By Robert McGarvey

The CUtimes headline is a slap upside your head: Consumers Care More About Your App Than Your Branches.

Read it again.

Now explain this to me: I am a member of two credit unions, 2300 miles apart, both with assets over $1 billion – and yet they have the identical mobile banking app. Oh, sure, the branding window dressing differs – that is, the names and similar. But the actual guts of the app, what they in fact do, are identical.  Not kind of similar. Identical.

How can that be considered thoughtful branding, 2019 style?

And how many credit unions are on mobile apps that literally 4000 other credit unions have?

Which is where this explosive report from card issuer Marqeta blows the doors off oldstyle thinking.  According to it, Propeller Insights surveyed more than 2000 US and UK adults for Marqeta and the giant conclusion: the front door to a financial institution is an app not a branch.

Reported Marqeta: “One of the most striking results of the survey is how much more greatly people value the digital banking experience over the physical equivalent: 62% of Americans already do the majority of their banking online, compared to just 31% of Americans who say they primarily bank in person.”

Marqeta added: “When asked about how they would feel if every physical bank branch was closed down tomorrow, only one-third of US consumers (33 percent) and one quarter of UK consumers (23 percent) said they would be inconvenienced by this.”

Look through a random sampling of credit union trade publications and count the stories about branch remodels – you’ll see lots.  Why? Is this even an issue anymore?

What are you doing to make your app distinctive? Unique? How many stories have you seen about that?

None, right.

Can you in fact do anything at all or is an app shoved down your institutional throat by a vendor and you can take it or leave it?

Hold that thought.

Chew on this Marqeta finding: “69% of Americans expect to use their mobile banking app regularly in the next three months, while just 30% expect to visit a physical bank branch.”

Personally I do not plan to visit a branch and in fact the only times I set foot in a branch is when I am wearing my reporter hat and want to experience a branch first hand or when something has gone terribly wrong with my account and I am in the branch to shake things up.

Incidentally, Marqeta data say that fixing errors no longer is that compelling a reason for visiting a branch: “The physical branch didn’t even factor as important to consumers when they imagined having to fix an error that their bank had made: 28 percent of UK consumers and 23 percent of US consumers said it was important for them to be able to visit a bank in person to fix a problem, while 54 percent of US consumers and 51 percent of UK consumers said it was simply more important that it was fixed quickly, through whatever channel necessary.”

For 99% of us, 99% of the time there is no good reason to set foot in a branch. Ever.

I urge you to open an account with Chase or Capital One or USAA.  Feast on their mobile apps and ask yourself, is ours as good?

Spoiler alert: it isn’t.

Marqeta goes on to warn about the threat posed by digital only banks – sometimes called challenger banks – but I don’t see much threat there. Not to credit unions.

But I see enormous threats from the mega banks with IT budgets bigger than the GDP of mid sized countries and when they go out to hire developers they look for people with strong consumer app experience, that is, people good at writing code that engages people and creates a fun experience.

Has anybody, other than the salesman who sold you your mobile app, ever described it as fun or engaging?

What can you do to make your mobile app your app?

Sure. I know a handful of very big credit unions – think over $5 billion – have custom mobile banking apps.  

Good for them but what can the vast majority of credit unions, with much less resources, do to compete in today’s digital world?

That has become the critical question and it’s now a matter of life and death.

Forget the branch, it’s the app that matters – CUInsight http://bit.ly/37ehUa4

by Robert McGarvey

It’s that time of year: wherever I fly to it’s as though the plane is a sick ward or so it seems amid the coughs and sneezes that fill the air. The question is: can flying make you sick?

I ask the same question in church, at theaters, wherever I will sit for an hour or three amid people who are coughing. But I especially ask it on planes because the quarters are snug, the air is recirculated, and at one point I kept track of diseases and my flying and it honestly seemed that about half the time I in fact came down with a cold or flu after flights in the prime cold and flu season. Was this in my mind? Or do we in fact expose ourselves to disease when we fly?

Understand, airlines can and sometimes do refuse to board an ill passenger. According to the World Health Organization, the judgment hinges on whether the passenger “is fit to travel, needs medical attention or presents a danger to other passengers and crew or to the safety of the aircraft.” The decision rests with the captain. And of course we all remember flying with obviously ill people so enforcement of this right to exclude is not consistent. I do not personally know anybody who has been denied boarding due to illness, at least nobody has told me they have been and people tell me all manner of airline horror stories, just not one about exclusion due to illness.

Also know that airplanes are filthy in many instances. Travelmath sent a microbiologist to collect samples from five airports and four flights and it reported “airports and airplanes are dirtier than your home .”

It elaborated: “Surprisingly, it is the one surface that our food rests on – the tray table – that was the dirtiest of all the locations and surfaces tested. Since this could provide bacteria direct transmission to your mouth, a clear takeaway from this is to eliminate any direct contact your food has with the tray table.”

Canadian Broadcasting Corporation, in a broader study, concluded similar. But it found that the headrest is the most contaminated item on a plane.

It added: “the most concerning finding…was E. coli bacteria detected on both the seat pocket and the headrest. The presence of E. coli indicates fecal contamination, and the bacteria can cause intestinal infections, with symptoms that can include diarrhea, vomiting and abdominal pain.”

It is a very good idea to bring wipes on a flight and to wipe down the tray table, headrest, and the arm rests. Sure, you may look kooky to fellow passengers – but you are disinfecting and they probably aren’t. Who’s more likely to get sick?

And be meticulous about washing your hands.

The omnipresent airplane contamination sets the stage for the big question: if you fly on a plane with passengers suffering from infectious diseases (colds, flus, etc) are you likely to get sick? Researchers have looked at exactly that question. Their paper starts this way: “With over 3 billion airline passengers annually, the inflight transmission of infectious diseases is an important global health concern. Over a dozen cases of inflight transmission of serious infections have been documented, and air travel can serve as a conduit for the rapid spread of newly emerging infections and pandemics.”

The upshot, per the Telegraph, is that it’s not our imagination that we can get sick because we flew: “if you are seated within a row or two seats of an infected passenger you have an 80 per cent chance of catching a bug.”

Another take-away: “the study showed that a sick cabin crew member was likely to infect an average of 4.6 passengers per flight, and that those seated in the middle and aisle seats, due to their proximity to crew, were at the greatest risk.”

Remember that: it’s not just fellow passengers but also crew who may be infectious.

Bottomline: you are not imagining that you caught a cold on your last flight – not if you were seated next to a cougher.

Can you protect yourself? If you can, change seats. Get yourself at a remove from a person you believe to be ill and that is buying yourself some better health because just about all research indicates that proximity is key in spreading diseases inflight.

Put aside the scare headlines and, really, flights are not that risky for our health, not even in cold and flu season. Take a few precautions and probably you’ll be fine – especially if you can keep a distance from obviously ill passengers and crew.

by Robert McGarvey

Name the single most important IT system in your credit union.

Spoiler alert: it’s not your core.  Not anymore.

Who says that? Mike Hatch, a VP and national sales manager at Finastra, and a core expert. Hatch knows the core is crucial but he also believes that it’s the institution’s digital orientation that will shape its future.

Core is part of that.

But it is not the end all.

Another question: is your core system holding your institution back? Can you easily – and inexpensively – integrate cool fintech technology into your core?

Say no and you are telling the truth.

But it’s the wrong answer. You want an open core that lets you deliver the tech your members want.

Credit unions are looking for ways to be different, says Hatch. An open core helps there.

Think cores are boring?  You won’t think this podcast is boring – and you just may find yourself wondering if now is the time to initiate a core conversion.

Scary? You bet. But going out of business is scarier.

Listen up here.

This is one of a half dozen podcasts recorded at Finastra Community Markets in Chicago, October 2019.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

Can your cybersecurity keep hackers at bay?

Can cybersecurity be used as a marketing tool by a credit union?

Can a banker in fact become a credit union executive?

For answers, listen to this podcast with Daniel Ford, CIO at Jovia, a $3+ billion credit union on Long Island that you probably know as NEFCU.  The rebranding occurred a month ago.

Ford joined NEFCU via First Source Bank in South Bend (IN), where he was  the chief information officer, responsible for infrastructure, cybersecurity, and application development.  We asked him bluntly: can a banker in fact fit into a credit union’s philosophy?  You can guess his answer but give it a full listen. He makes points to remember.

Podcasts in this series that explore bankers and credit unions include Jim Blaine, Bucky Sebastian, Gary Oakland, and Marc Schaefer. 

Ford also talks, at length, about what a CIO needs to do to stay on top of cybersecurity and also how to work with vendors.

As for using cybersecurity as a marketing tool, don’t be too quick to say no way. Ford offers a tactic that just might work. Of course you want to hear that.

Listen to the Ford podcast here.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

LISTEN HERE

by Robert McGarvey

Just when you perhaps thought it safe to shrug off flygskam – aka flight shaming – a new investor note out of Citigroup is a slap in the face. The Citi bottomline: this stuff is serious and it will impact you.

Per Bloomberg, “The cost of offsetting planes’ carbon emissions could become as much as 10 times higher than the airline industry currently estimates, Citi analysts including Mark Manduca said in a note on Wednesday. For economy seats alone, the cost could balloon to $3.8 billion a year by 2025, hurting airlines’ earnings, they said.”

Germany, meantime, is boosting carbon taxes on air travel by as much as 75% in 2020.

Sweden has had a tax for over a year.

Other nations will follow.

At least some men apparently have a problem accepting Greta Thunberg, the Swedish teen who has become the poster person for the flygskam movement, but face up to the fact that we have significant environmental issues that need dealing with. And air travel is part of the problem.

Yes, I know there are political figures who don’t see matters this way and, no, I don’t care what they think anymore than I care what flat earthers or anti-vaxxers think.

Besides, the Citi note changes the equation. What it says is that flygskam is no longer a fringe issue, that in fact it will impact all of us who climb on airplanes.

The Bloomberg piece continued: “‘The so-called winners of this generational shift will likely be the rail operators, governments, forest owners and carbon schemes,’ the Citi analysts said.”

Meantime, at least some researchers are saying airlines should be coerced into ending frequent flier mile awards mainly because this causes bad behaviors. Suggested one report on its list of recommended actions: “Introduce regulation to ban frequent flyer reward schemes that stimulate demand. “

Do I think we will soon see a drop in business travel via air? I see companies trimming the number of trips – and making contributions to carbon offset funds. I also see companies nudging more of us to climb behind the wheel of our cars or, even better, hopping on a train (read this Chris Barnett column on the glory of train travel in Canada).

Mainly, though, I see business travel carrying on – there will be reductions in the number of flights, very possibly some private plane shaming (said to produce 10x more carbon per passenger than commercial planes), and many companies will mount PR campaigns to highlight the good they will tell us they do for the environment.

Frequent business flyers – who log 6+ trips per year – individually produce a staggering 3.1 tons of carbon annually. There will be pressure to reduce that number and there will be public shaming. When everytime you say you are off on a trip, a child or grandchild sends you a photo of a starving polar bear, at some point you will cut back.

But that will be small changes to what I think may soon become a cataclysmic impact on leisure travel.

With business travel there are rationales – it is good for the economy, creates jobs, spreads the wealth, etc.

With leisure travel, good luck with the hunt for defenses.

Reported the New York Times: “Our climate just can’t tolerate widespread frequent flying,” said Dan Rutherford, a director at the International Council on Clean Transportation . “At some level we need to figure out, collectively, which flights are necessary, and which are luxuries.”

Leisure fights, they are talking about you.

Have you ever whimsically hopped on a plane from Newark to Madrid, mainly because the price was so low and it’d been a while since you toured the Prado? I have (it’s one of my personal favorite trips of all time) and I have impulsively flown across the Atlantic to Dublin, also to Berlin, many times to both in fact.

How cool was it when you are asked how was your weekend and the answer is, ah, the Guinness was grander on the banks of the River Liffey.

And now you just may get booed or mocked, maybe bombarded with skinny polar bear pix.

The days of impulsively flying 3000 miles to start a four day weekend are over.

Face reality: when the Wall Street guys go bearish on air travel because of carbon concerns, it’s time for a rethink. And the real question now has to be: Do I need to go? The other question: Do I have to fly? And in 2019 expect to hear as many no’s as yesses.

Credit unions and their cooperative path to success – CUInsight http://bit.ly/2RBM9PI

by Robert McGarvey

Online fraud in the aviation sector is up – by a lot. 61% to use the number offered by Forter. “The fraud prevention specialist says the rise can be attributed to loyalty programs as well as data breaches, such as that suffered by British Airways just over a year ago,” reports Phocuswire.

Last week I reported that airlines were doing better than hotels in fighting cybercriminals. But just maybe the fortunes of airlines have shifted from positive to a shambles. Forter’s new numbers tell the sad story.

What’s stunning is that in 2018 fraud attacks on the airline industry in fact went down, 28%.

However, Forter plainly said this was no cause for joy. In its report the company noted: “This indicates that the large data hacks within the industry, some of which made passport information available along with other stolen data, have yet to be reused to commit air travel fraud. This data is valuable enough to be leveraged for fully fledged identity theft (which may have many stages) rather than ‘thrown away’ on a single fraud attempt.”

That prophecy has come true in 2019 with the steep jump in airline fraud – particularly involving miles and loyalty, according to the just released numbers.

Forter especially highlighted this fraud in its most recent fraud index: “Loyalty fraud increased by 89% year over year, while the total dollar amount in online fraud increased by 12% year over year. “

In some respects this is not exactly news. As I wrote last week, “Loyalty programs have for some years been hacker targets. ” The reasons are plain. Most of us are lax about keeping tabs on loyalty accounts and the miles and points are easy for a thief to turn into cash equivalents. Airline tickets are always salable – but so are airline points and miles because they readily convert to air travel.

Loyalty programs are especially vulnerable because companies strive to deliver a frictionless experience – and where there is no friction, generally the on ramp for fraudsters is that much more welcoming.

Said Forter: “As a result, loyalty point programs become more vulnerable to opportunistic fraudsters. Points accrued in a customer’s account are treated like digital goods — redemption is wholly conducted online, and requires no stolen credit card information to execute. Fraudsters are thereby able to leverage these points as ‘free’ funding sources and given the minimal
mitigation efforts by merchants, are able to consistently do damage without raising suspicions.”

The massive BA breach of course fueled much of the jump in airline related fraud. About 500,000 customer details were harvested in the breach.

Land travel incidentally also saw a jump in fraud, up 38%. Said Forter: “This increase is attributed to the fact that car rentals and ride services apply less friction in their platforms (ease of pick up in parking, no ID required, etc.), in order to remain competitive in the market and for the perceived better customer experience. The push for an excellent and friction-free customer experience has created vulnerabilities in these platforms, which fraudsters have been targeting.”

Protecting your accounts – especially your loyalty accounts – is squarely on you. Regularly check balances and, hey, I know it’s tempting not to bother until you want to cash in miles but wait until then and when you look, the miles may be gone.

Now also is a good time to log into any car rental accounts you have. Ditto Uber, Lyft, etc.

Focus in on the loyalty accounts because that’s where fraudsters are hunting. Personally I have in the past couple weeks set up new, complex passwords and I have also set up four airline accounts to work on biometrics. The goal: to never actually input the password and always to use the biometrics.

What to do if miles have in fact been pilfered from an airline account?Prepare for what may turn out to be a prolonged battle. Particularly when many months have elapsed between when a theft occurs and when it’s reported, some airlines are proving to be stubborn about restoring miles. You may get them, you may not, and a real key to success is quick notification on your part.

Which bring us back to our core advice to regularly check balances. How often is good enough? Personally I aim now for once monthly. You may check more frequently with high balance accounts, you may want less frequently with low balance accounts.

But know it’s up to you. Use a very strong password, use biometrics, and stay aware of account activity.

That’s how to protect what is yours. Because – plainly – it’s on you because you can’t depend on the airlines’ defenses.

Will your superior teller experiences guarantee your future?

Believe that and – probably – you won’t want to hear this podcast on the rise of the digital first member.  That member may occasionally step into a branch but usually they are unhappy. They would rather interact online.

And their numbers are growing.

Smart institutions know this.  A Chase – in its heart – is now a technology company.  Are you?

In this podcast, Jeff Bender – vice president, digital solutions at Diebold Nixdorf – tells about the future of banking as he sees it. And he sees a lot of digital.

Word of advice: bet now on cardless ATM access. That, says Bender, is the next must offer.

Bender also warns about offering a generic, off the peg digital experience. Do all your competitors offer the same mobile banking app as you? Think again if that’s true.  “Find ways to personalize, to differentiate,” says Bender.

And keep thinking digitally. It is the future and it is now.

Listen to Bender here.

This podcast Bender mentions Partners FCU and its digital journey. For my take on Partners FCU, read this.

This podcast is one of a group of four recorded on site at the Diebold Nixdorf DN Intersect conference in Las Vegas, September 2019.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

By Robert McGarvey

Is Hong Kong safe? Seeing that headline in a travel publication I almost spit my coffee on the computer screen.

Understand, I would go to Hong Kong without hesitation.  There are places I would avoid – including the airport, on some days – but Hong Kong remains one of the safest cities I have spent time in.  

There are many very, very dangerous cities on this planet – many I would not want to go to – but in making such judgments I always remember that from 1973-1975 and again in 1977 I lived in Washington DC which at the time was a perennial contender for murder capital of the nation.  Was DC dangerous? Sure. Was I fearful? Nope.  I stuck in neighborhoods I believed to be safe and I was never a victim.

I also spent many nights in Belfast, Northern Ireland in the period 1989 to 2005 and were people murdered there? Personally, though, I again never felt frightened, never was a victim.  I was careful about where I went and I was very careful about my comportment (it would have been unwise to walk the Shankhill Road at night singing IRA songs). But with a modicum of prudence and discipline I found Belfast a pleasant place to spend time.

So I take sweeping characterizations of cities with a bit of suspicion.

But you want a crib sheet of cities to avoid? A starting point is this list of the most dangerous cities, according to the World Population Review.  

The worst 10:

Los Cabos

Caracas

Acapulco

Natal

Tijuana

La Paz

Fortaleza

Ciudad Victoria

Ciudad Guayana

How many have you been to?  Hell, I don’t even know where some are (Ciudad Victoria?).  I have been to Acapulco and Tijuana, and thought briefly about going to La Paz but never did.  The others hold no charm for me and probably not for many other travelers. 

The only city on the list that I have spent much time in is New Orleans and, you bet, it’s dangerous – but pick your places and I never felt frightened there, never was a victim, and I have walked a fair amount from the French Quarter through the Central Business District, at various hours of the night.

Pick your places, pick your routes, and for me that is a formula for safety. Guaranteed? Of course not.  But it’s gotten me through a half century of walking.

Along the way I also learned to disregard broadbrush labels. I use the same awareness in Phoenix as I did in Washington DC 40 years ago.  And I’d use the same awareness walking around Moscow…or Los Cabos…or Notting Hill.

As for the safest cities, the Economist offers up its list and, buckle up, here are the top five for personal security:

Singapore

Copenhagen

Hong Kong

Tokyo

Wellington

Yes, you read right. Hong Kong claims the third slot (and of course this list was compiled before the recent protests). Sure, the protests and the government reactions have complicated the formulas and expectations. But I’d still bet heavily I could walk for hours in Hong Kong and would encounter no threats.

You want to know where else is safe? Across multiple safety parameters (including digital, infrastructure, personal security), here are the top five cities per The Economist:

1. Tokyo

2. Singapore

3. Osaka

4. Amsterdam

5. Sydney

But I still think most places are safe enough. Use your eyes, use your ears and probably you will be safe.  When I don’t like how a specific neighborhood looks, I make haste to exit in search of safer ground.  

Back to where we started: is Hong Kong safe? Definitely a person could go to Hong Kong and have a very high risk stay.  Head for wherever the nearest largescale demonstration is and that will be a wish granted.

Me, I’d head in the opposite direction.  And I’m pretty sure I’d stay safe.

Hong Kong is too dangerous? Rubbish. That’s hysterical thinking, rather like saying Paris is too dangerous or New York is. Keep your wits about you and cities like that are usually very safe.

At least that has been my experience.

One site to rule them all.

This is the banking version of the Tolkien quest for the one ring that rules them all.

Call this open banking and remember that phrase. It’s about to get much buzzier and louder over the next year as open banking transforms how US financial institutions interact.

Scott Anderson, brand evangelist at Diebold Nixdorf, sat down at the company’s DN Intersect event to tell us why open banking – a big issue in Europe – is heading your way.  

Imagine one site where your member sees everything financial. Inside the credit union and outside.  Imagine a site where the consumer can decide what to use to pay for this purchase in this moment.

How cool is that?

It’s also potentially frightening to financial institutions.  The institution ceases to be a walled garden and becomes instead an open transit point. Won’t consumers flee?

Why should they? If their needs are getting served.

In many ways Anderson is optimistic about the impacts of open banking – which definitely is coming our way – on smaller FIs such as credit unions.  

One hitch however. How do credit unions get enough data to play meaningfully in this universe?  Anderson sees credit unions working in alliances with fintechs – CUSOs perhaps – to create an even playing field with big banks when it comes to open banking.

Just maybe it’s the biggest FIs that have the most to lose in an open banking universe.

Listen here

Think on that and think about how to win your institution’s share.

This podcast is one of a group of four recorded on site at the Diebold Nixdorf DN Intersect conference in Las Vegas, September 2019.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto