4 Ways Credit Union’s Can Step Up and Capture The Opportunity

One of our family’s all-time favorite movies is The Sound of Music. We make it a point every spring, preferably on a cold and rainy day, to curl up and watch the movie together. It’s no wonder that my children know all of the songs and can quote many of the scenes word for word. While thinking over this article, a scene from the movie came to mind which seems very applicable today as we work our way through the challenges and changes brought on by COVID-19.

This particular scene that came to mind happens at the very beginning of the movie after Maria has been asked to leave the abbey to take on the challenge of nannying for the Von Trapp Family. This is a difficult time for Maria, and could even be considered a crisis, as her life-long dream of becoming a Nun has been put on hold and may even been in jeopardy.

As she leaves the abbey with her bags in hand and wearing the dress that not even the poor wanted, she turns to look back at the abbey and says, “When the Lord closes a door, somewhere he opens a window.”

For many people and businesses, COVID-19 has closed a lot of doors. For those simply waiting for them to open back up, I fear there is going to be disappointment and discouragement. The lesson we can learn from this is that while this crisis will change things that probably should have never been changed, and created challenges for which we wish we’d been prepared, it has provided an opportunity to create a lot of good and generate a significant amount of momentum moving forward.

Right now, there are more opportunities for credit unions than threats. In fact, I believe that those credit unions positioned to take advantage of the opportunities will catapult themselves ahead of the competition and leave those waiting by the door in the dust.  I’d like to point out a few areas of opportunity I see today that credit unions could be capitalizing on at a much higher level. However, before doing that, I think it’s important to define what I mean by “staring at the door.”

Are You Staring at The Door?

In times of crisis, leaders tend to shift employee contribution down a level. This means that if you are a vice president, you now become a branch manager. If you are a branch manager, you now become a loan officer or even a call center agent or teller. If you are a loan officer, your primary responsibility is to become a processor because the layers of leadership and support have been eroded.

This reactionary approach to a crisis happens because it is the easiest fix to the problems at hand. Short term gain but a long-term loss. Rather than challenging employees to step up and take on more responsibilities that would require trust, training, and coaching, it is easier for leaders to simply ask those who already understand the job functions and responsibilities to step down and fill in the gaps. Unfortunately, this reactionary approach undermines the credit union’s effectiveness and inhibits their ability to capitalize on the numerous opportunities before them.

Restructure to Increase Capacities

Rather than reacting, credit unions right now need to be responding with a clear plan and a strategy to maximize employee usage and focus on the areas which are producing results. This can be done by identifying areas which need more support and filling them with employees from areas of the credit union that have excess caused by COVID-19 adjustments.

For example, in an article published on The Financial Brand titled, “What the ‘New Normal’ Might Look Like in Banking,” Bill Streeter suggests credit unions accelerate what has been a gradual shift to a new structure for the branch network. He says:

“Financial institutions should be prioritizing branches and markets by value, parsing the expendable from the indispensable. That may involve exiting markets with low market share, retrenching around a few “strongholds.” Even in such strongholds, some branches may need to be downsized to ATM/drive-through-only configurations, in an exaggerated hub-and-spoke model.”

While this shift suggested here is more of a permanent one, the concept can be used in the short term as traffic for many credit unions branches has been reduced.

COVID-19 has also reduced the workload of other departments in the credit union creating unused employee capacity that could be redirected to other areas of the credit union. Allow me to point out two opportunities I see, and how to utilize the current situation we face due to COVID-19 as an advantage to capture them.

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Proactive Sales Opportunities

Many credit unions are experiencing a significant drop in loan sales but an increase in new deposits and new checking accounts. This of course is due to social distancing, lower consumer confidence, and the loss of jobs or concern for the future stability of employment. This drop in sales is actually an indication of a new need your members have and which your credit union should be addressing and filling.

Many of your members are looking for ways to reduce their monthly budget and simplify their finances right now. This is an amazing opportunity for credit unions, but it will require a dedicated, proactive response to capture it. By reassigning and redirecting employees who have excess time, credit unions can begin making outbound calls to their members to educate and help them bring more of their business to the credit unions. Here are a few suggestions on where those efforts could be focused:

  1. Loan Recapture: While new loan requests for auto and RV loans and credit cards may not be flooding in right now, that doesn’t mean there isn’t a need for them. In fact, for the majority of credit unions, the number of loans your members have with other financial institutions at any one time far exceeds their request for new loans. This means you can fill up the loan queues with performing loans, while also helping your members restructure debt, lowering their interest rates, and reducing their payments.
  2. Business Lending: For credit unions who are participating in the Paycheck Protection Program, and even for those who are not, an outbound call to a member to discuss the business products and services your credit union has available, and to answer basic questions, would be extremely helpful. Employees can be given a crash course in the loan options available and a list of members to call and capture the opportunities that currently exists.
  3. Mortgage Lending: Okay, you may be thinking, “But Nick, we are already overwhelmed with mortgages. It would be futile to make outbound calls and start more applications right now.” I will answer this dilemma in just a moment. For now, focus on the window of opportunity your members have today to refinance their mortgages and lower their payments. For those who qualify, this will save thousands in interest. When you consider just how many members there are right now that need to refinance before rates jump back up, how can you not call to let them know?

These are examples of ways to increase loan volume, but there are countless discussions to be had with your members on ways the credit union can serve their needs. When your team starts making outbound calls, they will certainly be able to sell online and mobile banking, overdraft options, and debt protection. They will help members with payment deferrals or loan modifications.

There is simply no downside to engaging your team in outbound calling right now. When your credit union provides this level of value for your members, something their other financial institutions are likely not doing, they will be much more open to bringing their full financial relationship to the credit union now, or in the future.

Consumer, Mortgage, and Business Lending Support

If these teams are currently working at capacity at your credit union, you know there is business being turned away or falling through the cracks. That means lost revenue and reduced member trust and loyalty. By identifying employees who have excess time capacity, the credit union can move them partly or entirely to support these areas which are overwhelmed. This is how you can have employees making proactive outbound calls, and bring in new business, even though you are currently overwhelmed.

I understand what you are thinking now, “But you can’t just take a teller and turn them into a mortgage or business loan officer. That isn’t realistic.” If you are thinking this, you are absolutely right. However, by separating out the functions that take skill, specialized knowledge, licensing, and experience from those that are process based, routine, and can be managed by nearly anyone, it’s easy to see where these team members can contribute. Doing this will then free time for your skilled employees to produce more volume.

There are other opportunities for reassignment. For example, excess branch leadership can be asked to manage these new groups of support employees or be given oversight of multiple branch locations. This frees layers of leadership for other needs and opportunities such as new product development, securing or developing new and future partnerships, and addressing the strategic needs of the credit union which continually get pushed to the side. Really, the sky is the limit if you look at the challenges and opportunities from a different perspective.

Many credit unions have already seen the opportunity and are making these adjustments by asking their employees to step up, and are reassigning employees who have excess capacity. For those reading this who have already begun making these changes, I challenge you to look deeper and push the boundaries. For those who have not, I suggest taking small steps now to maximize your credit union’s ability to serve member needs and requests at a higher level.

As our economy continues to evolve, and as the COVID-19 crisis ends, there will be changes to how our members interact with the credit union, new opportunities to be captured, and new challenges to be tackled. Credit unions who make changes, get creative, and challenge the old way of thinking will be more agile and better equipped to find the open windows when the doors close. 

You do not need to do this alone. At SalesCU, we offer many options to support your credit union through the process of creating a value creator credit union. Check out our free webinar 4 Essential Elements to Transform Your Frontline From “Order Takers” to “Value Creators”.

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