As the COVID-19 pandemic continues, some credit union relief and government support programs are due to expire – and many Americans are still struggling financially. While these short-term programs have helped, the drastic disruptions in employment and member behaviors over the last several months are creating major, lasting changes for credit unions. As members look for financial solutions and alternatives while staying safe, two of the biggest shifts are increasing call volume and website traffic, prompting credit unions to evaluate and improve their digital capabilities to meet future collections and recovery needs.
Credit unions are no strangers to helping members through difficult times. However, the impacts of the pandemic are widespread. The sheer volume of members faced with short- and long-term unemployment is daunting, and collection leaders must realistically re-forecast delinquencies and potential losses in a world with many unknowns. How many jobs will come back after temporary layoffs? How many will be affected indefinitely due to employers’ inability to survive? As these questions go unanswered, credit unions will need to focus on being agile to respond to economic uncertainties.
TransUnion predicts increases in collections and delinquency volumes through September. As current financial relief programs sunset, “lenders are going to have to see who can resume payments, who needs refinancing or modifications, and who can’t pay,” said Liz Pagel, senior vice president and Consumer Lending business leader at TransUnion, in a recent article on TheFinancialBrand.com.
Improving Digital Capabilities for Better Collection Efficiencies
To effectively address and plan for collection and recovery challenges, credit unions will need to strike a balance between using human interaction and artificial technologies to carry out member services – understanding and adapting to what members want and are willing to do remotely.
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