Quick Overview
Financial pressures are mounting. Inflation, economic uncertainty, and job instability are making it harder than ever for members to stay on top of their financial obligations. As a result, delinquencies are rising, collection costs are skyrocketing, and credit unions are feeling the strain.
To dig deeper, we sat down with Barb Lowman, President of CUNA Strategic Services.
She shared why collections have become a major pain point, what’s driving up costs, and, most importantly, how forward-thinking credit unions can take control of the situation.
Here’s a hint: The key lies in equipping members with the right tools while preserving the compassion, empathy, and personal touch that set credit unions apart.
Dive into the full conversation now!
Why are delinquencies shaping up to be one of the biggest hurdles for credit unions this year?
Barb Lowman: People are struggling. Post-COVID, they weren’t borrowing or spending much, but now they’ve taken the leap and started spending again. On top of that, the cost of living is high, and many are losing their jobs. You can really see the difference when you go to the grocery store now compared to five years ago, or even two years ago. It’s hard to sustain your family household.
Humans as a whole are just challenged with the cost of living, maintaining employment, and supporting growing families. The environment just seems to be getting more and more difficult as time goes on.
How are credit unions dealing with the rising cost of Collections?
Barb Lowman: Some credit unions have outsourced collections because the cost to collect is twofold.
First, there’s the human capital – maintaining FTEs to handle collections is a growing burden for the credit union as the scope of the effort increases. With a shrinking staff, it becomes even harder to keep up with the volume and engage an expanding membership.
The second factor is technology. It’s much easier for members to engage via text rather than having a conversation with a human and explaining why they’re behind on payments. There’s a shame and an embarrassment that’s removed from that situation.
Credit unions need to leverage technology to improve the member experience and streamline operations, making collections faster and more efficient. But, if you continue to keep it in-house, the burden is on you to be able to keep up.
How does Texting help credit unions deliver empathetic, non-intrusive, and seamless collections?
Barb Lowman: Interestingly, one of the first use cases that Ashish (Founder and CEO of Eltropy) talked to me about Eltropy was collections.
“My initial response was, Really? Collections?”
Then we sat down, and I thought about how it is so much easier for a member to receive and respond to a text. Think about the embarrassment that it saves. It’s so much easier to engage with your credit union through a text and explain to them why you’ve fallen short, why you’re behind on your bills.
Texting also helps credit unions delight their members, making it as easy as possible for the members to perform transactions and engage the way they prefer.
Break Through the
Collection Silence
In the full conversation, Barb revealed the BIG THREE that are shaping the future of community financial banking today:
- Safe & Strategic AI
- The Ever-Evolving Role of Physical Branches
- Empathetic Collections
Special Thanks to Barb Lowman, President, CUNA Strategic Services for these super actionable and powerful insights.
Barb brings more than two decades of dedicated credit union experience to CSS. She has an extensive track record of delivering technologically advanced products and superior service to help credit unions and their members thrive.
