In today's competitive financial landscape, credit unions are continually seeking innovative ways to attract and retain members. According to the New York Fed, the average household debt reached a 20-year record level in the second quarter of 2024. This makes loans a particularly important service to consumers who are seeking the best option to deal with their debt. As banking services become increasingly à la carte, credit unions can make their loan services stand out by highlighting their own unique advantage: the power of human connection.  

When credit unions are vying for new loan business, the conversation often revolves around rates, service quality, and community impact. While these are undoubtedly important factors, the human connection is a subtle yet more powerful differentiator that involves transparency, accessibility, and empathy.  

Consumers increasingly prefer to work with institutions with whom they share a connection. Credit unions excel in fostering these relationships by providing personalized service and understanding members' unique financial situations. This is particularly evident during challenging times, when members have trouble meeting their financial obligations. Credit unions are about building long term relationships with their members rather than making a short-term profit, leading them to work compassionately with members through this challenge. 

A successful human connection requires being proactive in all stages of the relationship. This includes taking steps to help prevent delinquencies as well as compassionately working with those who are struggling to repay their loans.

Transparency: Throughout the loan process, be certain the applicant understands all fees and rates involved as well as how to access information and updates regarding their loan.

Accessibility: Review your offerings and see if there are ways to make your loans more accessible and manageable for people with different financial needs. Consider offering financial counseling if you don’t already, and be sure members know that this option is available to them. Stay in touch with them and share targeted messages with resources that speak directly to their needs. It’s also important to meet members where and when they need you. Offering members multiple ways to reach your team (phone, email, text, etc.) is a vital part of supporting their success as well as assisting when challenges arise.

Empathy: This element is key throughout the member relationship, but it is most important when members find themselves struggling to repay their loans. Some key elements of harnessing empathy during this rocky period include:

In an era of digital banking, it's easy to forget the importance of human interaction. The principles of transparency, accessibility, and empathy support positive connections that bring strength to members and their relationship with your credit union.

To fully capitalize on this unique advantage, credit unions should consider incorporating the following strategies:  

The power of human connection is most evident when a credit union is there for members who are going through a rough stretch of their financial journey. It’s an opportunity for credit unions to embrace their unique strength and solidify their position as members’ preferred financial partner, which is an important part of long-term growth. 

At Envisant, we help credit unions deliver on the unique value of human connection in financial services. This includes our compassionate collections team that puts people first while helping credit unions undertake the delicate work of collecting on delinquent accounts. To learn how we can help, contact our sales department at 800-942-7124.

Originally Published on CUInsight.