What Financial Challenges Do Members Think They’ll Have In 2021?

In this persisting pandemic, credit unions are taking a long view of member support. A poll by Gallup identifies anticipated member needs directly from the source.

In March, the U.S. confronted a harsh new reality: a pandemic unlike anything since 1918. This health crisis created an economic crisis to match.

Just one month into the pandemic, Gallup’s U.S. Panel showed unprecedented spikes in daily stress and worry. Stress rose 14 percentage points to 60% and worry rose 20 points to 59%. Gallup’s data also showed 50% of people were worried they would experience not just financial hardship but severe financial hardship. At the same time, the percentage experiencing significant daily enjoyment plunged 20 points to 61%.

By May, the percentage of Americans who considered themselves thriving dropped to 46%, matching the low point measured in November 2008 during the Great Recession.

During the onset of the pandemic, credit unions focused on short-term relief tactics with a singular focus: Immediately drive service to remote channels and increase member liquidity. At the time April 2020 just 10% of the U.S. population thought the disruption from the pandemic would continue for more than a year before starting to improve; in July 2020, that pessimism had risen to 43%.

Unfortunately, the pandemic has persisted well beyond most people’s expectations, requiring credit unions to take a long view of member support from June 2020 onward. In partnership with the eight credit unions participating in the Callahan-Gallup Collaborative Financial Wellbeing and Member Engagement Program, Gallup initiated a future-casting exercise to understand what anticipated needs credit unions must prepare for an exercise directly guided through the voice of their membership.

Gallup directly asked members: What financial challenges do you anticipate due to the crisis in the next six to 12 months?

Three prominent themes emerged and provide insight into what members need from their credit union during these difficult times.

  1. Fear Of The Unknown Several members stated they feared what getting sick would mean not just for their physical wellbeing but for their financial wellbeing as well. Despite people’s desires to look forward, the pandemic is still the lived experience, and credit unions need to exert care and concern in their service levels.
  2. Help Me Seize The Opportunity Although 71% of Americans reported feeling a great deal or fair amount of disruption from the pandemic, 29% of Americans did not. Many members state they want support in preparing for and investing with more discretionary income and low interest rates.
  3. Cash Flow Worry By far, the largest proportion of members reported they anticipated they’d need help with cash flow. Members did not have an immediate need but were looking for precautionary planning support just in case in short, questioning whether the credit union would continue to be there for them. Credit unions should anticipate this will be a dominant conversation going forward.

How To Talk Members Moving Forward

If cash flow worry becomes the substance of conversations, what quality of coversation would ease the minds of members? Many credit union employees have an A+ knowledge level of their institution’s product and service offerings; however, they earn an F on handling the conversation in a non-transactional fashion.

In its future-casting exercise, Gallup found members need needs-based, future-focused conversations. More specifically, employees need to understand the financial goals that are important to the member and their family during the pandemic and ask the right questions to understand those needs.

A full 65% of members who report their branch representative understands their goals and asks the right questions agree that their credit union looks out for their financial wellbeing. For members who report their branch representative is merely knowledgeable, that drops to 21%. Not surprisingly, the engagement levels of the former group are nearly two times that of the latter.

For Gallup, this is the difference between financial vision and basic assistance. A credit union that simply takes orders and answers questions basic assistance is not that different from a bank, no matter the credit union’s proliferation of products and services. Financial vision engages members and taps into their inherent motivations factors that are not static but ever-evolving. Credit unions must have a robust listening path to those needs, particularly during this prevailing pandemic, to properly harness and refine its service response.

 

January 15, 2021

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