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CO-OP Financial Services: COVID-19 Trends That Allow CUs to Outshine Banks

CO-OP Financial Services has posted a think piece on the need for credit unions to continue to be the compassionate banking alternative: delivering the financial support that consumers and small businesses need now and in the face of an uncertain future. There are three upcoming trends that CO-OP Financial Services (www.co-opfs.org) recommends credit unions prepare for, ensuring members have continued access to the financial tools and products they need, while outshining Big Banks.

Trend One: Migration from Debit to Credit. While cash and debit cards are the two most preferred payment methods among U.S. consumers, we may see a significant shift to credit over the coming weeks. Among best practices: Credit unions should proactively reach out to their credit cardholders with special offers.

Trend Two: Forward-Facing Risk Mitigation. Credit unions must be prepared for increased risk of payments delinquency and fraud, balancing the risk of mitigating fraud while avoiding a spike in unnecessary declines and ensuring cardholders have access to their funds. Among best practices: Closely monitor fraud at the transaction level while levering tools to help minimize payment fraud losses.

Trend Three: Digital Payment Adoption. Digital payment adoption will likely grow exponentially over the coming months. Among best practices: Credit unions should use this opportunity to bolster their digital payment options.

CO-OP’s piece concludes: “While COVID-19’s long-term economic impact remains unknown, a credit union’s payments portfolio is a powerful means of maintaining regular interaction with and support for its members. As Big Banks continue to put profits before people, credit unions have an opportunity to demonstrate their strengths. Modifying their payments strategy to deliver continuity and financial relief will help credit unions maximize the benefit to their members and in turn, increase loyalty.”

The full think piece can be read here.