Are you struggling to pay for services to meet consumer demand during the pandemic?
Even before COVID-19 disrupted this year’s strategic plans, demand for more convenient banking services was on the rise. According to a survey by TransUnion, 61% of consumer banking transactions in 2019 were conducted on mobile phones—up from 28% in 2014. Eight months into the pandemic, the demand for safe, contactless service continues to increase.
As the 2021 planning season has begun, many credit unions are wondering how they will pay for upgrading existing capabilities or implementing new technology-driven service initiatives to meet member demand—while achieving their performance goals. And even though non-interest income sources remain limited right now, there are effective ways to offset the costs of providing the services that members have come to expect—like contactless payments, smart ATMs, remote deposit capture—and updating software to improve service functionality and efficiency.
Generate improved revenue and service results with your overdraft program
It’s true, technology and innovation will be key factors in meeting service expectations and are essential to remaining competitive in the future. But it’s imperative to make sure the services offered are designed and maintained to effectively address members’ most pressing financial needs, both now and as conditions change.
When properly managed, a high-performing overdraft program also can provide the income necessary to fund strategic initiatives to update existing systems or implement new technology to improve member service and strengthen your credit union’s bottom line. For instance, the opportunity to reinvest overdraft fee revenue can help you enhance member services with new programs—such as safe, convenient online and mobile banking capabilities—or improve the value of existing services like rewards programs. Oftentimes, this is difficult for institutions to undertake when they are struggling with income.
For best results, an overdraft strategy should be customizable to meet your credit union’s unique situation. This includes working with a provider that offers the resources necessary to strengthen any areas that may be underperforming and provides the support of industry experts who can help to strengthen improvements in revenue, member service experiences, employee knowledge and confidence, and compliance peace of mind.
Uncover savings and revenue opportunities with vendor contract negotiations
While earnings have taken a hit and interest rates have remained low since the beginning of the pandemic, expenses have increased in some unexpected places—due in part to the additional costs required to allow employees to work effectively from home and to maintain the proper precautions to keep staff and members safe in facilities that offer in-person service.
And while the outlook for how long an economic recovery will take remains uncertain, you can make a positive impact on your credit union’s immediate and long-term performance by reviewing the contract terms of the services you use every day.
Vendor contract negotiations can identify pricing strategies that result in substantial savings. Not only can this enable you to provide some top-of-the-line products to your members, it also can preserve a healthy partnership with your current vendor if you want to maintain that relationship.
Whether you have one or multiple contracts coming due for renewal, a professional assessment can really pay off. Just make sure you choose a contract professional who has a track record of negotiating five, six and even seven-figure savings for the types of contracts you are having reviewed and who knows what to ask for on your behalf. This will allow you to take advantage of effective negotiations skills without adding to the workload of your staff or taking them out of their comfort zone.
Proven revenue and cost-saving strategies bring optimism during a time of uncertainty
As we prepare for a New Year, there are many unknowns ahead. But it’s important not to delay in putting the services in place to meet members’ ongoing financial needs, if you want to maintain top-of-mind awareness in your community. But, as you know, doing so can be costly.
By implementing a fully disclosed overdraft program and taking a look deep into the cost of vendor contracts, you can find ways to pay for services that your members demand and save money at the same time. Plus, when these services are contingency-based, they can actually pay for themselves, making this a win-win proposition for credit unions that are looking for ways to recover from 2020 and prepare for the opportunities that are ahead in 2021.