How Credit Unions Can Turn Indirect One-and-Done Members Into Direct Members

The current car-buying market hasn’t been this hot for a long time. Fortunately, credit unions have been steadily increasing indirect lending through car dealers to grow their loan portfolios and membership bases. However, converting indirect members into engaged members with deeper banking relationships is no easy task. A plethora of products and services are available for indirect members to benefit from, but why are so few taking advantage of what credit unions have to offer? It may have something to do with the member experience. 

The payments arena presents a huge opportunity to gain competitive advantage. Today’s consumers want flexible, convenient, simple, and innovative ways to pay, and they want the places where they shop and bank to provide new payment options and technologies. Indirect members typically already have a “primary financial institution” (PFI) relationship with banks that may have more money to invest in the latest and greatest technologies offering ease and convenience. So, what can, and should, credit unions do to tackle this problem head-on?

Digital EBPP Capabilities to the Rescue

An electronic bill presentment and payment (EBPP) solution can deliver bills faster and encourage on-time payments. Some key digital EBPP features providing flexibility, convenience, and frictionless simplicity to indirect credit union members, include:

• More Payment Options – ACH; credit, debit and prepaid cards; direct debit bank transfers; and eWallets like Apple Pay, PayPal, Venmo, and Zelle give indirect members the ability to pay in the way that makes the most sense for their individual financial situations versus the clunky process of paying by check. 
• One-Time Online Guest Payments – Indirect members can make payments without enrolling in an online portal with a hosted webpage or opening an account that comes with online banking. 
• Autopay Programs - Autopay automatically schedules and deducts monthly payments from indirect member’s credit or debit cards or bank accounts on due dates, ensuring late fees are not assessed. Indirect members can easily set up autopay via a quick and easy online enrollment process. 
• Interactive Voice Response (IVR) Payments – Although not so new, automated IVR systems enable indirect members to make one-time payments from smartphones and tablets quickly and easily.
• Pay by Text – By leveraging the power of SMS text messaging, credit unions can deliver highly-personalized payments experience to indirect members by allowing them to select how many days in advance they want to receive bill-ready alerts and the digital payment option they want to use to pay. Upon receiving a bill-ready alert, indirect members simply reply with a “PAY” command text to initiate a payment from the funding source previously established. A payment confirmation text is sent back to the member’s device indicating the transaction has been completed.
• Chatbot Support and Payments – Credit union customer service agents can communicate with indirect members about their bills and accept payments via Facebook Messenger, Amazon Alexa, and Google Assistant with chatbot capabilities. Customers can receive bill-ready payment-related notifications and reminders once accounts are linked. 

And, of course, these experiences can be made available to direct credit union members as well. 

The Bottom Line: Besides accelerating cash flow and streamlining operations, credit unions that offer robust and innovative EBPP capabilities have a tremendous opportunity to deepen member relationships. Turning indirect, one-and-done members into long-term, direct members. 

Updated from a blog originally published April 30, 2020.

When indirect members love the loan experience, it can lead to opening new accounts or loans as direct members. Learn about Maximizing the Member Experience Through Payments in the webinar featuring Alabama Credit Union. 

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.