Relevance Strategies in 'The New Normal': A Generational Opportunity for Local FIs
Businesses large and small are reacting to the instant, crippling loss of revenue with sweeping layoffs. That’s why (unsurprisingly) last week we saw nearly 3.3 million people applying for unemployment. Last night saw the passage of a 2 trillion dollar stimulus package that will send cash directly to consumers over the next 3-16 weeks which is expected to pass in the house on Friday.
We’ve been watching this conversation around the stimulus and the problems it highlights. Such as how to distribute hundreds of BILLIONS of dollars to hundreds of millions of consumers all over the country quickly and efficiently? On the one hand, a digital coin could be distributed overnight and fundamentally disrupt the financial services industry. On the other it could take nearly four months for some consumers.to receive funds. The Hill pointed out earlier this week the impact of the coronavirus on the 80% of Americans living paycheck to paycheck and the 40% of Americans who can’t manage an expected expense of $1,000. This gap is significant, and, in light of either 3 or 16 , that $2,400 won’t go too far.
We’ve been watching (and writing about) the storms rapidly forming on the horizon for the benefit of our clients who have been focused on battening down the hatches. DaLand’s conviction is that both present a tremendous opportunity for local FIs that have committed to data centralization and modern core banking technologies. For example, using your core data to make short-term small dollar loan decisions for your community. Doing so will keep the costs down for your institution and will ensure your members/community aren't paying the price by trying to find bridge funds and payday loans elsewhere.
Other options are what some of our clients have deployed. Like Blue FCU has done to re-purpose their Holiday loan tech. Or how Linn Area has adjusted the parameters on their skip-pay tech. Nutmeg has moved their branches to appointment only and has pointed their core driven appointment scheduler to ensure that they are able to serve their members while remaining aligned with government mandates. All of these example CUs used core data to make those financial decisions for members at a very low decision cost.
This illustrates that credit unions must be nimble in order to remain relevant through their connection to their community and consumers. Credit unions are nimble when they control their data. When credit unions are nimble they are able to deliver the services that are most valuable to their members, regardless of how unprecedented the circumstances might be.
Amid the frenzy are opportunities for your CU and the community of FIs to meet their membership and local economies with products, services, solutions, and experiences relevant to rapidly shifting conditions.