The COVID-19 crisis, and the measures being taken to contain it, are having a significant economic impact on individual consumers. With unemployment surging due to temporary shutdowns across nearly all industries, consumers will soon be looking for options to meet immediate cash flow needs. Governments are taking steps to help alleviate what is hoped to be a short-term shock with direct payments to individuals, but regulators are looking for the private sector to be part of the solution.
US Federal Agencies Encourage Banks and Credit Unions to help
Five US Federal agencies, including the Federal Reserve, Consumer Financial Protection Bureau, FDIC and the National Credit Union Administration, issued an Interagency Statement on March 25, 2020, encouraging banks and credit unions to offer small-dollar unsecured loans in a socially responsible manner to impacted consumers and small businesses. Consumers, including those that may be either under or under-employed, are looking for trusted financial service providers that will provide loans at a reasonable interest rate.
However, the majority of banks and credit unions have not historically served this market. It’s one thing to decide to bring a new offering to much-needed services to an underserved market segment, but there is also can be challenges with adapting lending platforms designed for mortgage or automotive loans. For example, how can they support an automated decision process with limited documentation to generate decisions in minutes and funds disbursement within hours?
Fortunately, there are proven solutions in the market which have been implemented by existing financial institutions, but also ecosystem players that offer small-dollar, unsecured loans directly to consumers. They have proven it is possible to stand-up a completely digital Loan platform in weeks, integrated with their existing systems, and even leveraging social media to promote awareness and generate interest.
The Art of the Possible
A great example is the Gojoko Community Lenders Gô Digital® Platform running on the Persistent Digital Credit Union Solution™. The Community Lenders Gô Digital® Platform supports community banks and credit unions to help them grow and expand into modern financial institutions. The solution offers customers the choice of modularized capabilities based on their needs, which is powered by Amazon Web Services (AWS). The service enables banks and credit unions to rapidly design, launch, service and scale banking and lending portfolios. It also offers credit unions an effective way to leverage a cutting-edge banking platform without significant investment. Gojoko deploys a fintech platform, digital customer interface and advanced digital marketing to its banking customers.
How can we help
Persistent is uniquely positioned to help banks and credit unions of all sizes to quickly stand up a new digital lending platform that supporting small-dollar unsecured loans. We’ve done it for others and have the blueprint and pre-built accelerators that enable you to rapidly get to market.