Navigating Uncertain Economic Times: The Key Role of Community Institutions and the Key to a Sustainable Future

Local banks and credit unions are known for supporting their account holders and communities in times of need. It’s at these moments when regional institutions shine as vital assets to their customers and members. 

Today when Americans are bracing for a potential recession, and grappling with rising interest rates and inflation, every dollar counts - and economic concerns are forcing consumers to adopt more conservative behaviors. As costs rise, spending on non-essential items is reduced, and in some cases, consumers are dipping into savings and credit to keep themselves afloat. The demand for financial wellness programs and education is high as consumers and businesses look for advice, and it’s time again for community institutions to do what they do best, and guide their account holders through to easier days.

There are many areas where larger institutions stand out, but in this post, we are looking at the important role community banks and credit unions play in supporting the financial health of their customers and members, and highlighting an opportunity for them during cyclical economic downturns.

Commonly built on the principals of delivering personalized services, and offering cooperative, relationship-based business models, community banks and credit unions reinforce their central mission through the products and services they deliver: to foster the financial well-being of their account holders. It’s for this reason that small business owners and individuals often opt to bank with these types of institutions rather than with large national or multi-national banks. In addition to more personalized attention, account holders often benefit from easier account opening processes, better access to loans with more flexibility and lower interest rates, services for the unbanked, and more targeted financial wellness programs and educational tools. 

Although there are exceptions to every rule, a recent survey found that more than 20% of account holders don’t feel that they can rely on their primary institution for proper financial support, leaving them to navigate turbulent times alone. Unfortunately, the financial guidance and services that account holders seek in these uncertain times may not always be available with larger institutions. In contrast, research has shown that at least half of credit union members felt that their community institution had a positive effect on their financial well-being by making it easier for them to manage their funds.

Regardless of institutional size, the time to step up with more empathetic and personalized banking experiences is today. No one wants to be just a number– especially during tough economic periods, and account holders want to know that their best interest is top of mind. 

Although community institutions may be more attractive with such offerings, these banks and credit unions must ensure their commitment to digital adoption, automation, and efficiency optimization persists. To secure future-success and a competitive advantage that attracts new account holders well into the future, banks and credit unions must capitalize on the opportunities to partner with solution providers during economic downturns to refresh infrastructure, revisit aging processes, and maximize resources in a cost-effective manner. Investments today will transform into cost savings tomorrow, and ensure personalized products and services often experienced in the branch translate, one-to-one, into the digital arena. Leverage your reputation of being a piece of good fortune to many in times of need, and an anchor for account holders during uncertain financial times. 

Alogent partners with financial institutions of all sizes, including community banks and credit unions, to provide them with innovative and personalized digital banking, content and information management, and end-to-end payment processing solutions that improve internal efficiencies so that they can dedicate more time to customer and member services in a cost-effective, resource-smart way.
 

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