By John San Filippo
Monica Eaton, founder and CEO of the Clearwater, Fla.-based Chargebacks911, recently sat down with Finopotamus to discuss the evolving landscape of dispute resolution and the unique challenges faced by community financial institutions, particularly credit unions. Eaton, whose company provides dispute resolution technology to financial institutions and merchants globally, offered valuable insights into how credit unions can leverage technology to enhance member experience and navigate the changing dynamics of the financial industry.
Understanding the Pain Points of Community FIs
Eaton acknowledged the distinct challenges faced by community financial institutions in North America. “Obviously not as much volume, but definitely higher costs, higher pain points as a result,” Eaton noted. She pointed to the lack of access to advanced technology solutions, the burden of competing with larger institutions, and the evolving expectations of a digitally native demographic as key contributors to these pain points. “[They’re] dealing with, you know, a millennial – an evolving demographic that is looking for a frictionless experience,” she explained. Eaton emphasized the need for credit unions to adapt their value proposition to resonate with this changing demographic that prioritizes speed and seamless digital interactions.
Building Trust: Speed, Security and Member Loyalty
Eaton underscored the importance of fast dispute resolution as a key driver of member loyalty. “The fastest that an issuing bank can resolve a dispute has been proven to be one of the top three indicators of loyalty.”. Touching upon the digital transformation within member service expectations, she added, “Consumers have more confidence and they’re going to use a solution if they know that they can file a dispute and they know that the transaction is secure.” She mentioned a PayPal study that demonstrated increased usage of payment methods by consumers who experienced a quick and efficient dispute resolution process, regardless of the outcome.
The Benefits of Modern Tech Solutions for Credit Unions
Eaton emphasized the accessibility of advanced technology solutions for smaller institutions. “The technology that is available to credit unions and smaller community banks today is actually the same type of technology that is available to larger institutions – and arguably even available at a much faster pace, with less effort,” Eaton explained. She suggested that the lack of legacy infrastructure within smaller institutions could actually be advantageous, allowing for faster adoption and integration of new technologies. She highlighted tools like online portals for dispute resolution, apps to enhance member engagement, and artificial intelligence (AI)-powered chatbots offering “streamlined interaction between the cardholder and an AI agent” to address member queries, particularly those related to disputes.
Integration and Scalability of Dispute Resolution Platforms
Eaton addressed concerns about the complexity of integrating new technology, emphasizing that modern solutions are designed for agility and scalability. Platforms like Chargebacks911, for example, adjust to the specific needs and volumes of each client, from those handling a handful of disputes each month to those processing millions. “It scales based on the size of the user,” she explained.
Transforming the Member Experience: Beyond Automation
Credit unions, she noted, need to redefine how technology and automation can enhance the member experience. “It isn’t a scenario of ‘turn your high touch relationship into a robot,’” she explained, stressing the importance of consistency in interactions with members, offering a standardized experience and setting clear expectations during a dispute.
“Every human is going to ask different questions. Every human is going to respond a little bit differently,” she said, highlighting the inconsistencies inherent in manual processes. Eaton advocated for leveraging notifications within these automated systems to keep members informed throughout the resolution process, reducing anxiety and the need for frequent follow-up calls. This streamlined approach ultimately enhances member confidence and trust.
Advice for Credit Union Leaders
When asked for advice for credit unions, Eaton drew on her background in consumer behavior analytics, stating, “The customer is always right. I still believe that members are the most important part of the chain.” That said, she cautioned against rewarding invalid claims simply to appease members, noting that such actions can lead to increased instances of similar claims in the future.
“If you reward bad behavior, statistically you’re going to get another invalid claim within 90 days,” she warned. Instead, she advised adherence to consistent protocols and transparent communication with members about the rules and processes governing disputes. This approach, she argued, protects credit unions from unnecessary write-offs and strengthens relationships with members by upholding fairness and transparency. “If you do those things, you can avoid a lot of very costly fees and write-offs and lots of exceptions,” Eaton concluded.