As we all become experts at Zoom meetings and conference call protocol, when not talking into our computers or feeling stir-crazy, we certainly ask if the world will ever be the same after COVID-19.
Well, the short answer is that it won’t be the same. We all know that. Social distancing is a term that will become permanent in our lexicon, at least until the next big crisis overshadows this one.
And futurists are surely seeing great opportunity right now. We all want to know how the world will change and they will be ready to shape our thinking. We should be ready to read and ponder and strategize once the future trends driven by this pandemic become clearer.
So, I share my thoughts, first about some broad future trends, and then more specifically about credit unions and consumer finance.
Here are my Top 5 societal trends coming from the COVID-19 pandemic:
- The world will differ greatly pre-vaccine and post-vaccine. As we phase in our public and private sector “back to work” plans, all businesses and other organizations will need to have a pre-vaccine and post-vaccine mindset. This applies to every organization that gathers people, whether sports arenas, churches, businesses, restaurants, retail outlets, etc. Everyone will be affected.
Until there is a successful, broadly adopted COVID-19 vaccine, continued consideration will be given to facemasks, gloves, social spacing and frequent hand sanitizing and virus testing. For instance, Amazon has announced that it is creating a COVID-19 test for all 840,000 employees as one dramatic example of how they are looking at the pre-vaccine period.For sports arenas and concert halls to open, there will need to be seat spacing and likely continued face and hand protection protocols. One can imagine continued restrictions on meeting sizes for several months and even after restrictions are lifted, private businesses and other organizations will continue to implement these measures.
For credit unions, the pre-vaccine plan will likely include all of this. In order to protect employees and members, branches may re-open but with member spacing, encouraged facemasks, plenty of hand sanitizer and other measures. In some cases, pre-vaccine, credit unions may stick with the “appointment-only” approach, especially as members will have become accustomed to remote service delivery for all of their essential needs.
And even in a post-vaccine world, credit unions will likely significantly re-think their “brick and mortar” strategies for both retail operations and administrative centers where they feel pressures to accommodate remote work and service expectations.
- We must adopt a “never again” mindset. The public outrage regarding the abrupt and almost total economic shutdown should lead both the government and private sectors to say, “We will never let this economic pain happen again.” At least that is the logical conclusion. Sadly, logic often doesn’t drive public or private sector planning and decisioning, but it should.
Relative to a health crisis specifically, federal, state and local governments should be better prepared with essential medical gear and health care support as well as widespread testing capability. This should lessen the impact of future waves of COVID-19 or other variants of the virus. And ideally, rainy day funds should be created. Unfortunately, most of us are skeptical about the government’s ability to do this because of tax policy implications.But government preparedness will never save us from ourselves. Consumers and businesses need to be better prepared for the next crisis, whether it is health-related, terrorist-driven or related to a natural disaster. Over-borrowing and a lack of savings have always made each economic crisis far worse.
The fact is, we all need to save more, borrow more wisely and improve our disaster preparedness. This is true for consumers and small businesses and credit unions can play an important role.
For credit unions, there could be great opportunities on two fronts. First is to work as an industry to make sure that we have better programs in place to provide financial backstops for all types of lending, not just small business loans and mortgage guarantees. Our industry has long-needed a consumer loan guarantee fund especially for emergency cash loans when they are needed. With proper planning, as an industry, we can be better prepared by creating these programs. And some funding might be obtained as a preventative means from the federal government and/or private foundations.
Credit unions, like all businesses, will also need better disaster preparedness plans that are updated and tested on a regular basis.
The second great opportunity for credit unions is to promote more financial well-being programs to their members. This should include both relevant financial education content, but also incentivized savings plans like CUSG’s “Save to Win” prize-linked savings program. Consumers need to be urged to prepare more effectively to have at least 6 months of living expenses in a savings account. These are not new concepts, but they are more relevant than ever. Credit unions can also expand their financial counseling services to include smart debt management. This is especially true for more financially challenged members.
And related to both opportunities, credit unions need to mobilize to have emergency, short-term loans (aka payday alternative loans) expanded and available for members as needed.
Helping members with food storage and disaster planning could also be an opportunity that helps insulate members from panic and financial stress.
- Remote work is here to stay. Much like all businesses, CU Solutions Group has learned a lot about how we can function and prosper as a business, even with remote workers. The technology tools have been in place for a long time. Cloud-based file sharing, video conference call capabilities, collaborative file sharing, and remote sales demonstrations are all being universally used now out of necessity.
As such, like many businesses, we are re-thinking our need for physical facilities. Remote work is here to stay, but applied much more broadly than we ever anticipated. We plan to significantly downsize our physical office space and expand our remote work opportunities for staff.This will put tremendous pressure on the commercial real estate market and for those who finance it. It will also create huge opportunities for businesses like Microsoft, Zoom and others who enable these technologies to help with effective remote work processes.
For credit unions, there are two broad implications, one for employees and one for members. For employees, this just means that the workforce will increasingly demand the option of remote work. And in the competition for talent, credit unions will need to accommodate this. It creates a win-win obviously for employees and for the credit union with the cost-savings generated.
Of course, the legacy costs associated with brick and mortar will create a challenging dynamic. This is nothing new. It has just been accelerated. And for administrative center decisions, credit unions may want to pare back their space planning in order to accommodate this new reality.
On the member side, the good news is that they will not only be more receptive to remote service delivery, they will actually demand it. What used to be a competitive concern for serving millennials will now become the new normal for virtually all consumers. They will demand seamless omnichannel service delivery through mobile, call centers, ATM and ITM technology and remote financial counseling. Even technology that enables remote management of drive-thru lanes will become the new normal.
Consider the way that Intuit has added video-based Turbotax Live service for do-it-yourself tax filers who want to speak to a CPA via video link. These advisors can take control of the consumer’s online forms and answer questions remotely without ever having to step into a CPA office. The human interaction is seamless with their software and very effective. Credit unions will need to offer similar support in remote service delivery.
- Businesses who can deliver will deliver. A fourth major trend is the forced realization of the convenience of online shopping and product delivery. Businesses who figure out how to be relevant in a home-delivery world will truly deliver. Excuse the pun.
COVID-19 forced restaurants to rush to provide take out and delivery menus where in many cases, they were unaccustomed to doing so. Companies like Grubhub will be more popular than ever. But the increased relevance and acceptance of grocery delivery, wine delivery and the continued trend of online retail buying and delivery are all here to stay. So, consider buying stock in companies like Amazon, UPS and Grubhub in the new economy.This has likewise accelerated the attractiveness of remote car buying and remote research and purchase of other big-ticket items. Consumers now expect everything to be conveniently purchased online and delivered to their doorstep.
The implications for credit unions will include the need to understand how their credit and debit cards can stay relevant and top of mind in this environment. Again, it isn’t a new trend, awareness and acceptance of online buying has just been greatly expanded. Credit unions might revisit how their mobile banking apps can help facilitate these consumer demanded features.
For the bread and butter loan business of credit unions in financing mortgage loans and vehicle loans, credit unions will need to adapt here as well. Car buying services like Carvana will displace or diminish more traditional indirect lending programs and credit unions should expand partnerships to assist members with these providers.
For home buying and financing, the key emphasis will be on speed and remote processing of loans. Credit unions have been forced to become expert at this with improved processes for appraisals, home inspections and document processing. Consumers will expect and demand speed and remote delivery more than ever.
- Human touch will be craved but generationally, it may diminish. With all the unknowns associated with life after COVID-19, one has to wonder about the basic human need for social and networking contact. In the short-term, this will be craved as we come out of the long home quarantine period. This should make concerts, festivals, and conventions even more attractive as long as proper social distancing measures are followed.
But as the next generation is increasingly fed by remote college courses, online gaming, the proliferance of on-demand entertainment options and all of the home delivery options, we have to wonder how dramatically society will change in the future.We will likely always have different personality types who require more or less human touch. The differences between extroverts and introverts will always exist. But one has to wonder about the effects of a society that becomes increasingly automated and detached from human interaction. The COVID-19 pandemic seems to drive this even further.
For credit unions, one of their great differentiators has always been human touch. As humans, we will always desire this and expect it. But it will likely come in different forms as a result of these trends.
Members’ relationship with their credit union and their human touch experience will likely come more and more through Zoom-like video interactions and phone calls where member service excels. Staff service training for phone and video service will become more important than ever.
And whether service is provided by a mobile chatbot, via phone support or from a video link like Intuit’s Turbotax Live feature, the key will be the speed with which and the care with which essential service needs are met in the credit union spirit of people helping people.
As credit union leaders consider these trends, the one universal truth is that our world will never be the same after the COVID-19 pandemic. But every world crisis has driven changes, most positive and negative. Our responsibility as leaders is to understand the trends and to position for a new world. In doing so, there are lots of service opportunities for credit unions.