credit union

by Robert McGarvey

Every day there are four data breaches. And every year literally of billions of dollars are lost in various frauds that are fed by the data stolen in breaches.  Who pays the bulk of that loss? Financial institutions, says Jim Van Dyke, founder of Breach Clarity, an innovative company that wants to shed a bright light on the breaches themselves but also what any given breach means for this consumer.

Generally there’s enormous opacity around breaches. Most organizations are slow to divulge details – and that makes it difficult for a consumer to decide on an appropriate action plan.

Breach Clarity aims to shine a spotlight on the breaches but also to tell consumers what steps they need to take to protect themselves.

Note: this is not a LifeLock type company.  Breach Clarity is about research and personalized prescriptions that in many cases the consumer will take him- or herself, often in association with a participating financial institution.

Key to Breach Clarity is that its business plan involved signing up financial institutions who in turn will offer the service to their customers and members.  It is not a direct to consumer play.

Another key: for now Breach Clarity’s focus is on signing up credit unions in particular.  The member focus, says Van Dyke, makes Breach Clarity a tool that credit unions will want to offer members.

And a benefit is that Breach Clarity may well reduce a credit union’s fraud losses and also call center costs associated with breached members.

The first Breach Clarity customer is BCU (nee Baxter Credit Union).   Check out a recent CUBroadcast show featuring Van Dyke and BCU’s Carey Price.  

BCU forecasts its ROI on Breach Clarity will be 5x.

By the way, if Van Dyke’s name seems familiar it is because it should be. He was a co-founder of Javelin, a strategy and research firm focused on financial services.  In a spot check, I found I cited Javelin research and opinions 61 times when I wrote for CUTimes.  That’s a lot.

Check the Breach Clarity database for credit unions and there are 39 breaches. Is your FI on the list?

Don’ be lulled by that small number, Van Dyke warns.  Few credit unions are breached – buy they still are where much fraud shows up, using data stolen in other breaches.

Listen up.

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

And like this podcast on whatever service you use to stream it. That matters.

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

Sit back and listen. Over the next 45 minutes what you will hear is how a data geek thinks because Karan Bhalla, CEO of CU Rise, will show you.

I did not ask Bhalla to do a demo.  This just is what he does.

Show him a pile of data – it could be anything: from your Safeway grocery receipts for last year through a credit union’s auto loan portfolio – and Bhalla will begin sifting, searching for the meaning in the data.

Think like a quant, he says, and quant is Wall Street slang for a math maestro.  Quants gave us securitized mortgages – “we had no idea how much people would lie,” a quant who played a role in developing that instrument told me some years back.

But a quant like Bhalla can help a credit union figure out how to make more and better car loans and, get this, a quant can even help a credit union figure out which borrowers who are veering into default are most likely to pay up if contacted by the credit union.

Don’t miss Bhalla’s CU Compare which lets a credit union compare its performance metrics to a competitors or a group of competitors.  At what price? Free for the basic service (add-ons with fees are available but Bhalla says the basic version is very rich).

Bhalla has been in data analytics for many years and, he says, the biggest change is that nowadays credit unions of just about all sizes want to make data analytics work for them.  Used to be only the big institutions had an interest. Now institutions of all sizes recognize that data is what paves the path to prosperity.

In this podcast Bhalla offers tips on how to get started but he also talks about how to go ever deeper.

Quants rule – you will be a believer before the podcast ends.

Listen up.

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

And like this podcast on whatever service you use to stream it. That matters.

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

Just when you thought ATMs had to be going down for the count—and, honestly, who didn’t think that as the pandemic took hold?—the rumbling is loud that ATMs are emerging as a low cost branch replacement option.

Understand, too, that closure of bank branches is on a fast track. Pymnts forecasts that some 20,000 bank branches will close by year-end, mainly because many of us have shifted our banking to digital channels and correspondingly have cut back on branch visits. Personally, I cannot remember the last time I was in a branch. Recently, when I walked by the branch I had very occasionally visited, it had plywood on the windows and doors and a notice that it was closed.

Michael Perito, regional bank analyst for Keefe Bruyette & Woods, a New York investment bank, is on record saying that there needs to be closures of perhaps 20 to 30% of branches—“and that’s a conservative estimate.”

Sure, credit unions are unlikely to close as many branches as banks will because the industry is not over-branched the way money center banks in particular are. There will, however, be closures of credit union branches in neighborhoods where they are not demonstrating there is a need. And other branches will close as institutions “right size” branches from yesteryear’s 3,000+ sf to under 1,000sf (and often just a single teller line, down from the four to eight of yesteryear).

Call this a big branch rethink where what will emerge is the branch of tomorrow. Few believe credit union branches are disappearing. But many think that tomorrow’s branches will make much more use of self-service tools and technologies.

Continued at CU2.0

 by Robert McGarvey

Ask Ray Crouse, CEO of the roughly $250 million in assets Parsons Federal Credit Union, if he is helming an endangered institution and be ready to get an earful.

Crouse well knows the NCUA data that show big credit unions growing (ones over $1 billion in assets) while little credit unions, and Parsons counts as small in many metrics, are struggling for air.

But Crouse does not see Parsons as endangered.

A few years ago, Crouse and the board explored how big Parsons FCU needed to be to be secure and the number that came back was $350 million.  That is now the five year growth target and it obviously falls far short of the $1 billion minimum size some seers throw out for credit union survival.

But Crouse is confident the number will works fine for Parsons. 

A big part of the reason is that Parsons is an unusual institution. It still primarily serves a single SEG (engineering company Parsons), it has just two branches (Pasadena, CA and Centreville VA), it has just three ATMs (but it belongs to CO-OP’s ATM network and also reimburses members for any fees incurred in using out of network ATMs), and member appearances at branches are rare. It’s an institution that went online and digital before Covid and that’s because the bulk of the members are engineers and people accustomed to being around engineers.

Parsons has just 22 employees.  Some credit union half its size have twice as many employees.

In this podcast you will hear why Crouse is confident of survival and you will also hear how to well serve members in a contactless context.

There’s a grumble about NCUA’s demands on board members.

And Crouse also tells that Parsons is open to a merger but is in no rush and, first and foremost, needs to find a group that will be compatible with the Parsons engineering employees.

This could have been a woe is me, downbeat discussion about managing a credit union in an era of vanishing loan interest rates. It’s anything but.  Crouse is upbeat. You will be too when you listen.

Want more Crouse? Listen to the CU2.0 Mastermind podcast – he’s one of the guests.

Listen up.

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

And like this podcast on whatever service you use to stream it. That matters.

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

Lee Wetherington, director of strategic insight at Jack Henry, the big core maker (Symitar is theirs), has a picture in his head of the path to success for tomorrow’s credit unions.  Picture yourself as a platform, he says, and, yes, a platform company is Amazon, for instance, and what makes Amazon a platform is that it creates an environment where many other vendors can also sell and consumers in turn can reap the benefits of choice and keen prices.

How’s that apply to credit unions? Wetherington sees the credit union as a platform where the best, most useful finech tools are aggregated to best serve an institution’s members. The credit unions with the best tools win.

A necessary ingredient in this equation: core systems that provide an open environment that allows for reasonably easy and inexpensive integration of third party tools and, yes, some core providers maintained rather closed universes. But that just won’t work going forward, insists Wetherington.

Buckle up because Wetherington has more big ideas to throw your way. He says, for instance, that early in 2021 Google will unveil a powerful suite of banking tools that will be free to credit unions to offer to their members. But he calls it a Faustian bargain. That’s because what Google wants is the data of the members and although Google says it will not ask credit unions for access to the data, it has another route to getting it. In the podcast, Wetherington tells how.

There’s also a provocative discussion of cores in the cloud.  Accept that that is the future and, actually, it’s better that way for most institutions.

By the way, Wetherington is adamant that core systems are a lasting part of the financial services universe. But he tweaks that by explaining that nowadays cores come in many different forms, with many different capabilities.  

It’s a wide ranging podcast.  Hop aboard for a voyage into tomorrow and your credit union.

In this podcast mention is made of a 2000 article I wrote for MITs Technology Review magazine. There’s a link to the interviews with Google’s founders in the show notes.

There’s also a link to a 2012 article I wrote on Google and its introduction at the 2012 Money2020 show of a predecessor to the banking tools it now is about to unveil. 

A third link is to a Google video on its banking tools.  Watch it.

A fourth link is to a story I wrote on neo bank Lili.

Listen up.

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

And like this podcast on whatever service you use to stream it. That matters.

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

Are credit union members healthier?

The $3 billion Colorado based Canvas Credit Union knows the answer for its members – and the answer is that they are.

That’s because, Canvas, working with Filene, compiled data that looked at the health of its members versus average Coloradans along three fronts: financial, social, and health.  The verdict is that Canvas members score higher on all three fronts.

That, said Tansley Stearns, guest for this podcast and chief people and strategy officer at Canvas, is excellent news – both for the members themselves but also for the credit union.

That is because she believes that the brands that win over the next 10 years are the brands that consumers believe advance their health.

Stearns hopes that other credit unions do similar research and if there is a pattern where credit unions collectively boost members’ health think about the power of that messaging in getting across the credit union difference.

Doing good by members just may be the credit union ticket to ride to competitive success.

Learn more about this in this lively podcast.  

If this podcast leaves you wanting to hear more from Stearns, watch her CUBroadcast segment on this topic here.  It’s a lively 12 minutes.

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

And like this podcast on whatever service you use to stream it. That matters.

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

Just when you thought business couldn’t get tougher—most credit unions now are wrestling with collapsing loan revenues as interest rates continue to tumble. And yet, more non-bank competitors enter the fray.

Sure, some experts shrug them off. The ABA Banking Journal, in a recent story about the rise of non-banks, features this quotation: “‘I saw the other day that I can get a bank account with T-Mobile or something, but I don’t want to bank with T-Mobile—I just can’t imagine that there will be millions and millions of American that are,’ remarks Canapi Ventures partner Walker Forehand.”

I can imagine it and my advice to you is do likewise. You do not have to open a T-Mobile banking account. But work at understanding why some of your members will.

And it’s not just T-Mobile. Suddenly, everybody from neo bank Lili—featured in this CU2.0 write up—and of course Apple (with Apple Pay and Apple Card) is plunging into banking.

Continued at CU2.0

by Robert McGarvey 

Suddenly a lot of credit union CEO eyes are turned to small business as the financial institutions hunt for ways to bring in profitable business.

And credit unions – many of which have been especially active in PPP lending – are finding that small business is receptive to their overture. The money center banks often are indifferent to small businesses and community banks often lag in the tech tools small businesses want in a financial institution.

Monit, a new cashflow management app for small businesses, just may be the tool that helps bring in more small business members.  

Monit is not in any app stores, it is only available to members and customers of financial institutions that are Monit customers, said Steve Dow, Monit CEO. The Monit app is customized to resemble the credit union’s.

Dow added that Bank of America lately has made much of its Cash Flow Monitor for small business – but Monit puts a similar tool set in the hands of small business users at credit unions and community banks.

What Monit does is monitor key financial numbers for the small business and it also forecasts cashflow.

For the credit union, additional tools are offered. For instance, a credit union can see exactly what share of wallet it has of small business members.  Note: that data is anonymized except for small businesses that explicitly opt to disclose their data.

Monit will also help a credit union find targeted lending opportunities so that more efficient and effective offers can be made.

How Monit works is that it ties into the accounting software used by the member – often Quickbooks. Monit does not require integration into the credit union’s core.

In the podcast Dow explained the benefits for both the small business and the credit union with Monit.

He also talked at length about Monit’s PPP related tools which will prove newly useful in the fresh wave of PPP lending.

Listen to the Dow podcast here.

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

And like this podcast on whatever service you use to stream it. That matters.

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

 Don’t you wish you knew when a member is about to pop down a Chase credit card to buy a pricey pair of Nikes – especially when you are prepared to offer a $5 discount just for using your institution’s credit card?

Just that is the thought that has powered the development of Mall IQ, a San Francisco and Istanbul based company that has won backing for FIS.  But Batu Sat, Mall IQ founder, acknowledged to us that the company’s ambitions go way beyond malls and it wants to connect financial institutions with customers and members wherever they are – high streets, car dealerships, furniture stores, and of course malls.

Mall IQ has digitized and mapped many shopping environments so it can know your member is in a Nike store and not a GAP. “We understand the floor plan” said Sat.

A member enrolls in the Mall IQ program through the credit unions’ mobile banking app.  That enables push notifications of deals, discounts, etc. when using the credit union’s card to make purchases.

“This is not spray and pray marketing,” said Sat.  

Mall IQ offers a one month trial of the product before a credit unions signs a contract.  

At a time when every credit union is hunting for new revenue streams, Mall IQ is coming along at an opportune time.

Check out how it works and what it does in this podcast.

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

And like this podcast on whatever service you use to stream it. That matters.

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

Call this the credit union Hamlet moment: To be or not to be, that is the 2021 question around the future of branches.

Suddenly, amid the pandemic, with many branches closed, many others open fewer hours, some credit unions requiring appointments for branch visits, and most credit unions reporting a surge in member use of digital banking tools, a question is getting asked that few expected.  “Some credit unions are asking if they need branches,” said Doug Brown, a senior vice president and GM of Digital Banking at NCR.  

Continued at CUInsight