Designing Member Relief Strategies for the Next Stage of COVID-19

Simple analytics strategies make planning through uncertainty possible.

By Keith Dunlap, Managing Director of Sales, AdvantEdge Analytics

One of the silver linings to the COVID-19 crisis is the prediction that economic recovery may come faster than similar downturns of the recent past. Less comforting, however, is the intense diversity of financial impact across member segments. Whereas some Americans have suffered deep income losses, others have thus far weathered the pandemic storm with few financial wounds. Complicating matters is the uncertainty around how financial impact looks over the long term.

Designing relief programs to accommodate members across such a wide spectrum has been a challenge for credit unions, and it will continue to be as we navigate the unsystematic reopening of local economies. With the help of data analytics and the insights it generates, however, credit union decision-makers will be in a much better position to help members navigate the winding road ahead.

Examine Global Predictions Through the Lens of Local Data

A good place to start is by lining up the demographic data of your membership with global expectations around job loss, economic impact, retail disruption and other forecasts. This will help your teams make some predictions around how these trends are likely to play out in your local neighborhoods.

man frustrated at computer

For instance, analysts expect the millennial generation will be particularly hard hit by the economic consequences of COVID-19. Understanding how many of your members were born between 1980 and 1997 can provide a decent predictive measure of the risk millennial impact presents to your credit union.

The same information can also point decision-makers in the right direction in terms of specialized products or programs to help millennial members pay their bills. If your membership has few millennial account holders, but plenty of parents to millennials, you could consider a program that enables moms and dads to help their children through this tough time. A program like that may even serve as a foundation for a millennial outreach campaign when your credit union is ready to resume its aggressive growth plans.

Monitor the Health of Local Industries and Supply Chains

Expectations around how different industries may respond to a pandemic recession can also serve as a decent backdrop for forecasting member and credit union impact. If your credit union serves a select employee group (SEG) or a number of SEGs, for instance, it makes sense to monitor the health of those industries, as well as the companies along their supply and distribution chains. Oil and gas extraction, tourism, transportation and warehousing, for example, are expected to continue layoffs, furloughs and job cuts over the next several months.

Armed with basic employment data on your membership in aggregate can help your leaders make educated assumptions about the degree to which your community will experience certain trends. It will also be helpful in terms of designing tiered programs to fit the needs of different member segments. A loan modification program, for instance, is not something your credit union needs to offer every member. Members who have been fortunate enough to maintain their income are not well served by skip-a-pay, loan deferment or similar programs.

Continuous Investigation Serves Long-Tail Needs

Because local economies are opening at different rates, it will be important to run your analyses frequently. Members furloughed last month may be going back to work sooner than expected. Businesses expected to shutter their doors last week may have been allowed to reopen quicker than they’d thought.

The key is to maintain a close eye on both snapshot and trending data, and to empower your teams to respond quickly to the stories the data is telling.

During times of crisis, members need support in the moment; they also need advice to guide them toward what’s next. Data can provide the intelligence your teams need to provide immediate assistance while also looking ahead to prevent financial trouble down the road. Our data scientists and consultants are here to do the same for your credit union. If we can help your teams examine global predictions through the lens of local data, don’t hesitate to get in touch.