8 Ways Credit Unions Can Drive Text Messaging Opt-Ins

Lending money and collecting debt — two sides of the same coin — are ancient practices that need a modern makeover. Loan application processes are cumbersome and time-consuming, while debt-collection attempts are largely ineffective. For credit unions, at least a partial solution centers on more effective and convenient communication with members that could lead to better outcomes.

Although members overwhelmingly choose text messaging as their preferred communications method, many credit unions still rely on email and phone calls. Some CUs are starting to adopt text messaging because of the trend lines. According to one study, 90% of people read a text message within the first 3 minutes of receiving it. Another study found that Americans text 5x more than they call. Let’s explore how a text messaging platform could dramatically improve Lending and Collections.

Lending

The good news is that the Credit Union National Association recently predicted a 9% increase in credit unions’ total loan balances for 2018. The bad news is that the lending process too often results in an unpleasant member experience. The road to final approval is paved with delays, the need for repeated follow-ups, and mounds of paperwork. Phone calls land in voicemail and emails are missed or ignored.

Solution: Leverage an integrated digital technology solution to streamline the lending process and enhance the member experience. Eltropy’s Text Messaging + Analytics platform offers multiple advantages for Lending:

• Elicits quicker member responses because of the speed and convenience of text messaging.
• Allows credit unions to use secure links in text messages to collect required documents. Examples include a driver’s license or a paystub. This ability to upload documents provides a big edge over current lending processes.
• Works with DocuSign to secure signatures digitally.
• Eliminates delays by using secure links to send documents over text messages, relieving both the lender and the member of the burden of printing forms and managing paperwork.
• Integrates with a credit union’s core banking and loan origination systems. Check out a recent blog on how Eltropy integrates with Symitar.
• Sends automatic real-time notifications to loan officers when loan documents are received.
• Offers two-way messaging between loan officers and members when a deeper level of communication is required..

Collections

With charge-offs on the rise, credit unions increasingly need to consider the individual circumstances of defaulting members. Typically, when a member is unable to pay debt over time, the CU turns to a collection agency, a practice that has proven to be ineffective. The biggest pain point is a low member response rate resulting in a poor collection rate.

Solution: Use a two-pronged approach, one for simple lateness and the other for bigger repayment problems. First, send automated notifications and follow-ups using text messaging to elicit quicker responses. Eltropy’s analytics offers CUs real-time feedback on how well members are engaging. Second, leverage text messaging to engage members individually to better meet their needs. By understanding a member’s financial hardship, a CU would be empowered to work with that person on a resolution, for example, agreeing on a manageable repayment plan. Eltropy’s two-way messaging capability supports this scenario.

Many credit unions maintain data on late-paying members in Symitar, a popular core banking system. Because Eltropy can be integrated with Symitar, credit unions have the opportunity to combine access to real-time member information with the ability to seamlessly send text messages. For example, it would be easy to set up “triggers” for text messages to alert members as soon as they are two days late in making a payment.

How to Start Text Messaging Quickly

More and more, the business world has turned to text messaging to engage customers on their favorite channel. In fact, 9 out of 10 consumers want to use text messaging when talking to businesses. For credit unions, a text messaging platform offers clear benefits for both Lending and Collections: ease of use, a higher response rate, and a superior member experience with a personalized focus. To learn how you can adopt text messaging — and leverage it for Lending and Collections, simply request a demo of our solution.