An Outlook on 2021: Catch up on these NAFCU Podcasts
By Allied Solutions | January 27, 2021
The COVID-19 pandemic created much uncertainty last year. Thus far, 2021 is proving no less tumultuous as financial institutions continue to face expectations for a high level of service, while also remaining vigilant about compliance with regulatory requirements. As we navigate through this recovery, there’s uncertainty related to unanticipated consequences that may be yet to come from measures put in place in 2020, such as PPP loans, stimulus payments, enhanced unemployment subsidies, payment deferrals, and other moratoriums for auto loans and mortgages, among others.
Financial institutions are facing the challenge of having to assess their own operations and determine what steps can be taken to move swifter internally to provide better services for consumers, while also being mindful of protecting their portfolios. As we look ahead to 2021, what used to be strategic planning has turned into flexible adjustments to adapt and remain fluid with industry change. Recovery measures’ mid- and long-term implications remain uncertain, particularly as these measures are delayed and pushed out further.
Allied Solutions hosted a series of podcasts with NAFCU Services to discuss these challenges and provide an outlook on what they will mean in 2021. The pandemic has been huge catalyst for change, and never has there been a better time for financial institutions to reevaluate and implement new solutions.
Beyond the Pandemic Risk Series
Unfortunately, there is not a playbook for managing delinquencies in a pandemic. In this two-part podcast series, Allied Senior Vice President Anne Holtzman discusses how financial institutions can prepare for 2021. She shares that a significant focus risk management should center around compliance, collection activity, and consumer sensitivity.
This two-part series discusses questions like:
- What overall impact has the pandemic had on risk management practices?
- What are the top 10 concerns you’re hearing from your credit unions with regard to managing those challenges?
- What role does portfolio monitoring play in managing emergent risks?
- What can we expect in the next few months? How long will CUs be facing these new challenges?
- As we think about drastic changes or pausing in regulations, what role does collection activity play in maximizing returns and minimizing some of the losses?
There’s a growing need for stronger, more decisive action toward delinquency management in 2021. After nearly a year of pandemic recovery guidance for how lending institutions should be handling collections and delinquency activity, it’s anticipated that early this year there will be change across the industry landscape. As the pandemic continues, consumer advocacy and consumer sensitivity will continue to be reflected through the actions regulatory bodies—such as the NCUA, the OCC, and the CFPB—take. Financial institutions will need to remain flexible, while also maintaining timely service.
Understanding true loan loss, charge-off, and delinquency is hard when consumer protection protocols remain in place and extended into 2021. To address these challenges, financial institutions need to prepare a risk management strategy in 2021, prioritizing:
- Data management to assess available early indicators
- Borrower location metrics
Credit Union Growth Series
Financial institutions are encouraged to look forward and consider growth initiatives. It’s critical to anticipate and consider risks that have yet to arrive, such as a resurgence of the pandemic, to future-proof operations. In this two-part podcast series, Allied Senior Vice President Charlie Peterson discusses how financial institutions can seek growth opportunities in 2021. He shares why digital transformation needs to happen now rather than later.
This two-part series discusses questions like:
- What have you seen CUs doing to sustain growth through this pandemic, outside of deposit growth?
- What do you see as the biggest risk CUs are facing approaching 2021 and beyond?
- What can CUs do now to safeguard against future risks, both known and unknown, like pandemic resurgence or delays to economic recovery?
- What are some of the biggest challenges you’ve heard from CUs and their flexing to address this demand for digital services?
- What should CUs be focusing on right now? What digital tools and strategies should CUs be prioritizing?
2020 saw an influx of deposits and high demand to refinance both auto loans and mortgages. But new loan yields plummeted last year, creating a challenge for lenders in 2021. This year, financial institutions are feeling the pressure to cross-sell solutions and consider how to convert borrowers to provide growth opportunities and increase loan yield. Part of that involves digital investment.
Mobile and digital banking usage has grown exponentially with the pandemic. Financial institutions need to use digital tools to create on-demand channels to enhance member service, marketing, growth, and risk strategies. There are some natural disadvantages for community-based businesses and financial institutions that don’t have large technology budgets or the digital footprint that some large competitors do. However, digital implementation increases efficiency and cost savings, drives compliance and consistency, and provides a virtual borrower experience.
Digital tools to consider in 2021:
- Direct text messaging
- Personalized marketing techniques for cross-selling
- Chatbot or artificial intelligence
About Allied Solutions
Allied Solutions, LLC is one of the largest providers of insurance, lending, and marketing products to financial institutions in the US. Allied Solutions uses technology-based products and services customized to meet the needs of 4,000 clients, along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions maintains over 16 regional offices and service centers around the country and is a subsidiary of Securian Financial Group, Inc.