CO-OP Financial Services has released a think piece on the need for credit unions to continue to be the "compassionate banking alternative" to big banks by delivering the financial support consumers and small businesses need now and in the face of an uncertain future.
CO-OP cites three trends credit unions should address to ensure members have access to the financial tools and products they need and to demonstrate how credit unions outshine big banks:
1. Migration from debit to credit. While cash and debit cards are consumers’ preferred payment methods, there may be a significant shift to credit over the coming weeks. In response, credit unions should reach out to their credit cardholders with special offers.
2. Forward-facing risk mitigation. Prepare now for the increased risk of payments delinquency and fraud, balancing fraud mitigation avoiding spikes in unnecessary declines and ensuring cardholders have access to their funds.
Closely monitor fraud at the transaction level while levering tools to minimize payment fraud losses.
3. Digital payment adoption. Digital payment adoption will likely grow exponentially over the coming months. Credit unions should use this opportunity to bolster their digital payment options.
“While COVID-19’s long-term economic impact remains unknown, a credit union’s payments portfolio is a powerful means of maintaining regular interaction with and support for its members,” the report concludes. “As big banks continue to put profits before people, credit unions have an opportunity to demonstrate their strengths.
“Modifying their payments strategy to deliver continuity and financial relief will help credit unions maximize the benefit to their members and, in turn, increase loyalty.”
CO-OP Financial Services is a CUNA Associate Business Member at the elite level.