CPI: How to turn criticism into convenience

CPI is a vital risk management program that involves member service interruption and has negative consumer connotation within the Credit Union community. Due to the economic and market conditions over the last 30 months, many lenders are questioning the value of CPI compared to the noise and disruption it creates for members. The borrower-benefitting economic lull of lower interest rates, increased consumer savings, diminished delinquencies, and inflated automobile values – are coming to a close. Market conditions are shifting. Rising interest rates, supply chain challenges, inflation and increasing need for repossession are putting loss mitigation and management once again into the focus for credit unions. These conditions make insurance tracking essential for protecting your portfolio.

The noise and censure surrounding collateral protection services is most often attributed to notices that are mailed due to lienholder issues and the false placement of CPI. It is critical that your CPI program reduce false placement and avoid as much noise as possible from consumers. There are several best practices to keep in mind when it comes to managing member communication and notification effectively and intentionally with your CPI program.

Website Considerations

Simplify access for borrowers to submit insurance information by adding a convenient link on your website to your borrower self-service portal.

Help borrowers navigate complicated questions related to insurance compliance by maintaining informative FAQs on your website.

Lending Staff Reminders

At loan closing, remind borrowers of insurance requirements and how to submit proof of insurance by providing stand-out items (e.g., colorful easy-to-understand info cards) amidst the other documents to be taken home.

Simplify instructions by asking borrowers to add your credit union to their policy. Ensure that you communicate this requirement without referring to words like lienholder etc. Speak to the process in layman’s terms without lending industry jargon.

Add borrower insurance information collected at loan closing to your internal loan file data.

Provide electronic communication options, like that of video, when welcoming the new loan member and advising them of what is needed to secure their proof of insurance.

Phone Menu Prompts

Make it easy to route or transfer borrowers to your CPI provider’s call center by adding the number as an extension on your phone system.

Responding to the Noise

As conditions shift, it’s important to leverage your resources and stay abreast of the tools and technology available to you to stay competitive and to improve member experience.

Borrowers are increasingly seeking digital, real-time experiences. If your CPI process is complicated and archaic (i.e., only using paper notices and manual document submission), borrowers are going to get frustrated – understandably so. This ultimately leads to a less-than-desirable member experience. It’s time to put borrowers in the driver’s seat with a user-friendly portal that can help build borrower trust and ease friction indicative of CPI. When asking borrowers to provide proof of insurance, make it easy and seamless with an online, self-service portal.

Technology, like that of a self-service portal, is crucial to responding to the noise surrounding CPI.

Borrowers require convenience especially in this on-the-fly, real-time response era we live in. A portal that offers insurance status updates, easy photo and/or document submission, a live chat feature, as well as other tools and resources including borrower FAQs is exactly what credit unions need to deliver a more client-sensitive insurance program.

Member experience is vital in this progressively competitive field, and some would argue the same for that of staff experience – effects of The Great Resignation are also still rippling. Don’t leave your associates out of this improved experience opportunity, arm your staff with the right tools to provide unrivaled client-focused engagement portal that offers:

• Real-time insurance tracking history
• Advanced and customizable reports
• Allow for the review of borrower insurance images and borrower notice images
• Ability to monitor and review member telephone and chat recordings
• Access to personalized videos, tutorial videos and documents
• Ability to file CPI claims, submit service requests, and upload supporting documentation
• The ability to check status of claims and service requests
• Integration with collection and other technology platforms

It will be critical in the next 24 months that credit unions reassess the risk management practices required in a more favorable economic market and determine the changes that will be necessary in a more challenging environment. Ensuring that your CPI Program is as advanced as your membership and their on-demand expectations will be key.

Ensuring that you are leveraging multi-channel and advanced communication and member touchpoints will be critical to a program that balances the needs of both the credit union and the client experience of their members.

Download Allied’s Q3 State of CPI Report here.