Digital evolution in Saccos must reflect customer experiences

By David Kipkorir

The coronavirus pandemic has induced a shift in cooperatives’ needs that will disrupt the movement ecosystem.

As the world grapples with the pandemic, Savings and Credit Co-operative Society (Saccos) businesses have to reposition themselves to align with the demands of the “new normal”.

Prioritizing good governance, digitalizing Saccos, and maintaining excellent and quality service delivery will unlock their potential in the post-Covid-19 era.   

Saccos must look beyond the pandemic and use this crisis as a basis to reimagine their role in the new reality.

They must continue to focus on members’ needs to help them recover from the impact of Covid-19.

Equally, Saccos must adapt their operating models to drive efficiency and resilience.

Risk management thresholds need to be reflective of broader economic changes, and greater attention must be given to more challenged member segments.

Moreover, the cooperative sector continues to fill an enormous credit gap: offering forbearance and giving members greater access to loan facilities.

Today, many Saccos are experiencing a growing tension between supporting their members and increased concerns about the rise in non-performing loans (NPL), which will lead to capital depletion.

While joint action with governments and regulators is likely to be required to address the immediate NPL overhang, the repercussions for businesses and individuals are expected to be longer lasting.

Looking ahead, there are three areas of focus that will reshape the sector and support a stronger recovery: serving customers better, through the right channels, with dynamic and relevant products and services, adapting to new ways of working, and building more resilient and agile organizations.

To help members and businesses recover from the economic impact of Covid-19 means helping them focus on productive economic activity.

These institutions must be a seamless enabler of that activity. This means enabling members and businesses to manage their financial needs in the right way. Increasingly, that means digitally.

Saccos for long have tried to drive digital adoption due to its benefits. Some markets have shown greater success than others. The closure of branches and offices in the wake of Covid-19 has forced a shift to digital services, from account opening to loan applications.

Processes demanding physical signatures now allow digital signing. Importantly, members have adapted well to these changes.

The question for Saccos is how to keep their members on digital platforms after the Covid-19 pandemic and how to achieve the human touch and a greater personalized service through digital channels.

There are two considerations in driving and sustaining the adoption of digital lending. One is the member experience and need for human interaction; the other is digital access and literacy.

They need to shadow the evolution of the online e-commerce giants that have now built out entire connected ecosystem experiences and value propositions.

To create this, Saccos need a sophisticated understanding of their members’ context and needs.  

Saccos now have an opportunity, as they enhance their digital capabilities to adapt during this crisis, to systematically collect relevant data and create connected experiences.

This will provide a more personalized and intuitive relationship through all channels.

Overall, however, reduced customer demand for physical channels is likely, and Saccos should look for opportunities to release or repurpose real estate where there may be an over-concentration.

Saccos will need to reshape their products and services by providing a consolidated offering to meet shifting member expectations.

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