3 ways to help your members (and prevent delinquency) before they know they need it

“There is no greater loan than a sympathetic ear.” – Frank Tyger

With many credit unions closing their lobbies and opting for drive-thru transactions and electronic servicing to practice safe social distancing, remember that this is a great opportunity to deepen relationships and increase member loyalty through proactive advising and empathy.  Many members are facing uncertainty with work, finances, and health. Now is the time they need an advisor or financial mentor the most. Being proactive with calling efforts to reach members before their financial bump becomes a financial hurdle can pay dividends not just for the member but for the credit union.

Below are some tips on providing next-level member service and how it can positively impact your financial outlook for 2020.

  • Email Messaging. Many members will be looking at hurdles or financial struggles in the coming months. One of the worst things that can happen is feeling helpless or alone through trying times. Craft a message to your members expressing the desire to help them through these tough times with empathy and no judgement. Give them viable methods to reach out to your team to discuss their unique financial situation and options they can consider to be best for them. The majority of your membership want to make good, on-time payments and the worst thing that can happen is for them to try to manage their credit, bills, and obligations without an understanding of what the best path is through burdens outside their control.
  • Loan Closing. Upon loan closings, your team should inform the member that the relationship goes much further than just signing the documents. Explain to the member how the credit union team is there to help in any instance. If there is ever a thought that a late payment might be made, the member should contact a representative immediately to begin looking at options to protect their credit score, payment history, and help them face the problem. A credit union can do much more in 30 days leading up to a missed payment than 30 days after. Help the member to understand this and it will lead to increased communication and deeper relationships.
  • Short-term Late Payments. Take a look each day at loans 5-20 days past due. Reach out to these members to discuss how you can help. Many of these members may not visit a branch often and do not have a current relationship with any teammates as they are mostly serviced online. Some of these late payments may be due to memory lapse or a minor mismanagement of funds but you won’t know unless you ask. For some, this may be the first sign that they are experiencing financial hardship. This is a great opportunity to prevent a future credit history problem for the member and avoid a collection account for the credit union.
  • Daily NSF Reports. Instruct your branch leadership review the NSF or overdraft activity at the start of each day to find members who may need help. Of course, some of the overdrafts may be payments at other institutions or various bills elsewhere. You may find opportunities to help still depending on what they are paying and what their income situation is like currently. If the member is overwhelmed by the payment sizes due to a reduced income, branch leadership can look at what options the credit union may have available to refinance, consolidate, or lower those payments to keep the members credit history intact. Proactive calling, building the relationship, and being the advisor when needed can help increase that member’s loyalty towards this credit union now and in the future.

Each member’s situation is unique and needs to be treated as such. Due to this, it is of utmost importance to express empathy for what the member is experiencing.  Your team may just be the only one willing to help. It’s up to your team to be proactive and help the members.

Adam is a Relationship Development Leader at YMC with a diverse background in the financial industry. Having lead teams at several financial institutions, Adam got the opportunity to see how credit union marketing directly impacts the members it’s designed to serve. Got an idea you want to share with him? Contact him at adam@yourmarketingco.com

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