Post-Pandemic Opportunities: What Credit Unions Can Expect Moving Forward

Ron Davis
13 May, 2022

The pandemic brought not only economic downturns and lulls, but also drastic changes in consumer behavior—particularly when it comes to banking preferences. There have been cutting edge breakthroughs regarding methods of payment, an increased use of digital banking, and consumer demand for excellent service when interacting with their lender both in-person and digitally.

Commercial banks, especially mega banks, are staying on top of these trends and adapting their business and technological infrastructure. To stay competitive, now more than ever before, credit unions need to rise up to the challenge of meeting these ever-changing consumer demands by being adaptive, innovative, lean.

This can be accomplished with the right credit union technology. The pandemic’s ongoing impact and changing consumer patterns are not the only issues that lenders will need to worry about. On top of this need to stay competitive in the financial sector is the urgent demand to comply with regulatory standards that are ever-evolving and increasing in scope. In 2021, there was a drastic shift in the regulatory compliance landscape for credit unions. There have been an indigestible number of regulatory changes, along with increased enforcement and more rigorous audits. Here is a closer look at the main regulatory-related trends credit unions must adjust to during these unprecedented times:

Keep up with regulatory change

The pandemic’s ongoing impact and changing consumer patterns are not the only issues lenders will need to worry about. A 2021 Wolters Kluwer study showed that nearly each sector of banking ranks “keeping up with regulatory change” as the biggest piece of the regulatory burden pie.

It can be a lot to juggle when lenders need to follow what the changing compliance factors are while adhering to the existing ones. In addition to that, Current Expected Credit Loss or CECL standards will go into effect for mandatory compliance from credit unions for fiscal years going into 2023.

There is also a growing demand for customers to be able to invest in quality cryptocurrency. A study from Reuters shows that nearly half of all of the cryptocurrency owners in 2022 from the United States, Latin America and the Pacific bought their digital assets for the first time in 2021. And these numbers will continue climbing. Credit unions need to figure out how they will offer these services to customers and follow the wavering NCUA guidance for working with third parties on crypto goods and services.

Digitalize to comply with regulatory requirements and provide proof of compliance

Increasing compliance and reputational risks are hot button issues that are not going away. And unfortunately, although we are living in an increasingly digitalized world, many businesses—especially small businesses—are still running their processes manually.

But what happens when regulators come and hard copies of lending logs cannot be located? What happens when excel crashes on a local hard drive and a year’s worth of compliance management efforts are lost?

A small blip in technology could mean a loss of adequate proof to provide to regulators during audits: a disastrous consequence. This is where digitalization and regulatory compliance come hand in hand. It is nearly impossible to manage all the changing regulatory requirements without digitalizing credit union processes and keeping the host technology up to date.

Because of the uncertainty due to regulatory change, having the appropriate change management program implemented is critical to a credit union’s success. Trying to keep track of events, both planned for and unplanned for, cannot be possible anymore as risks become more and more complex.

Credit unions will need a digital risk management process that is methodical and automated to yield security, clarity and flexibility to meet the standards of regulators and members. There are many post-conversations post-pandemic regarding automation, such as using AI, loan decisioning and mechanical process automation through robotics.

Investment in automation is cunning and forward-thinking but will also come with regulations that will need to be accounted for using a digital system. The same will apply to the introduction of self-service options though portals, apps and other online tools and services.

An ERP system that can track the regulation and risk and of newly digitalized lending services and payment options not only helps credit unions be prepared for audits, but also to protect their lenders from the increasing risk of fraud.

Credit unions are currently facing other concerns such as loan default risk, inflation concerns, business resilience and adaptability, and climate-related financial risks, on top of all of the regulatory challenges. As the financial services industry rapidly grows and evolves in tandem with mega globalized banks, credit unions that want to continue to thrive in the lending ecosystem will need to adopt these new technologies and services to stay in control of their regulatory and fiscal future.

HSO and Microsoft can help your credit union address the post-pandemic world

HSO can help your credit union with solutions powered by the Microsoft platform, including Microsoft Azure and Dynamics 365. HSO's Solution for Credit Unions is designed specifically for credit unions to provide you with:

  • Attracting new clients
  • Campaign management
  • Client retention

HSO's Solutions for Credit Unions provide control over all aspects of your business while helping defend against fraud and simplify the customer onboarding process:

  • A 360-degree view of customers and prospects
  • Pipeline management
  • Marketing automation
  • Engagement tracking
  • Member management
  • Reporting and analytics

Learn more about HSO's solutions for credit unions

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Learn more about HSO's Solution for Credit Unions and talk to our financial services experts today to discuss how we can put technology to work for you.

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