With the growing number of fintech companies entering the marketplace, traditional service providers are upping their game to improve the banking experience. As a result, consumers have a lot more choices when it comes to accessing financial services. Whether they expect the ease and speed of 24-7 access provided by the latest mobile banking options or rely on face-to-face interaction with financial services experts to help them navigate their financial security, market forces have changed the industry environment to meet changing demands.
But no matter where your members fall on the service expectation spectrum, there is broad agreement regarding their priorities when choosing a financial services provider:
- convenient, reliable services that help them effectively complete financial transactions;
- full transparency regarding product benefits and user responsibilities;
- no surprises when it comes to program parameters or costs;
- clear, consistent communication regarding their account status; and
- advice on how to maintain financial security.
This is especially true when it comes to protecting themselves and their families from the negative consequences that result from a financial shortfall — caused by an unexpected expense or an error in keeping track of their account balance.
Even as we are in the midst of the longest economic expansion in our history, about 40 percent of Americans say they are struggling to pay their bills. So, while the overall economy looks strong, one unexpected expense — such as a medical emergency or car accident — can diminish financial security or lead to bankruptcy for many families and individuals.
Choose to make a difference
You can make a positive impact for your members who find themselves in a difficult financial situation by providing a consumer-focused overdraft strategy that meets all regulatory guidelines and best practices.
In a letter to the Consumer Financial Protection Bureau (CFPB) earlier this month, The National Association of Federally-Insured Credit Unions (NAFCU) reiterated its support for credit unions’ use of responsible overdraft programs as valuable service options for consumers. In response to the CFPB’s planned review of the overdraft rule, under the Regulatory Flexibility Act, NAFCU asked that “the review consider not just the cost of participation in overdraft programs, but also consumer benefits — many which are associated with credit unions’ approach to member service — to correct assumptions regarding the value of overdraft products and consumer preferences.”
As the NAFCU continues to work with the CFPB to provide regulatory relief for credit unions, it continues to defend the use of overdraft services that are coupled with free financial education and counseling to ensure credit union members are informed about the benefits and uses of such options.
Make the socially responsible choice
A fully transparent overdraft service — with established limits, reasonable fees and easy-to-understand, on-going communications and advice — provides a hassle-free solution for all eligible members who occasionally overdraw their account. There’s no guesswork regarding their overdraft limit, once it is established, and no confusing formula that can arbitrarily change the limit when it might be needed the most.
And, when this service is coupled with financial counseling and recommendations about other product options that address individual needs, all members can benefit from more personal financial peace of mind.
The right choice provides superior support and long-term success
If you want to ensure your existing overdraft strategy is providing the best choice for your members and best results for your credit union, make sure the options you are considering provide the following additional benefits:
- core compatibility for easy installation;
- best-in-class software for improved tracking and reporting of key data;
- access to cloud technology that includes text and email capabilities;
- increased automation for improved efficiency and flexibility;
- advanced analytics to gauge program usage and identify areas for improved results;
- comprehensive consulting and on-going program monitoring and maintenance;
- 100% written compliance guarantee for greater regulatory peace of mind;
- access to exclusive training and education opportunities that increase employee knowledge and confidence;
- reliable member communication support; and
- measurable results.
When your members need assistance to make ends meet, they shouldn’t have to turn to products that are unclear or that could make their financial situation more difficult. Implementing a fully disclosed overdraft solution that addresses members’ needs and protects your credit union from regulatory scrutiny — while providing an opportunity to increase revenue is the responsible choice.
What’s more, a service that includes innovative, next generation features and real-time updates provides the tools your employees need to confidently provide superior value and stay one step ahead of any changes in regulations, technology or member service issues.
Overcome the status quo to establish a clear choice
When it comes to providing a service to address occasional financial shortfalls, are you choosing to implement an easy-to-use, responsible solution that will benefit your members and your institution? Or are you holding on to an outdated or obsolete program that lacks the opportunity for improved service and performance results?
It boils down to this: Consumers are more likely to choose a financial institution that has their back and offers user-friendly, reliable services and programs that help them maintain financial stability. It’s up to you to simplify their choice with a fully disclosed overdraft solution that takes their financial security to the next level.