How Financial Brands Can Navigate Turbulent Times With Human-Centered Design

After experiencing all of the financial upheaval of 2020's coronavirus pandemic, finance brands know they need to brace themselves for more economic turbulence and uncertainty.

If banks and credit unions want to succeed in these turbulent times, they have to help their customers succeed.

And the answer is innovation. 

On a recent podcast, James Robert spoke with Anne Legg, the founder of Thrive Strategic Services, on the top actions financial brands can take to navigate these turbulent times. She provided  insights on how human-centered design offers simple and extremely effective solutions for customers and the credit unions or banks that serve them.

What Do Customers Need From Their Financial Institutions During Uncertain Times?

With an emphasis on credit unions, Anne pointed out that people generally are looking for solutions to four basic problems. These include:

• Housing: People want to get loans to buy a home. Perhaps, they need to improve their credit or save more for a down payment.
• Transportation: Similarly, people generally want to access credit to buy a car or other vehicle.
• Savings for the future: Members may hope to build a fund to tide them over on rainy days or even in the long term, during retirement. Others might want to fund a business or send children to college.
• Budgeting: Rather than living from one paycheck to the next, some folks hope to get credit or build savings to help them travel, go back to school, or even enjoy a hobby. They need to make the income they have work harder to relieve stress and fund goals.

With those main kinds of services in mind, Thrive develops educational material and tools to help financial companies better solve these sorts of common issues. James Robert pointed out Thrive's emphasis on education, particularly during rough patches, because it's so easy to get overwhelmed by the news and succumb only to fear. Not only can education relieve anxiety, it can also deliver real insights into the kinds of actions that will help businesses and people.

Identifying Resources to Solve Problems

Even though recent news about vaccines and other medical advances have offered some reasons for optimism lately, Anne noted that the next several months will still bring economic uncertainty. Consumers will lose income, care for sick family members, and often, struggle with bills. Even though the coronavirus downturn feels different, finance companies have certainly struggled with recessions and other economic issues before.

For credit unions, it's key to rely upon information about this situation and past downturns to identify the kinds of members who may have issues. Then they can pinpoint some tools that they may already have at their disposal to help.

Innovation is key.

But innovation isn't some one-time spark of genius. 

It's a capability that you can build into your organization.

With that in mind, Anne offered a couple of great examples of how finance companies might use tools that they already have to serve customers and in turn, enhance their own business:

Payment Deferrals

Many people will need a short reprieve from auto loans or mortgages in order to cope with lost income. These consumers may have been laid off or furloughed. In other cases, they may need to take time away from work because schools closed or a family member got sick.

Lenders may find it's in their best interest to implement and even promote programs to allow their customers to skip a payment without penalties or defaults. Look at these reprieves of a few hundred to a few thousand dollars as a micro loan that can help keep customers current.

To support this idea, she mentioned a study by Rohini Pande, a Harvard professor, and Erica Field, a Duke University professor. They found that by giving borrowers as little as a two-month grace period, lenders can double their rate of future new business.

Think of these micro loans as more than loans but also as investments. Not only can banks and credit unions keep customers, they can also help improve their image by framing their message in a positive, helpful way.

Financial Counseling

Along with some flexibility about payments, financial institutions also have a great chance to strengthen relationships with customers with financial counseling programs. If customers face some financial struggles or even just have financial questions, wouldn't it be great if they thought of their bank or credit union as a valuable source of information and support?

And often, banks and credit unions already have the capability to help, so it's just a matter of making sure that customers and members know about it. They really do have an opportunity to provide services that can improve lives and in turn, strengthen relationships with long-term customers.

Anne compared learning how to manage finances to exercise. Most people can't just leap off the couch and run 15K. First, they need to run around the block and then build up their strength and endurance.

Similarly, learning how to steward personal or family finances takes some practice and may even be a lifetime avocation. Ongoing financial literacy and counseling programs can help build lifetime relationships with customers.

Confidence is the Fuel for Future Growth

There is an opportunity, Anne shares, for credit unions to build their roadmaps with the understand that it isn't going to a project plan, but rather a high-level goat setting plan. The roadmap should communicate your successes.

The first step towards transformation is an assessment on your financial brand.

"Talk about your findings. Make sure that one of the biggest things you do as you are moving forward is you are communicating and celebrating the successes. That is where you're continuing to build the confidence you had before. And it also allows you to see the litmus of what you're doing."

When you have a training plan and you begin checking things off the box, you can look back to see how far you've come, but also how much you haven't accomplished yet, Anne continued. 

As James Robert says, "the most important thing a leader can protect is their confidence."

One of the best exercises he shares to build confidence is by stopping every 90 days or every quarter and asking yourself:

• What working well?
• What am I excited about right now?
• What is something I've learned?

What am I looking forward to over the next 90 days?

Anne shares a similar set of questions she uses to self-assess:

• What do I want to stop doing?
• What do I want to start doing?
• What do we want to continue?

Both of these exercises can help financial brands prioritize and organize their opportunities. It is so easy to continuously add more and more to your plate without ever stopping to remove something.