Saving money for a rainy day isn’t easy for the average household. A PSCU survey found that 60% of Americans struggle financially and a full third live paycheck-to-paycheck. To top that off, Bankrate discovered that 56% of U.S. households cannot cover a $1,000 unexpected bill.
Can you identify at-risk members and help them before they get into financial trouble? Proactive collections can make a big difference in your bottom line and your members’ lives.
Employ Proactive Collections Based on Specific Triggers
Being proactive prevents charge-offs and increases member satisfaction. Instead of ruining a person’s credit and banning them from interacting with your credit union, you’re helping them stay afloat. You’re also avoiding the cost of unloading a vehicle or charging off an unsecured debt. If you can help a person or family become more financially stable, their loyalty to your institution grows.
With the data you already have, you may be able to identify those who are struggling. Look for their total collection amount, total recovery, pending amount of debt, and current membership status. Other indicators include a decline in deposits or overall balance, dropped autopay, an end to direct deposit, missed payments or a request to skip a payment, a stack of overdraft fees, indicators of credit card debt outside your FI, and use of payday lenders.
By helping them stay financially afloat, you’re being proactive instead of reactive. Bottom line: your members will feel like they have someone on their side — which is what credit unions are all about.
Need an example of how proactive collections work?
Let’s say Tom Johnson, a 30-something male is struggling. You know he has recently missed some payments and has asked to skip next month’s car loan. By connecting with Tom early, you can help course correct Tom’s financial situation, including helpful opportunities such as a debt consolidation loan.
If you add a CRM to your credit union, you could compile all of that information quickly and easily and add notes to Tom’s membership. The next person who helps Tom will have what they need to instantly assist him. That might include the option to make changes to loan due dates, skip a loan payment for a month, and more.
CRMNEXT Makes Proactive Collections Possible
Nobody wants to admit their financial problems. CRMNEXT is the all-in-one solution to help your credit union stay one step ahead of your member’s financial needs. With CRMNEXT, you’re alerted early about a member’s financial issues. We’re here to help you help them. Let us show you how to bring it all together within your organization, including data, analytics, actionable reporting and automation.
Learn how to help the Toms in your membership. Schedule a demo today.
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