The future of credit will be digitized
If there was still a question of the digital revolution in financial services being upon us, the world-changing events of 2020 have removed all doubts.
The coronavirus (COVID-19) highlighted several challenges facing credit unions, including the urgent need to provide employees with the ability to work remotely while continuing to serve their members.
For example, I work closely with a mid-sized credit union in the Southeastern United States. In March 2020, this cooperative redeployed all headquarters employees, except 8%, to work from home. The credit union was forced to quickly switch to remote work for virtually every role, including business and personal loan officers, who for the first time had to figure out how to interact with borrowers in a fully-fledged environment. virtual.
With that experience in the rearview mirror, credit unions must prioritize their employees’ abilities to securely access essential data and software needed to meet member needs, anywhere, anytime.
Compelling use cases for digitization
When my wife and I applied for a new personal mortgage last year, we noticed a distinct difference between working with our local credit union and with one of the more famous “big banks”. Although we wanted to get our loan through the credit union, the application process was awkward and confusing, marked by very manual processes, wet signature requirements, and in-person document exchanges. On the other hand, our experience with the bank was a breath of fresh air. The process was quick and all steps from application to approval to closure were completed through a secure digital platform.
In commercial lending, the experiences of lenders with Payroll Protection Program (PPP) were also revealing. Credit unions that quickly implemented cloud-based digital processes to accept PPP applications, grant approvals, and provide financing to businesses have proven to be essential in helping these businesses keep their doors open. Credit unions have also helped save tens of thousands of jobs while gaining new, grateful and loyal business relationships.
The result: Institutions that have figured out how to digitize their lending processes are creating faster, more streamlined, and better borrowing experiences.
Go digital to be competitive
Post-pandemic guiding principles for smart financial institutions include: a cohesive view of evolving risk, the ability to deliver an exceptional member experience, and a commitment to continuous and iterative development.
Digitization is the common element of the three fundamental principles. By digitizing manual processes and moving them to the cloud, credit unions can successfully reduce costs, improve efficiency and productivity, and create a better experience for members. In addition, digitization can improve agility and speed to market, allowing credit unions to compete with even the largest banks and maintain their relationships with their members for the long term.
To get a head start on the digital journey, find a partner supplier with a proven solution. Now more than ever, credit unions need to engage trusted partners who are already on the road to guide them through their digital journey.
ROBBY HOLDITCH is director of the risk and accounting group at Moody’s Analytics.