Leveraging Credit Union Data to Help Your Community During COVID-19

leverage CU data

Community financial institutions are at the heart of our society and have been known to lend a helping hand, but because of the economic hit from COVID-19, they may be struggling to keep up, or uncertain of specific ways they can help. Although times are difficult, community credit unions are in a great position to help their small business and retail members — these are the times when members need them most.

Credit unions can best provide relief to Americans by leveraging their data to help their community. We want to better enable credit unions to solve problems for their members — now is the time to really focus on member data. In this post we will explore the proactive steps being taken by financial institutions along with some tips and data-driven advice to inspire and guide you moving forward. 

Our clients have shared with us the ways they have been tackling these problems, like deferring loan payments and waiving service charges and fees. We are so glad to see these institutions serve their communities in this way. In addition, FI Works has identified opportunities on behalf of credit unions that will alleviate the challenges that local businesses and retail members are currently facing and help prepare your institution in the future.

Digital Channels

Members that are already using digital channels are going to have a much easier time getting access to financial services during this crisis. It’s clear that financial institutions and their members will need to continue to adopt more modern digital platforms. But in most typical financial institutions, only 20-30% of members use digital services today. Now may be a good opportunity to encourage non-digital customers to consider the digital services you already provide. You can do things like:

  • Convert members to online & mobile by targeting the ones that are likely to need these services
  • Move members that use paper deposits to remote deposit capture
  • Transition members with paper statements to e-statements

Tip: Be selective in which kinds of members you target and how you reach out to them — everyone is being bombarded with emails and other messaging right now.

Tip: Keep in mind that you will still have members that do not want or need digital services. For example, a single-service member with one CD is unlikely to need online/mobile — don’t push it on them.

Lending

Loan modification programs are clearly at the top of the list for many institutions right now. Some of the common ideas include:

  • Deferring loan payments
  • Reducing or waiving late fees
  • Reviewing existing lines of credit

Of course, it is up to your institution to know when and how this kind of aid ends.

Tip: Consider using your deposit transaction data to monitor the financial health of these loan members.

Deposit Members

Banks have been creative in helping their deposit members through: 

  • Reducing or waiving OD/NSF fees
  • Lessening overdraft fees and service charges
  • Waiving early withdrawal fees for CDs

But again, the question is who needs this help and how do you find them? 

Small Business Lending

According to the last census, small businesses account for almost 50% of jobs in the US. The $2 trillion stimulus package that just passed Congress will allocate roughly $350 billion to guarantee loans for small businesses. If your credit union already provides SBA loans, this could have the biggest impact on your community. Then you can look for other small businesses in your market that need SBA loans as well. 

Tip: You can use business prospect lists to find small businesses that may have been impacted by the crisis by using industry codes and revenue ranges. 

Tip: When it comes to small business members you already have, you can use targeting and data to see which ones do not have existing loans and offer them.  

Tip: If you want to help your retail members, sometimes that means helping the small businesses who aren’t your current members that employ them. 

Our Advice

We wanted to take this opportunity to guide you in using data to be more efficient at reaching your members. Whether you’re an institution that has quickly mobilized by using your data and marketing team to help out or are still wondering what you can do, here’s a few essential ways to go above and beyond:

Utilize Your Data 

Your institution has lots of data, and you can leverage it to effectively help members out. Using analytics, you can determine which members your institution should reach out to and why.

Tip: Use member segmentation to identify groups of members (like small businesses) that are likely to need help. 

Tip: You can use third-party demographic data to identify your small business members by revenue range or number of employees.

Tip: Go one step further by using industry codes like NAICS to find those that are in hard-hit industries.

You can also target restaurants and retail businesses to pinpoint members that need help by analyzing their deposit trends. Targeting can also help decide the kinds of members to extend certain courtesies to, like waiving service charges for those that need it (and minimizing lost fee income at the same time). Wouldn’t it be great to know that a certain percentage of your members are small businesses that have annual revenue under 1 million? Understanding your data gives you the knowledge you need to better serve them when they need it most.

Tip: Target the people who actually need your help. Use historical data that you already have to make the decision of who may need aid.

Consider your channels

Your members are being bombarded with emails concerning the virus — carefully consider what meaning your email has to them, and if it’s just noise. Sending them a very generalized email may not be the best way to stand out. Using targeting creates a more personalized, relevant message because you know what kind of help they need. 

Yet, the average community financial institution has less than half of their member’s email addresses. How can you connect with them?

Tip: Use email addresses from multiple applications, not just your core system. The most accurate email addresses are those that are required to be valid in order to have certain services, like e-statements, mobile and online apps. 

Don’t forget that direct mail still works — and now that many people are at home, what better way to reach them? It will stand out, it can be more effective then email, and it doesn’t have to be too expensive.

Tip: Use targeting to discover the right people to mail to — this will scale down your mailing list and therefore save you money and time!

Remember that you can still utilize your retail staff! You can use data to drive new conversations because data can show who needs your help, and an added bonus if you’re able to track which of your staff has spoken with certain members about different topics in the past.

Be Proactive

Proactively reach out to your members, don’t wait for them to call on you. Other institutions are reaching out to them — do they know that you could help them too? Using the data and targeting practices we mentioned before, you can stand out to your members by fulfilling their needs without them having to ask. 

Be Prepared 

If you don’t currently have the data or capabilities to leverage your data now, then consider getting to that point before the next crisis arises. The end of the current pandemic is not the end of your member’s financial problems. Decide the course of action you will take when this type of issue happens again. 

Tip: What can you do for your members to help them be prepared for their next financial crisis? You can plan out ways to educate and prepare them for the future. Preventative measures will help assure them that you have their back. 

What Community Relationships Are All About

Taking these steps will show your community that you stand by it through everything. Additionally, it will improve retention, you’ll acquire new business relationships, increase usage of sticky services, promote your brand, and give aid to the local workforce by helping local businesses stay afloat. Using data, community credit unions can use this opportunity to show members, businesses, and their community what relationships are all about. When all is said and done, the people you were there for will remember. 

To empower credit unions and communities in this crisis, we are waiving our implementation fee for community credit unions so they can access their data and swiftly utilize it to reach the struggling small businesses and consumers. 

FI Works is a complete sales and marketing platform designed for community financial institutions. We help harness financial institution data and make it accessible, driving smarter and more effective marketing campaigns that result in growth, efficiency, and better relationships. If you need help using your data to aid your members, contact us. We are here for you!

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