Over the past several months, I've had the opportunity to speak with several leaders in the consumer credit and collections industry. In addition, I've scoured the 2021 TransUnion Consumer Credit Fore...
Many financial institutions—particularly credit unions and community banks—put member service and customer relationships above all else, including technological advances. Think about it: our credit union brethren are typically last to adopt the latest and greatest in banking technology—ATMs, online banking, mobile deposits, etc. The reasons why are simple. When your first priority is personalized customer service, you want your customers to experience one-on-one human interaction with your institution. And it's no wonder when according to Zendesk, 79% of consumers prefer to speak to a customer service representative on the phone.
Historically, community banks have viewed technological advances with skepticism and have hesitated to adopt new technology because it could potentially take away from the personal relationships they have developed with their customers, diminishing that personal service they pride themselves on providing.
And then of course, there is the associated cost that is often a deterrent. Adding technological advances to day-to-day business operations not only requires an initial infrastructure investment, but it also requires an investment of employee time to integrate the technology and master the system.
It Doesn't Have to Be All or Nothing
What community banks and credit unions should steer clear of is an "all or nothing" school of thought. When it comes to customer service and advanced technology, it doesn't have to be one or the other. You can (and should) provide your customers with convenient, efficient, self-serve options, but investing in these options does not exclude you from providing exceptional customer service. In many cases, improving technology can ultimately improve service. The bottom line is, credit unions and community banks continuously fall behind the technology curve when compared to their larger bank counterparts, making it that much more difficult to compete, particularly with younger, Gen Y consumers.
Your customers not only feel the impact of technology on the consumer-facing end (think online and mobile banking), but also on the back end. For example, if your collections or payment processing system is fragmented or slow, your borrowers will definitely notice that it takes several days for their payments to post to their account, or that they're getting collections calls because your archaic system has mistakenly flagged their account as delinquent. Before the technology gap between your smaller- to mid-sized institution and the big bank down the street gets too wide, it's time to start putting an investment in technology higher on your institution's priority list.
Take Service to the Next Level
Investing in technology also gives your employees the ability to take customer service to the next level. When streamlined and efficient technology is introduced to your institution's operations, it gives your employees the ability to operate in a proactive, rather than reactive, manner. When your employees aren't spending the bulk of their time engaged in "tasks" such as calling delinquent borrowers, communicating with multiple vendors to place an assignment out for repossession, skip tracing or remarketing; physically mailing letters and compliance documents, etc., they can focus on addressing customer needs.
Efficient systems give your employees the opportunity to chat with your customers, and these conversations lead to discoveries like the announcement of a new marriage, baby, job promotion, or inheritance—life events that give you the opportunity to improve product penetration and deepen that relationship. Taking advantage of technology can help your institution streamline your processes, making you more efficient—all of which improve service.
Customer loyalty is also a result of improved service through technology. Offering your customers a plethora of products and services as well as convenient banking and payment options makes it that much more difficult for them to "break up" with your institution. Your institution can build customer loyalty through technology by:
- Offering an automated phone system
- Providing multiple payment options via multiple channels
- Ensuring your website is user-friendly and easy to navigate
- Meeting your customers where they are—on social media—to field questions, provide valuable information, and more
While taking the leap into improved technology can be overwhelming—and in some cases, expensive—the opportunity cost must be weighed. With the amount of competition in the marketplace from large institutions and other financial service providers, providing customers with convenient payment and banking options is no longer optional. Furthermore, you can ultimately accomplish the goal of improved service through technology upgrades and integration.
Karen Townsend is the Director of Product Sales for SWBC and possesses an extensive history in the auto finance industry, specifically within the repossession and remarketing arena. She has led operational teams at a senior level and has also been on the sales side of the house, working directly with clients to help them navigate through their loss mitigation needs. Having been a client herself, Karen brought a unique perspective to her previous position as SWBC's Loss Mitigation Program Manager, giving her the ability to deliver insights from an operational and functional point of view. She is dedicated to the highest levels of customer service and to delivering client solutions that offer the most streamlined, efficient, and effective solutions available. Karen holds a master’s degree in organizational leadership with an emphasis on strategic innovation and change management from Colorado State University and a bachelor’s degree in organization development from Regis University.