Posted by MeridianLink | May 4, 2020

Strategies for Community Banks & Credit Unions Through the Pandemic

During these unprecedented times, consumers are looking for leadership, service and stability. Community banks and credit unions are in a prime position to offer all three, simultaneously. enhancing business continuity and fostering goodwill throughout the community.

How does a bank or credit union act now and plan for later in the midst of the coronavirus pandemic, an event that’s fundamentally unpredictable? The situation is fluid and the future is wildly uncertain. The actions taken by banks and credit unions will have a significant impact on consumers, businesses, employees, and the economy overall.

Already, we have seen some acute effects of the pandemic and the associated quarantining. Banks and credit unions can expect further, long-tail effects down the road, including lasting changes to consumer behavior. For example, many of us have already adapted our lives to make better use of video conferencing and other digital technologies. Many banking customers have taken to online banking, including digital lending platforms. There is no reason to think the convenience of these platforms will be abandoned even once the economy reopens and the quarantine is over.

While it’s impossible to predict the exact ways in which consumer banking behaviors will change, there are certainly some steps banks can take now to ensure the best possible outcomes for themselves, their customers, their communities, and the economy as a whole. Now is the time for consumer banking leaders to show real leadership and vision. The question is how.

How Banks Can Ensure Business Continuity

First, banks and credit unions must be prepared to implement flexible, dynamic operational models, allowing them to provide as much business continuity as possible for consumers, stakeholders, and employees.

This means protecting their team members, helping branches remain operational, and creating a supportive framework for remote working. Let’s look at each of these steps in additional detail.

Protect Employees

There are a number of clear ways in which banks and credit unions can protect their employees… and indeed, most have already undertaken some of these steps. Examples include providing employees with the supplies they need, such as thermometers, masks, and hand sanitizers. Changing workflows and office layouts to maximize social distancing is another important step. And of course, some banks and credit unions may wish to limit the hours of operation within physical branches.

Regular disinfection and sanitization should be another big priority in physical banking locations.

Help Branches Remain Open

By now, most banks and credit unions have realized the necessity of remaining adaptable, keeping an eye on the news on the ground, and limiting or adapting their hours of operation as needed.

Financial institutions can also consider ways to change their staffing arrangements; for example, a certain number of employees may work from home while others take shifts at a physical branch.

Banks and credit unions can also limit customer flow into their buildings, including provisions that encourage appointments whenever possible.

Appointment banking is also an option in some cases, setting a specific time to limit both customer contact and waiting times. Appointments can helpful for some more complex transactions like mortgage origination, commercial loans, and other business banking.

Provide a Remote Working Framework

While some employees may love the convenience of getting to work from home, the reality is that remote working can be challenging in a number of ways. Bank leaders and managers should look for ways to ease the burden on their employees, and to create an environment in which remote work is better supported. A few general strategies include:

  • More emphasis on cross-training employees to carry out different functions
  • Providing employees with the tech setups they need for efficient remote work (including collection software, back-end access to the loan origination system and online account opening workflows, etc.)
  • Conducting targeted analytics to determine changes in call volumes

The Need to Create a Nurturing Culture

Another consideration for banks and credit unions is that, in these trying times, employee morale is likely to take a hit. Many employees may fear for their jobs. Others will worry about a recession, even an economic depression. And still others may simply feel the acute sense of anxiety that’s in the air.

While bank leaders and managers can’t be expected to totally erase all of these concerns, they can foster workplace environments in which employees feel supported, and where morale is sustained as much as possible.

There are a few steps banking leaders and managers might take in this direction:

  • Provide a clear sense of direction to employees. As team members work in relative isolation from one another, make sure to provide clear guidelines and set some common goals. Check in regularly via video conferences to remind everyone of the common goals, and to encourage some team unity.
  • Delegate more responsibility to employees. Make clear that you trust them to take some initiative and make decisions on their own.
  • Provide motivation as best you can, whether through rewards or simply through regular words of affirmation and appreciation.
  • Make sure to plan some virtual hangouts and happy hours in which employees can reconnect and socialize a little bit. This is essential for team morale.
  • While leaders and managers don’t want to offer false hope, or to paint too rosy a picture, they can share success stories and good news as it happens. Let this be an encouragement to your employees!

Serving Customers in a Scary Season

The coronavirus pandemic, and its attending social distancing guidelines, represent new territory for all of us. With that said, consumers still have banking needs, and many of them will look to their banks for some sense of normalcy. After all, banks and credit unions tend to be seen as trusted community institutions.

Let Customers Know You Care

Unlike the financial crisis of 2008, the current economic plight isn’t something that banks are getting blamed for; in the interest of keeping it that way, make sure you prove to your community that your institution is doing everything possible to provide customers with clarity and support.

Specifically, consider these strategies:

  • Provide payment holidays and temporary relief. Acknowledge that many consumers are experiencing extraordinary financial stress and anxiety. Delivering even temporary relief from scheduled payments can be a huge boon to those who are facing lost employment, reduced paychecks, or diminished hours.
  • Offer resources, financial fitness tools, and help lines that your consumers can access to help diagnose their financial health and make informed decisions about the near future.
  • If your bank or credit union is participating in government relief programs or can offer any assistance applying for federal-level loans, make sure your consumers know it. Promote these programs through social media, email newsletters, etc.
  • Make it easy for current customers to do more business with your institution. Almost every bank and credit union has an online and mobile banking app for customers. But many online banking apps don’t offer much capability to easily open new accounts (CD, HSA, etc.) or apply for loans directly from the app. That’s a solvable problem from companies like MeridianLink, which easily integrates those capabilities into most online/home banking apps.
  • Also make it easy for new business and personal banking customers to bring their business to your institution. Fully automated, touch-free online account opening software and digital loan origination systems provide critical engagement channels to onboard customers and make loans. Most community institutions do not currently provide a full suite of online account opening and loan origination for business and personal customers. The time to really become a digital bank is now, without any gaps or compromises.
  • Keep customers engaged through social media, SMS, email newsletters, and other digital platforms. Encourage them to migrate their financial activities to digital platforms. Offer help using these digital banking and digital lending tools, as needed. And show them the benefits and conveniences of online banking.

Now is the Time for Banks & Credit Unions to Step Up

These are unprecedented times, and many consumers will be looking for guidance. Banks have an invaluable opportunity to provide that leadership; to show that they can be trusted allies through this dark season.

Follow these guidelines to exhibit that kind of leadership. With digital banking questions, reach out to MeridianLink directly.

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