Every member of a credit union is more than just a customer, they’re family. These businesses are often cornerstones of the communities they serve, and expected to offer personalized service. Many credit unions are invested in their members’ well-being, which is part of the reason why some offer specialized services like credit builder loans.
Personalization is embedded in almost every facet of credit union operations, but debt collection is often overlooked or not optimized to its full potential. Let’s take a look at why credit unions should implement more personalization into their collections strategy and what that looks like.
Why Personalization is Key to Recovery Performance
Credit unions have a unique relationship with their members. Recovery strategies have to balance doing everything possible to collect repayments while preserving the relationship with each delinquent member. Effective personalization at scale bridges this gap and offers credit unions the following benefits:
- Increases Recovery Rates: One-size-fits-all approaches to collections are no longer effective. Members expect their credit unions to understand their unique situation and preferences. A personalized strategy will optimize engagement by choosing the right time, channel and message for each member.
- Supports A Member-First Philosophy: Personalized and empathetic debt collection communications reinforce the “credit union difference” many members join for. Personalization helps build trust and an empathetic tone makes it more likely for members to re-engage with other services once their financial obligation is resolved.
- Drives Operational Efficiencies: Debt collection software for credit unions can determine a member’s preferred communication channel and reduce ineffective outreach efforts. By knowing how each member prefers to communicate, other forms of outreach become more streamlined.
Personalization & Digital Debt Collection for Credit Unions
Many credit unions want to introduce more personalization into their collection strategy, but they run into a resource barrier. Staff only have so much time to run email and/or SMS outreach campaigns on top of other responsibilities. This is where debt collection software for credit unions can offer a lot of value. For starters, this technology can automate recovery emails and text messages being sent to members.
Look for debt collection software that runs on advanced machine learning technology that can personalize engagement with each member by choosing the right time, channel and message. This makes it much easier for credit unions to gain access to the benefits of digital debt collection without ballooning operational costs. Modern AI-powered recovery tools may also have built in guardrails to help ensure your credit union follows all compliance rules and regulations.
By automating the majority of digital debt collection outreach, staff have more time to focus on members who are higher risk or need hands-on support. Digital channels are also a core part of an effective omnichannel collection strategy, leveraging multiple channels efficiently to meet members in their preferred ways.
A Credit Union Collections Strategy Needs Self-Service
When it comes to credit union debt collection, the majority of members prefer having the option to self-serve. A self-service portal helps remove some of the stigma around the delinquency situation that causes members to avoid talking to staff and empowers members to make repayments at their own pace. By using self-service as a form of personalization, credit unions can:
- Reduce Member Anxiety: Ultimately, every credit union wants to bring as many delinquent members back into the fold as possible. Self-service gives members a path to settle their financial obligation without the embarrassment and anxiety that comes with discussing the matter with a human.
- Offer 24/7 Convenience: There’s no need for members to find time to call during business hours. Self-service portals give them around the clock access to their account, so payments can be easily made on their schedule.
- Scale Personalized Collections for Less: Self-service options backed by debt collection software are designed to scale. Credit unions can add more accounts and portfolios to their recovery efforts without spending more on infrastructure or hiring additional staff.
See How Retain Helps Credit Unions Collect More
Retain white-label digital debt collection software is powered by patented machine learning to optimize engagement with every account. By partnering with Retain, a major credit union saw a 31% increase in payments just 30 days after implementation with personalized content.
Explore the full case study to learn how automating digital communications helps credit unions increase payment rates. Our team is also available to answer questions about optimizing your collection strategy.
