Maybe it is a cockamamie pie in the sky of a dreamer’s idea.
Or maybe it is a key to showing the future relevance and importance of credit unions.
Focus on the target: solidifying the credit union reputation as the welcoming place for the presently unbanked – about 6% of us – and the underbanked, another 19% of us. That is one in four Americans who are ignored, wholly or in part, by traditional financial institutions.
USAlliance, a $2 billion credit union that has grown out of the legacy IBM employees credit union, wants to change that. And the vehicle is Bank Dora, a branchless neo-bank powered by an app (find it in Google Play and the Apple App Store). Or sign up here.
Admit it, there is something fundamentally pedestrian about collecting cashback rewards on credit cards. Sure, I remember, sort of, the odd $20, or was or $30?, that I got for using my Venmo credit card where the user can get 3% back on the primary spending category
On Discover, so far this year I have gotten $86, mainly with 5% back rewards and, yes, I had to check the account website. I knew I had gotten some money from Discover but had no real idea how much or little.
But I still remember, quite clearly, when a business associate cashed in enough American Airlines miles to claim a free trip to Egypt and of course the pyramids. That was in the early 1980s – he obviously was an early mileage savant – and I remember it all vividly. I also remember when a neighbor who studied the OAG cashed in miles for a free trip to Yugoslavia for himself and his girl friend in the early 1990s.
Color me envious.
What did I do with my Discover cash back? Huh? I have no idea. It just went into paying the next Discover bill.
But today I discovered a new and exciting credit card reward. Read on to find out what.
Nope, I am not advocating a full throttle return to a pursuit of airline miles. Regular readers of JoeSentMe know airline mileage is a treacherous game where the dealer sets all the rules and the rules do change. As far back as 2017 the belief has spread that airlines in fact make more money selling miles (mainly to big financial institutions) than they do seats. The math gets complicated and the disclosures are not full but the undisputed reality is that the system is flooded with miles that can be earned buying cat food and redeemed for flights. That system is not advantageous to any looking for free flights.
Airline miles are a kind of 21st century manifestation of Gresham’s law.
And, yes, I do remember I recently bought two roundrip comfort economy tix on Delta to Spain with miles. There remains availability. But that cost me 240,000 Amex Rewards miles plus a little cash. I am glad to save the money but can’t say I am thrilled with the exchange rate.
Fact is, I just am not thrilled or enthused about the pursuit of miles. Yes, I will toggle an Amex Offer if it brings me more miles for doing little or nothing. But I am not going to play the miles game, not in 2021. When airlines cease to publish an awards chart – as some now do – the pursuit becomes akin to searching for a black cat in a darkened room while wearing a blindfold.
If I have a pile of Amex miles and it’s easy to burn ’em buying a ticket I will.
But the thrill indeed is gone.
I scarcely track my United and AA miles anymore, in part because I have earned zero new miles from them in the past year. Boring.
What does give me thrills is that now I can collect Venmo rewards in Bitcoin. How cool is that?
For some time – years really – I have mulled plunging into Bitcoin but have kept my wallet zipped. Now Venmo has offered me a painless way to pay in Bitcoin and since, in my mind, the money is free, I have no anxieties about speculating in novel currencies.
If I decide crypto is too flaky, I can switch back to cash rewards on Venmo in a few clicks.
There are a half dozen more cards that now offer crypto as rewards. The list is here.
I used the Venmo card not necessarily because I am insisting it is the best but because it already was in my wallet and inside a minute of tapping around in the app I had it set up to pay my rewards in Bitcoin. Sometimes I like low barriers to entry and this was such a case.
For me the thrill in rewards just may be returning as now I get to join the bipolar excitement of the Bitcoin price rise and fall – even if my stake is a tiny fraction of one Bitcoin. Mightn’t crypto just turn out to be a flimflam? Uh…like rewards miles?
Early in this podcast you will realize that Alexey Krasnoriadtsev is a different kind of tech CEO. For starters, this is a podcast where you will not hear much – probably nothing – that sends you to Google to look up words you don’t understand. But the bigger difference is that this is a tech CEO who talks about why it’s important that users of technology feel loved by their tech, that credit unions and other financial institutions do right by their users (and Alexey backs that up by refusing to help efforts that don’t align with that philosophy), and who admits a lot of FI tech is blah – and he tells why that is so.
You know his work. In podcast 172 you heard about Bank Dora, the innovative neo-bank birthed by a credit union. BankingON worked on that project.
The core BankingON pursuit is creating new mobile banking apps and that means tools that do what the users want (rather than what the vendors and FIs want which is the norm).
Be prepared to be surprised, often in this podcast. Especially if you are a CIO or CTO who knows how fintech execs talk.
Alexey talks about his frustrations, his hopes, his dreams and why at day’s end he is a happy guy.
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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
Meet Dora. She just may change all that you think about mobile banking.
A product of USAlliance – a $2 billion credit union based in Rye, NY that happens to be the legacy IBM employees credit union – Dora is the first credit union attempt to create a so-called neo bank, that is a branchless institution with no bricks and mortar.
USAlliance has been joined in this effort by three other credit unions: Affinity Plus Federal Credit Union ($3.5B in assets) headquartered in St. Paul, Minn.; Digital Federal Credit Union ($9.8B in assets) in Marlborough, Mass.; Service Credit Union ($5B in assets) in Portsmouth, N.H.
It may be seeking others to join in helping to spread Dora which, presently, is aimed at low to moderate income Americans who may be underserved or unserved by traditional financial institutions.
Can Dora survive in a marketplace where there are heavily funded, venture backed competitors – Chime for instance?
In this podcast USAlliance CEO Kris VanBeek offers candid, honest history about how and why Dora got birthed and how he sees it succeeding.
He is candid that he does not see Dora as a big money maker for USAlliance. But he believes it will generate a little profit.
He also indicates that Dora is going after different consumers than a Chime, say. He anticipates that many of Dora’s accounts will carry low balances and the economics of running Dora will be unlike a Chime.
Want to find out about Dora? The app is available in the Apple App Store, also Google Play. Signing up for an account is shockingly fast and easy. And Dora’s checking is free.
In this podcast VanBeek gives a shout out to BankingOn which played a significant part in creating the app. Tune in to next week’s podcast which will be with BankingOn and how it sees the future of mobile banking (think better, slicker, easier to use apps and be ready to toss existing apps in the dustbin).
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
Irrelevance beckons. And it will swallow many credit unions whole.
That is the message delivered by Andre Iervolino, a longtime credit union senior staffer who wrote a provocative piece in The Financial Brand entitled “10 Factors That Will Determine Banks’ Future Relevance.”
Reading is article will rock you because, frankly, he is not optimistic about the future of many credit unions.
A core reason is that, often, they just don’t get that technology is rewriting the game book. What mattered 25 years ago does not count today.
In this podcast we explore the key takeaways of the article and the first is that the nature of a primary financial institution has changed and, said Iervolino, “Community financial institutions no longer compete only against the large banks within their marketplace, but also with big tech (Apple, Amazon, Google Checking, PayPal), fintechs, and neobank/mobile banks such as Chime, SoFi and Ally.”
He added: “On average, financial services customers have between five and eight relationships spread across multiple institutions, many of them not traditional banking providers.”
How do you compete against that complexity?
His second takeaway is remapping the future of the branch – think small footprint, cashless, staffed by Apple type geniuses and, yes, he tells how you will hire them. Hint: it involves paying a lot of money.
Next he throws the FICO score under the bus and proposes that credit unions adopt what he calls a Financial Health Score.
Along the way Iervolino offers key survival advice: Act like a startup.
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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
The language on the Finalytics.ai website is bold: “Our mission is simple: use technology to help financial institutions offer the same exceptional service they are known for in-branch, online. As digital commands a greater share of the customer touch, we are passionate about helping organizations grow and keep the promise of modern service excellence alive.”
Read that again.
For as long as I have been involved with credit unions, I have heard c-suite executives telling us that their differentiator is their people.
And then along came the pandemic. What difference do your people mean to the member who does not want to set foot in a branch and in fact wants to move the relationship entirely into the digital realm?
How do you deliver first rate member service through digital channels – and know that it can be done and in fact already is being done (think USAA and Chase)?
These are the questions that shape this podcast with the co-founders of Finalytics.ai, Craig McLaughlin,CEO, and Mark Ryan, chief analytics officer.
Along the way we explore why so many big data projects fizzled into failure at credit unions a decade ago and also why ai – artificial intelligence – is the engine that is reshaping financial services.
And note there are moments to be afraid. For instance: a generation ago your institution had maybe 10 or 20 competitors. Now it has thousands and many aren’t even credit unions or banks.
That’s not to suggest throwing in the towel. But you will have a fight on your hands.
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
The future of banking just may be voice – but that will probably mean talking with a computer. Already tens of millions of Bank of America customers use its Erica and that number is growing at a brisk rate.
It should be no surprise. Siri, Alexa and Google Assistant are part of many of our lives today. We talk with machines. We like talking with machines.
Question: how is a credit union to compete in this sphere.
Enter Finn AI, a conversational banking company formed precisely to address these needs for credit unions and community banks.
Already Finn AI has a couple credit union customers – BECU is one. And it is looking for more.
That’s why it has scheduled an October 6 virtual conversational banking summit, a half day devoted to giving credit union and bank execs the information they need to make decisions about AI and conversational banking.
If you can’t make the summit, sign up anyway and you’ll get a link so you can watch at a time more convenient for you.
Speakers include executives from Amazon, BECU, MX, United Federal Credit Union (also a Finn AI customer), and Kirk Drake, the founder of CU 2.0 and author of a book on AI.
In this podcast, with Finn AI CEO and co-founder Jake Tyler, you will hear more about the summit but you also will here about Finn AI’s tools, its pricing, and why Tyler is persuaded that conversational AI banking just is not a technology that can be ignored. It’s a candid discussion, tightly focused and to the point.
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
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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
I don’t recall the first time I wrote up a warning against using public Wi-Fi when traveling – and that means hotel, airport, restaurant, public transportation (subways, busses) coffee shop, even inflight Wi-Fi. Probably 10 years ago. Maybe longer.
And yet public Wi-Fi sites multiply – one count finds over a half billion globally. That’s because we use it. One survey found 18% of respondents use it more than once a day.
Definitely, too, usage is upped among travelers. When I ask people if they would use the public Wi-Fi up the street from their home the reaction displays similar enthusiasm to what I’d get if I asked their willingness to use a public toilet in the Covid-19 era. But those very same people, when asked, acknowledge they do use public Wi-fi when they travel because “what are my better options?”
We’ll answer that question momentarily – you do have a better option – but, first, understand I now have a heavyweight that is issuing the same stern warnings about public Wi-Fi as I have been. That’s the NSA – aka National Security Agency aka the Puzzle Palace — which now has broken its cover to warn about public Wi-Fi and the risks it poses to us and our employers.
In a recent information sheet, NSA pulls no punches: “Avoid connecting to public Wi-Fi, when possible, as there is an increased risk when using public Wi-Fi networks…. If users choose to connect to public Wi-Fi, they must take precautions. Data sent over public Wi-Fi—especially open public Wi-Fi that does not require a password to access— is vulnerable to theft or manipulation.”
What that says – put in simple terms – is don’t use public Wi-Fi because whatever data you enter is easy pickins for savvy cyber criminals.
Sure, if you want to grab a baseball score from ESPN, or a stock quote, by all means use public Wi-Fi if that’s easy. It probably doesn’t matter. But if what you want to do is send business email or access files on your company’s server or even research prospects on LinkedIn, the strong advice is don’t use public Wi-Fi.
There are thousands of white papers online documenting how hackers hack public Wi-Fi. For them it is rather straightforward. There even are automated tools to speed up the process for the inexpert hackers.
NSA elaborates: “Accessing public Wi-Fi hotspots may be convenient to catch up on work or check email, but public Wi-Fi is often not configured securely. Using these networks may make users’ data and devices more vulnerable to compromise, as cyber actors employ malicious access points, redirect to malicious websites, inject malicious proxies, and eavesdrop on network traffic.”
What the NSA is saying is that when you are using public Wi-Fi you are a fish in a transparent fish bowl and the hackers’ eyes are on your every keystroke. The password to your employer’s server – it’s theirs. The login to your email – it’s theirs. The login to your bank account – yep, that’s theirs too.
All because you took what seemed the easy – and free! – access lane onto the Internet Superhighway and that is what public Wi-Fi is for many millions of us.
What if public Wi-Fi truly is your best option? Here’s NSA’s advice: “If connecting to a public Wi-Fi network, NSA strongly advises using a personal or corporate-provided virtual private network (VPN) to encrypt the traffic.”
Not all VPNs are good. Not all are even trustworthy. Choose a VPN cautiously. Here’s a list of recommended providers from TechRadar. Here’s CNET’s list.
Won’t a VPN slow your speed? Probably, at least a little. But that is a price worth paying for the enhanced security a good VPN provides.
Even with a VPN in place NSA’s “don’t’s list” includes these about public Wi-Fi: *Do not enter most sensitive account passwords on sites/applications. *Avoid accessing personal data (e.g., bank accounts, medical, etc.).
That’s good, cautious advice.
Either way, if you really insist on using public Wi-Fi, do it with a VPN. You don’t have guaranteed safety. But you are pretty secure.
Personally, however, I still prefer to use my cellphone to create a hotspot that I connect an iPad or laptop to. The security is quite good.
Alternatively, since I use a Google Pixel phone on Google FI network, an option I have set up is to use a Google VPN when surfing via Wi-Fi. I use that feature often.
This is the reality: safer surfing is yours if you want it.
But with all the cyber criminals out there, just do something to stay safe.
Go to the website for Otomo and here’s what jumps out at you: “Be the money platform people love. Turn any account holder into an avid user with autonomous personal money management.”
Read it again.
What Otomo is about is a revolution in our digital money management and here is a fact: on a fundamental level, online and mobile banking are not substantially different from what debuted in the mid 1990s.
Another fact: PFMs are not significantly more engaging than they were when they were introduced a generation ago.
Otomo’s plan is to revolutionize all of that.
To rethink how we bank.
And, yes, to make it all much more engaging – and fun! – than we are accustomed to.
On its LinkedIn page, Otomo says about itself: “Picture a world where your money knows where to go as soon as it hits your bank account, organizing itself in real-time. Sounds like something out of Blade Runner? It’s not. “Otomo is delivering on banking’s ultimate promise of hyper-personalized cash management tools today. We deliver our service directly through your favorite financial institution or money app. In other words, you’ll quickly be able to offer smart banking that can provide engaging, long-lasting, and meaningful experiences to your customers.” Ready to hear more about the Otomo revolution? In this podcast you will hear at length from Khellar Crawford, CEO and co-founder of Otomo and you will also hear why he founded it and why your credit union just may wat to explore deploying it to your members. Face it? Members increasingly want more from their digital banking experience than they are getting. Otomo just may be what they are hunting. 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
Ask Kavita Singh – a vice president at payments company Payrailz – what’s a smart way to differentiate a credit union in a a competitive marketplace that is ever more cluttered and her answer is succinct: AI.
As she wrote in a recent Credit Union Times article, “Credit union leaders must go a step further and find a true strategic differentiator. This can be found via artificial intelligence.”
A few years ago AI was akin to The Matrix – kind of a cool but spacey idea and, truth to tell, none but the very biggest credit unions even had it on their “learn about” lists.
That’s changed.
AI is suddenly everywhere. Call your cellphone provider and a machine will answer. Ditto at the big credit card companies. Also airlines. And down a lengthening list of institutions that, increasingly, turn to machines to find information, answer customer questions, solve problems.
In Singh’s view, credit unions are ideally positioned to win at AI, mainly because they already have bushels of member data and that data, properly used, will tell how best to serve this member’s needs right now.
Singh gives this for instance: “For example, a member may pay a particular bill around a certain time of month. AI will learn this behavior and begin to proactively alert, or remind, members in advance of the pending bill.”
Think about that. A simple nudge may help save a member a late fee and that is a way to build member loyalty.
AI can also predict in advance when a member is about to bounce a check and that’s not black magic. It’s knowing the account balance and also knowing what bills are likely to come in soon and if the numbers don’t add up that member could be prodded to shift money from another place into an account to cover the incoming bills. That means more late fees saved.
Think too about how good companies like Amazon and Netflix have gotten about predicting what you want to consume next. They are not guessing. What they are doing is cranking in past consumer behavior and taking a very educated guess about what this consumer wants next.
AI is changing our lives and it will be a factor in what credit unions thrive (and which don’t).
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
