city’s deposit funds into CDFIs and similar entities to help lift up distressed communities. We’re hopeful that the bill will pass and inspire similar efforts elsewhere.

 

2. A human + digital approach

In a prior CU Insight article, 5 ways to keep it personal in a digital-mostly world, we speculated that many members who had been forced to go digital would continue to use this channel going forward. That’s proven to be the case: in a recent Microsoft survey of financial services executives, nearly three-quarters of those surveyed said at least half of their customers’ financial activities had switched from in-person to digital.

The personal touch has long been a key credit union differentiator and it’s vital to continue to maintain this, even if more members now connect with your credit union in a completely digital way. We offered several suggestions in our post: adding staff photos to your website, enabling video chats, offering virtual financial coaching, and organizing virtual events.

These ideas are even more important given the continued embrace of digital tools in the financial services space. Members are becoming increasingly comfortable using digital channels for both day-to-day tasks—depositing a check—and highly personal or complex things, like managing their debt or planning for retirement. But much of that comfort level, especially for personal or complex tasks, depends on being able to replicate a face-to-face experience—which is what video and other digital tools can do.

A people-helping-people approach to digital also involves prioritizing inclusive design. In our CU Insight article, Why your most vulnerable and stressed out members should come first, we discussed the importance of designing inclusive digital tools that center the needs of your most vulnerable members instead of treating them as “edge cases.” Whether you’re redesigning a website, selecting a new online banking provider, or adding chat capabilities to your contact options, your members’ wide-ranging fears, stresses, hopes, and dreams should always be at the core.

 

3. Support for small businesses

Small businesses took an especially heavy hit throughout COVID. According to this report from McKinsey, small businesses (those with 500 or fewer employees) provided almost half of all private-sector jobs in the U.S., but accounted for 54% of the jobs that were most vulnerable during COVID. And minority-owned small businesses, especially those with Black owners, were hit even harder.

Although some of their business has returned—for those who were able to survive the darkest days of COVID—the same challenges these businesses faced before the pandemic remain, with access to affordable credit and inconsistent cash flow topping the list for many.

In a prior CU Insight article, 5 ways credit unions can help save small businesses, we urged credit unions to help local business owners survive COVID by sharing their stories, redirecting sponsorship funds from cancelled events to support business owners, committing to buy local, partnering with local businesses to support vulnerable employees, and partnering with other credit unions to provide small business relief grants.

To help small businesses thrive in today’s living-with-COVID normal, we’d suggest credit unions double down on all our suggestions both this year and beyond—especially access to affordable credit. Yes, credit unions must continue to underwrite loans in a way that doesn’t put their own financial health at risk. But are there viable changes that would allow your credit union to say “yes” to more local business loans and a wider variety of small business owners?

Another intriguing idea: offering a credit card like this one from VSECU in Vermont, which incentivizes member patronage of local businesses.  This card offers members a low standard interest rate, plus an even lower rate (currently 6.5%) for their Vermont-based purchases. Sounds like a win-win to me!

 

4. Communications that focus on products AND purpose

As we first mentioned in a prior CU Insight article, Your members are focused on COVID-19 – your marketing needs to be, too, credit union communication must go beyond products and services. We talked about honing in on the “3 C’s”: core focus, commitment to transparency, and memorable communication.

That means making an effort to tie all your communications, even if they’re product-centered, to the credit union philosophy and your core reason for being. It also means keeping your members in the loop even if you don’t have all the answers. A client told us during a recent community roundtable that COVID helped them get in the habit of communicating more frequently and more transparently.

When it comes to memorable communication, we know you have products to sell. But you can still lead with impact. Don’t try to make a product sound interesting or different when it’s actually quite similar to the products offered by most any financial institution. Even if you are offering a unique product or an awesome rate, emphasize the impact the product will have on one’s financial wellness rather than leading with the APR. And make sure to highlight that they will also be joining a cooperative that returns its profits to its members.

Even in a post-pandemic world, there will always be a lot to communicate about that doesn’t tie directly to products. We were heartened to see some credit unions speak up in support of Black Lives Matter and hope that more will consider joining the conversation about racism, climate change, gender disparities, and other pressing social issues that matter to your members. It’s a new competency that has been challenging for many of us to acquire (it certainly has been for me), but it is increasingly vital for purpose-driven institutions in a world full of challenges.

Credit union support of the financially underserved is nothing new—credit unions were founded to do just that. But the turmoil of 2020 made it clear credit unions had to do more and make sure they got the word out to members and communities about their efforts.

 

5. An increased focus on meeting employees’ diverse needs

Last, but certainly not least, credit unions need to consider how to better meet not just members’ needs, but their employees’ too. It’s been a tough year and a half for your team, and now is the time to show them that you value their contributions and care about their well-being.

Judah Musick, former Chief Innovation Officer at Red Rock Credit Union and a guest on The Remarkable Credit Union podcast, points out that if you’re wondering what your community needs, think first about what your employees need. Many challenges they face existed long before COVID but were exacerbated by the pandemic. For instance:

Childcare. As daycares and schools closed in 2020, families scrambled to figure out how to juggle their personal and professional lives. As we discussed in this post, women took a disproportionate hit and, among other challenges, were three times more likely than men to be unemployed because they lacked childcare. Providing childcare to employees might seem like too big an ask, but two credit unions (that we know of) did just that, right on site: State Employees Credit Union and Roswell Community Federal Credit Union.

Financial wellbeing. It might be easy to assume credit union employees are in good shape financially—but the reality isn’t that straight forward. Research conducted by Filene pre-pandemic found financial struggles happen within the credit union workforce too, and the reason many Americans struggle isn’t because they don’t understand finances or are spending irresponsibly, it’s because the cost of basic needs has outstripped their income and savings.

What steps has your credit union taken to understand the financial wellbeing of your employees? Does your benefits package actually address the key pain points that your employees experience? What do you do to help employees save smart—whether that’s for everyday needs or to prepare for retirement? How are you preventing them from going to a payday lender in an emergency instead of you? Is your pay fair and equitable? Too many credit union employees struggled with their finances before COVID, and it’s reasonable to assume the pandemic hit them just as hard as your other members.

Remote work. Before the pandemic, most credit unions likely saw remote or hybrid work as a non-starter—after all, how could organizations with a client-facing retail environment deliver service digitally? But now that we’ve navigated the realities of COVID, there’s a wealth of evidence to suggest what seemed impossible isn’t.

Check out this article to learn how two credit unions, CDC Federal Credit Union and VyStar Credit Union, are moving forward with a hybrid work model. Vystar is following CDC guidelines for in-office/branch safety and determining which roles can work well with a staggered in-office schedule, with a goal of 50% of its work forces using remote work going forward. CDC Federal has found ways for member-facing employees to deliver services remotely, with a focus on technology solutions. They also have set a 50% target for employees working remotely long term.

Here at PixelSpoke, we anticipated remote work being a temporary solution when we sent employees home on March 13, 2020. But as of July 12, 2021, we announced we’d be staying remote for the foreseeable future. We recently wrote about how we made that choice, the things we’re most excited about—and the things that have caused us a sleepless night or two!

None of us know if COVID has an end date or will become something we find ways to live with, like the flu. In either case, it’s driven major changes—both positive and challenging—that will continue to impact our country and our credit union movement for years to come.

Let’s not return to “business as usual.” Let’s work together to reimagine the possibilities and help our members, employees and communities thrive, no matter what the future holds.

This article originally appeared on CUInsight.com.