By John Flynn, Open Lending President & CEO
I know you’ve been hearing this, but we are living in unprecedented times due to coronavirus. Over the course of the last two months, life in America has changed drastically. Social distancing is now the norm, people are confined and separated, and businesses are taking massive hits due to the pandemic.
Lenders must connect with these same panicked people in an empathetic way to ensure they know their credit unions and banks are still up and running to serve their financial needs – a steady beacon in the storm. Marketing departments have shifted into overdrive to reach consumers on all fronts - especially digital when so many are spending more time at home, on their phones and on their personal computers; now is the time to reach them.
Messaging to reach out to the borrowers and prospective borrowers must be on point for the times were living in. More than 15 million that have lost wages or their jobs entirely due to the impact from coronavirus. They likely would benefit from a refinancing of their auto loans to eke out the money they need to survive. Cars are still breaking down and affordable loans, particularly to the most financially vulnerable, will be needed. According to USA Today, the unemployment rate may be anywhere from 13 to 84 times the number it was just a year ago and is expected to increase in the coming months.
Community financial institutions were founded to help the average consumers, so focus on your roots in your messaging. Credit unions should focus on the value of member-ownership and their not-for-profit status that allows them to make car loans at the best rates in town. Now is the time to build relationships without the hard sell. You’re there to help.
Consumers also want to be reassured about placing their trust in a financially stable institution. Emphasize strength and stability in your language, including images that are placed alongside your message of genuine concern. Even boost your marketing spend as feasible, because these short-term investments will provide long-term dividends.
And leverage data your credit union or bank and business partners already possess. Open Lending offers enhanced, proprietary credit and credit migration data for financial institutions to help provide a better view of your risk, so your credit union or bank can lend to those in need with confidence. Do the analysis to reveal where consumers’ habits have drastically changed. Have the direct deposits stopped, or are they falling behind on other payments? During this historic time, send words of understanding and offer a helping hand where you can. Open Lending’s Lenders Protection also provides default insurance for when the occasional auto loan goes south.
Many financial institutions are waiving fees or offering skip-a-pay, which Open Lending’s platform supports, because even better marketing than your words are your actions. That’s strong branding, and community banks and credit unions live or die by their brands.
While community financial institution’s resources are stretched in response to the coronavirus, which I understand as a former credit union CEO myself, we must keep in mind that the public is bearing a heavy burden as well. Everyone’s recovery will take time, but we must all do it together. CNBC reported that the IMF projects it will be 2021 before the world economy recovers, and local economies may take longer. Community-based financial institutions have great opportunity now to really shine in our local communities.