Building a Digital Strategy for Post-COVID Debt Recovery

As the COVID-19 pandemic continues, some credit union relief and government support programs are due to expire – and many Americans are still struggling financially. While these short-term programs have helped, the drastic disruptions in employment and member behaviors over the last several months are creating major, lasting changes for credit unions. As members look for financial solutions and alternatives while staying safe, two of the biggest shifts are increasing call volume and website traffic, prompting credit unions to evaluate and improve their digital capabilities to meet future collections and recovery needs.

Credit unions are no strangers to helping members through difficult times. However, the impacts of the pandemic are widespread. The sheer volume of members faced with short- and long-term unemployment is daunting, and collection leaders must realistically re-forecast delinquencies and potential losses in a world with many unknowns. How many jobs will come back after temporary layoffs? How many will be affected indefinitely due to employers’ inability to survive? As these questions go unanswered, credit unions will need to focus on being agile to respond to economic uncertainties.

TransUnion predicts increases in collections and delinquency volumes through September. As current financial relief programs sunset, “lenders are going to have to see who can resume payments, who needs refinancing or modifications, and who can’t pay,” said Liz Pagel, senior vice president and Consumer Lending business leader at TransUnion, in a recent article on TheFinancialBrand.com.

Improving Digital Capabilities for Better Collection Efficiencies

To effectively address and plan for collection and recovery challenges, credit unions will need to strike a balance between using human interaction and artificial technologies to carry out member services – understanding and adapting to what members want and are willing to do remotely.

As you rethink your credit union’s long-term collections strategy, here are some suggestions for incorporating new technologies in your collections operations to assist in the overall member experience.

• Connect and engage with members on their preferred digital platforms throughout the collections process.
• Reallocate any under-utilized credit union staff and consider implementing automated solutions, such as callback assist, to prepare for increases in inbound calls in the collections department.
• Offer a seamless and secure digital platform for a member-focused collections process.
• Seriously consider outsourcing as part of your ongoing collections strategy.
• Revisit your credit union’s financial hardship policies.
• Review your credit union’s digital-led payment plans.
• Consider deploying digital self-service options for members:
  • Mobile apps
  • Automated voice trees
  • Self-service web portal
  • Virtual agents

In these unprecedented times, credit unions have an opportunity to become even more valuable to their members through personalized experiences that are digitally driven – yet still enabled by the personalized care for which credit unions are known.

By: Wendy Elieff, SVP, Client Service and Marketing, CU Recovery & The Loan Service Center

Wendy Elieff oversees the success of the Client Service and Marketing teams in CU Recovery & The Loan Service Center, a PSCU subsidiary. Wendy has worked for CU Recovery for the past 20 years. She is responsible for developing, implementing and monitoring cohesive marketing strategies to increase brand awareness. She is also responsible for building and maintaining client relationships by staying abreast of and responding to changes in the credit union marketplace.