The coronavirus pandemic has disrupted all of our lives in one way or another. Banks and credit unions have felt the strain to continue to provide the same level of customer service while maintaining the safety of their staff, members and customers. In addition, maintaining revenue while assisting those that may not be able to make loan payments and creating a plan to help them recover successfully.
Despite uncertain times, financial institutions have several opportunities before them, including:
- Learning lessons from past economic downturns
- Being more proactive about digital banking, digital lending and online account opening
- Providing personal loans to those who’ve been laid off or struggling financially
- Providing small business loans to entrepreneurs who’ve lost business
- Building goodwill during a time of crisis.
For financial institutions to be successful doing so, adopting proper banking software and technology are invaluable. MeridianLink provides a number of technological solutions that can help banks and credit unions be successful, including:
- XpressAccounts, online account opening software
- LoansPQ, our popular product and one of the top loan origination system in the market
- Application Portal, our digital lending and account origination platform
- LendingQB, industry’s top mortgage origination software
- And our collections software, XpressCollect
To learn more about how digital lending technology helps financial institutions provide value to their consumers no matter the situation, connect with the MeridianLink team today.
How COVID-19 is Affecting Banks and Credit Unions
By now it goes without saying that the cultural and economic disruptions of the coronavirus pandemic are affecting all of us somehow or another. Financial institutions are no exception. But there is opportunity to pivot, grow and recover. Financial institutes have been through economic hardships before, although the cause of past economic downturns may have been different, there are lessons to be learned. If there was ever a time to invest in a strong digital lending and banking software, it’s now.
What Can We Learn From History
In 2008, the economy came crashing down. This downfall left people out of work, behind on their payments and caused many businesses to close. Although the cause of the current economic crisis is vastly different than the one 2008, there are several items that should be noted regarding how financial institutions faired in that time and recovered.
Smaller financial institutions who served a regional population, were able to pivot and make changes that were tailored to the needs of their specific demographic. On the contrary, when the giants of the banking industry made changes they only benefited a small portion of their consumers, as they are dispersed around the country. Credit unions and regional banks are at an advantage in this area, they can make decisions and changes based on the majority of their consumers’ needs and continue to be a community asset and provide superior service.
One eye opening factor that we can take note of from The Great Recession is that it revealed new competitors in the banking industry. These non-traditional lenders built their businesses on a digital banking and online lending foundation. Those competitors presented attractive and easy digital lending options for consumers. Additionally, these non-traditional lenders had reduced spend on staff and typically did not have physical branches allowing them to keep costs down. It seems that every crisis points to the importance of having digital lending and online account opening services available for members and customers.
Past recessions also show us that short-term credit is the first to bounce back, financial institutions should be mindful of this as they prepare for the future. Ensuring that they have options available online and can easily accommodate this demand.
Digital Banking on the Rise?
Unlike 2008, when digital lending was far fetched for many financial institutions, it is very much attainable today. After all, in an era of self-quarantine and social distancing, fewer consumers are going to be willing to visit a physician branch. But many still need banking services, which can be easily and securely offered on a desktop computer, tablet or mobile device from the safety of ones home.
This is the time for financial institutions to invest in a digital solution for digital lending and online account opening.
Such software will provide the technological interface that financial institutions need to serve their consumers remotely, and to be able to promote their service offerings and grow volume even when people aren’t popping into the branch like normal.
What About Personal Loans?
Something else to think about is that, in the COVID-19 era, many individuals may need help financially recovering and will be seeking short-term loan options.
Again, the way to prepare for this, and to capitalize on it, is to have a digital lending solution. As most of the loan research will be done online. Be ready to serve your clients, and expand your loan application volume, even through times of crisis. Start by putting an online loan origination system into place.
Building Goodwill in a Time of Uncertainty
Another point for financial institutions to consider is that, during this time of hardship, there are opportunities to help, serve, and offer a sense of steadiness to those undergoing affliction.
And there could be some business benefits to doing so, if not now then later.
Indeed, financial institutions that step up and help people going through disruptions may engender a lot of goodwill and loyalty. And that can yield some long-term customers or members… gains that may not be evident right away but will be most welcome down the road.
There’s no sense in which the coronavirus could ever be considered a positive.
But financial institutions can make the most of things, and seek every opportunity not only to be helpful, but to innovate new ways of providing their services. Such creative thinking may be valuable long after the pandemic is over, and life resumes some semblance of normalcy.
As you think about creative solutions for your financial institution, we encourage you to explore all the avenues that technology opens up. Contact us today to learn more or download the following ebook on optimizing your digital banking strategy.