Bad times are coming at you. A recent Credit Union Times headline screamed: Preparing for COVID Loan Losses. The subhead multiplied the miseries: CUs are preparing for a wave of COVID-related loan losses, delinquencies, and bankruptcies.
Many credit unions will find their own futures in doubt. Some experts say 20% will close in the next few years.
You need new, sharp thoughts. Help!
What you need just may be a mastermind group.
Motivational writer Napoleon Hill spelled out why a mastermind group works magic in his book, Think and Grow Rich: “Analyze the record of any man who has accumulated a great fortune, and many of those who have accumulated modest fortunes, and you will find that they have either consciously, or unconsciously employed the ‘Master Mind’ principle.”
Wrote Hill: “It is a well-known fact that a group of electric batteries will provide more energy than a single battery. It is also a well-known fact that an individual battery will provide energy in proportion to the number and capacity of the cells it contains.”
“What could we do to make our members’ lives better?” That question, said Mark Shuiling, vice president of technology at $900 million Wildfire Credit Union in Saginaw, MI, is what set the institution on a quest to bring its members a unified, omnichannel banking experience. The quest began maybe five years ago.
It is now coming to fruition, with help from digital platform developer Backbase.
Here is the story of an institution that decided that digital was its future – if only because it is what the Millennials and Gen Z members of any credit union crave. These are people who grew up with personal computers at their sides and the younger ones cannot remember a time when they did not have an iPhone or Android phone in their hands.
When the COVID-19 pandemic hit, the wisdom of Wildfire’s decision became all the sharper, said Schuiling – it was suddenly obvious that digital is the future for all of us, simple as that.
Understand, Wildfire is just now beginning to roll out its new unified banking platform and it will do it deliberately, carefully, said Schuiling.
Know too that Wildfire is way ahead of most credit unions in its digital journey. Sure, just about every credit union executive pays lipservice to the idea of digital banking, but the stark reality is that few have climbed aboard this movement. That’s why Vince Bezemer, head of strategy for Backbase, which also has worked with Navy Federal, Schools First, and State Employees’ Credit Union of North Carolina, estimates that maybe 10% of financial institutions really get what it means to be digital.
No more cookie cutter solutions. And put a branch in the member’s hands with mobile tools that allow the member to do pretty much anything he/she could do in a branch.
When Wildfire, a $900 million credit union in Saginaw Michigan, set out on its omnichannel journey four or five years ago it dreamed big, says Mark Schuiling, VP of technology.
A lot of the process was doing hard thinking about what the institution wanted to be and what it wanted to provide members. From the start, however, Wildfire knew its future would be digital and it also wanted to provide members with a unified consumer experience, not the fragmented experience many credit unions offer because they have pasted together solutions provided by third party vendors.
At $900 million, however, and with only three programmers, Wildfire also knew it had to carefully pick a vendor and a tool that would suit its budget and its internal skills.
About a year ago, the process turned serious and Wildfire went all in on its digital transformation, working with Backbase as its technology partner.
This Wildfire podcast tells the story from the institution’s perspective and Wildfire candidly tells about its hopes, its challenge, and also why it now is going slow in the roll out of its omnichannel solutions to members (because it wants members to want the solution and to know they want it).
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It’s not just airplanes and airports where tempers run high over commandments to wear masks. Hotels increasingly are the prime battlefield.
That’s partly because the big four US carriers – Delta, United, American, Southwest – all have come around to requiring masks most of the time. Yes, they initially had hesitation but then a sanity prevailed centered around the realization that airlines live in a no masks, no passengers universe, that is, without a stated and largely enforced mask policy, airlines were facing acres of empty seats for months to come.
Hotels have talked the talk of requiring masks – but do they really walk the walk?
Understand: guests want masks in hotels. A survey for the American Hotel & Lodging Association found 87% of us want masked hotel employees and 85% want guests to be required to wear masks in pubic spaces.
That’s in line with the CDC which has loudly asked us to wear masks to slow the spread of Covid-19.
The big hotel operators – Marriott, IHG, Hyatt, Hilton, Best Western – all formally mandate masks for guests. But face reality: a mandate from corporate HQ is one thing. Compliance on the ground in tens of thousands of scattered hotels is entirely another thing.
Evidence mounts that mask refusal is not uncommon – how could we expect otherwise when the president is a mask refuser who sometimes even harasses mask wearers?
In hotels, tensions get raised on elevators, airport shuttles, restaurants, lobbies and also in the hotel gyms that are open.
I expect tensions to keep rising because there is a vocal minority that believes they have a right not to wear a mask. They have no such right but there’s really no way to argue them out of their entrenched position.
Meantime, the rest of us have rising reasons to wear masks and to want to see those around us compliant. That’s because the incidence of the virus keeps multiplying and now in fact seems to be ticking up again. We are approaching 190,000 US deaths and known infections now number 6.2 million. This virus is nowhere near under control in the US. And even if a vaccine miraculously is ready for distribution in late fall, the vast majority of us won’t take it, according to pollsters. I am all for vaccinations and in fact have already gotten this year’s flu shot but count me as a Covid vaccine skeptic. Rushed work plus political meddling is a recipe for a deadly vaccine. Count me out, at least until maybe 9 months of use have elapsed on any vaccine released this year. The majority of Americans seem to think similarly. That means the impact of any vaccination, assuming there is one later this year, will be small.
So we are back to needing masks and sanitary procedures (hand washing for instance) because that is all we have in our arsenal.
Some hotels, too, now believe that guests don’t give a hoot about star ratings – but they are focused on the emerging sanitation ratings. There’s probably truth to that. I don’t care nearly as much about the luxury metrics that star ratings seek to capture as I do about how my health might be impacted by a hotel stay.
Which brings us back to the willful non-compliers. How are hotels handling them? Chip Rogers, CEO of AH&LA, told Hotel News Now: “Right now, hotels are (navigating) it on an individual, case-by-case basis, similar to what they would do for smoking in the lobby when that was not allowed or, back in the old days, it was ‘no shirt, no shoes, no service.’ Those types of things, hotels have always dealt with.”
One problem: most of the staff is untrained when it comes to dealing with rude guests who choose to endanger the health of other guests by ignoring commonsense rules requiring masks in public places.
What frontline staff needs is a helping hand from management. When the Delta c-suite weighed in to support mask wearing – and to threaten non compliant passengers with a “no fly” penalty exclusion – the flight attendants got exactly the help they needed.
Other airlines followed and, by now, according to The Points Guy, 877 have been put on do not fly lists by seven US carriers. Delta leads with 270 banned. (American and Southwest did not provide counts.)
Similar should happen at the big, branded hotels. Where is Marriott’s do not stay list targeting non mask wearers? Where is Hilton’s? Admittedly, hotels don’t have as much clout as carriers (pity the Atlantan who lands on Delta’s list!). But there’s a definite sting in simply being banned from booking at any of a chain’s hotels.
Listen up, c-suiters: we are not staying in hotels if we don’t feel safe and if you don’t insist on mask wearing we won’t feel safe.
The health of your industry hinges on the health of the guests.
AH&LA’s Rogers gets this. As he told Hotel News Now, “What is important for the recovery of our industry, are those folks who are contemplating whether to book a stay in a hotel, and once they know that face coverings in public spaces are mandatory, you’re going to see the confidence level of consumers rise on this … that will ultimately lead to more guests and business activity.”
Mask up for our health and for the health of the hotel business.
For how many years have you heard about omnichannel banking – and you also know not many institution have done this more than pay lip service to an idea of the digital first financial institution.
About 90% of financial institutions in the US in fact fall very short of really getting omnichannel, says Vince Bezemer, head of strategy at Backbase, a digital platform provider with the tagline “Become the Bank that People Love.”
That means about 10% of US FIs are in fact digital first and of course that includes many of the biggest.
But it does not mean that credit unions can’t succeed in embracing a digital first strategy.
In fact now, in the Covid-19 era, many are going forward at high speed to become digital first.
As for Backbase’s pedigree, know that its clients include Navy Federal, State Employees Credit Union of North Carolina, and Schools First.
But Bezemer in this podcast stresses that Backbase has tools and services for smaller institutions too.
This podcast is Part 1 of a two part series on digital first. In this podcast Bezemer talks at length about what digital first means, why it is important, what institutions need to really do it, and why you don’t want to define your credit union with cookie cutter tools and apps that literally hundreds of other credit unions use.
In Part 2, you will hear from Wildfire Credit Union, a Backbase client that is deep into its transformation into a digital first institution. It’s a rare, candid look at what the process really is.
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Think twice – maybe thrice – before clicking post on that image of you in Merida with an icy margarita in one fist and a carnitas taco in the other.
Be similarly circumspect before posting that image of you sitting in the Ephesus stadium looking holy.
Or maybe you are in Belarus living out a LeCarre fantasy, dodging Karlas pro and anti government and you want to memorialize that moment with a Facebook post.
All three countries are on the short list of international destinations heartily welcoming US passport holders and, yes, it’s a list dotted with destinations you probably don’t want to go to (Tunisia anyone?).
At least there are places you can get in on hols but what you probably don’t want to do is publicly brag about any of this. Because we now have entered an era of travel shaming, a status corroborated by articles on the topic in both the New York Times and the Washington Post. Even trade pub Travel Weekly shrugs that travel shaming is on the rise.
The basic idea: there simply is something wrong about non essential travel in a global pandemic that already has killed 850,000 of us, will likely kill over one million by Thanksgiving, and where there is no end to the sickness and death in sight.
Add in the economic ruination in much of the globe – and especially in the US which has an economy that is the worst US economy in 90 years – and where hundreds of millions lack the money for proper shelter, medical care, and nutrition, it just seems the worst kind of flaunting to travel to luscious locations and brag about it in social media.
Sure, travel has always been about conspicuous consumption, a term coined by American economist Thorstein Veblin, and simply put means buying stuff to impress the Joneses and Smiths. You know about the dreaded 1950s vacation slideshows. But now social media – especially Facebook and Instagram – have made it terribly easy to post pix, even videos, from trips and we have responded by posting acres of the stuff.
But now is not the time. Post and you just may trigger a tidal wave of acrimony, accusing you of being an ugly American and worse. Indeed, two thirds of the 4000 of us surveyed in June by Ketchum, a PR agency, said they would judge travel content posted before such a trip was considered safe, according to the New York Times.
Half added they would self censor their posts to avoid travel shaming.
And just a year ago we were merrily posting our trips and expecting kudos from our neighbors and friends.
What a difference a year makes.
But there was a hint this might happen, even pre Covid 19. About a year ago flygskam entered the public conversation and that’s flight shaming, a movement embraced by Greta Thunberg, a Swedish teenager. The pitch is that the eco consequences of non essential flying – global warming for instance – make it justified to pillory those who fly. And so posts about long trips suddenly were met not with envy but with calumny and shaming.
There’s now a doubling down on the wrongness of non essential travel and thus we have entered the era of travel shaming.
The more exotic and distant the trip, the more the travel shame. Live in Phoenix and post pix of the Grand Canyon and you just may escape travel shame. It’s an instate national park – outdoors!
But post photos of you cavorting on the beaches in Brazil and buckle up because the brickbats are heading your way.
What’s wrong with distant travel? Partly it’s driven by a belief that our non essential travel endangers locals in the region we travel too – and then endangers those in our environs when we return home. The CDC puts it plainly: “Travel increases your chance of getting and spreading COVID-19. Staying home is the best way to protect yourself and others from COVID-19.“
Partly too it’s just that a lot of us are plain angry about lots of things – so why not diss an acquaintance about an exotic, non essential trip?
And really there’s also the reality that non essential travel is, uh, unnecessary so just don’t do it right now.
What are your choices? Don’t travel and avoid the shaming potential.
Travel, post and suck up the abuse. You’ll survive it.
Or – and this is my preference – just don’t post images of the trip. I rarely have even pre Covid-19. You’ve read the stories, social media posts bring thieves to your door. I have long believed that’s true. So I rarely have posted personal travel photos. I didn’t pre Covid. I don’t in the pandemic. And I won’t afterwards.
I have not traveled in the Covid-19 era but if I had, you wouldn’t know about it.
Paul Ablack knows big data and fintechs. He served as CEO at OnApproach, a big data company aimed at credit unions that was acquired by Trellance.
Ablack left OnApproach after the acquisition and is now noodling new opportunities in fintechs and especially in commercial lending for deposit rich credit unions. In that latter regard he is bullish on what he sees as major opportunities in lending for new senior care facilities and, yes, that industry has taken a beating in the Covid-19 era but that, too, may well fuel the need for new, more smartly designed senior care facilities.
The need for senior care will only grow for some years to come as Baby Boomers age (and the oldest Boomers are now 74, the youngest 56).
Throughout, Ablack sees unique opportunities for credit unions, in part because of their cooperative character. If enough credit unions share data, a powerful big data lake would be an industry asset that will help credit unions compete with the biggest banks.
If credit unions come together into what Ablack sees as a Venture Capital CUSO that manages many fintech investments, big successes could come to the movement, he said, where today’s piecemeal, every credit union for itself fintech investing produces scattershot successes.
Bold thinking? You bet. That’s why Ablack is a fun podcast guest. He throws out a number of good ideas you may not have heard before.
Covid-19 is triggering huge changes in financial services. Tomorrow’s services won’t be today’s. Think new, think fresh – and this Ablack podcast will nudge you in that direction.
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I applauded when I saw the headline: “Marriott International faces class action suit over mass data breach.”
The lede sets the table: “Hotel group Marriott International is facing a class action lawsuit in London’s high court from millions of customers, who are seeking compensation after their personal details were stolen in one of the world’s largest data breaches.”
There’s nothing new here. Hoteliers suck at data security. From Trump to White Lodgings, the roll of shame grows louder. Hotel News Now offers a catalog of the worst offenses going back to 2008 when Wyndham suffered the first of what became three breaches extending into 2010.
Give a hotel your credit card and you put your finances in jeopardy. Hand over a debit card – with its weaker consumer protections – and you have entered a high risk zone.
So it is about time that consumers are banding together in a class action suit to seek to exact a reputational pound of flesh, plus some actual lucre, from Marriott. The source of the breach is Starwood. Reported Hotel News Now: “For approximately 327 million of these [breached] guests, the information includes some combination of name, mailing address, phone number, email address, passport number, Starwood Preferred Guest (“SPG”) account information, date of birth, gender, arrival and departure information, reservation date, and communication preferences. For some, the information also includes payment card numbers and payment card expiration dates.”
What’s stunning is that the breach appears to have gone undetected from 2014 to 2018.
Even so, some of us who cannot join the suit still might want to savor Schadenfreude and watch the action. The Internet makes this easy.
This is 2020 so of course there is a Twitter feed about the suit.
And there’s a website with plenty of information about the suit and the breach that caused it.
Want to be updated on the status of the suit? Here’s where to register.
Michael Bywell, one of the lawyers involved in filing the suit, explained the why of the suit: “Over a period of several years, Marriott International failed to take adequate technical or organisational measures to protect millions of their guests’ personal data which was entrusted to them. Marriott International acted in clear breach of data protection laws specifically put in place to protect data subjects.”
Martin Bryant, who brought the action, added: “I hope this case will raise awareness of the value of our personal data, result in fair compensation for those of us who have fallen foul of Marriott’s vast and long-lasting data breach, and also serve notice to other data owners that they must hold our data responsibly.”
The sad bit is that exactly the same could and should be said about many other hotel management companies because indifference to data security is the industry norm. Go back and look again at the Hotel News Now database of breaches. It is only a minor exaggeration to say that if you stayed in a US hotel in the past decade, very probably you are a victim of a data breach.
I wish I could say that because of the publicity over breaches, the fines, and now the lawsuits, hotels are safer today.
But they aren’t. If anything, in the pandemic with the resulting collapse in bookings and revenues, the fear is that many hotels and management companies are cutting back on data security. And criminals live to exploit weaknesses.
For some years I have said that, sadly, protection against data breaches when traveling is on us. That’s all the more so now.
That means giving hotels the least amount of information possible. If asked for information you don’t believe they have a valid need for, lie.
Always use credit cards with the smallest possible balances.
Monitor loyalty accounts with a regularity that suits your balance. I never check my Bonvoy account (an Amex plat perk) because I have not had an eligible stay. But if I had many thousands of points I’d check weekly.
Assume that when you travel, your data may be hacked. It could be the restaurant where you eat that is breached. It could be a nation state breaches your cellphone.
But in my eyes it’s hotels that pose the biggest security risks.
It’s dangerous on the road, my friends, act accordingly.
Before he was 40, Ralph Swoboda was named CEO of CUNA in Washington, DC. That was in 1986 and he held the job until 1994. That was when CUNA was a big association, with a head count upwards of 1400 because it provided a lot of assistance for credit unions with back office operations.
His next job after leaving CUNA was chairman of the management committee of the Association of British Credit Unions, based in Manchester, England.
Later, he moved to CUNA Mutual where he was head of international operations, directing operations in some 30 countries, from China to the Caribbean.
Now Swoboda is managing director of CUFA Ltd., a fintech based in Dublin, Ireland which creates lending analytics software running on big data for credit unions in Ireland but expansion into the United Kingdom and the United States is afoot.
Buckle your seatbelt for this wide ranging conversation that covers upwards of 35 years of high level involvement with credit unions, literally in dozens of countries. You will hear about differences between Irish credit unions and American credit unions, about the importance of community banks to US credit unions, and how the US payments system is something of a Third World embarrassment.
We wind up discussing the lending analytics tools Swoboda now is involved in and the timing could not be more ideal as many credit union executives awaken to the reality that lots of once solid loans on their books may be turning bad as Covid-19 takes its toll on many national economies.
Probably no podcast in this series covers so diverse a range of topics, countries, technologies.
You may not always agree with Swoboda. But you will definitely have fun listening in on this conversation.
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The news out of the Ritz London has to fry you: scammers have been calling customers with restaurant reservations and prying out of them credit card details that the scammers quickly put to use making online purchases.
The problem is that this may threaten all of us who dine out, even if we have never set foot in the Ritz and have no plans to. That’s because these scammers have shined a spotlight on a failing that may entrap us all.
The Ritz said this in an August 15 tweet: “We can confirm that on 12th August 2020, we were aware of a potential data breach within our food and beverage reservation system, which may have compromised some of our clients’ personal data. This does not include any credit card details or payment information.”
Where did the credit card info get into this? Apparently the scammers called diners with reservations and said, “Sorry, there’s a problem validating your credit card info to secure the reservation. Can we have it again?” Or words to that effect.
To use the language of the trade, the crooks – who apparently had access to the hotel’s restaurant reservations – used social engineering to pry the valuable info out of the cardholders.
According to the BBC, “One woman, who had made an online booking for afternoon tea at the Ritz as part of a celebration, received a call the day before her reservation.
“The scammers asked her to ‘confirm’ the booking by providing her payment card details.
“The call was convincing because it appeared to have come from the hotel’s real phone number, and the scammers knew exactly when and where her reservation was.”
The last bit is important. What it means is that the crooks gamed caller id to spoof the Ritz’s real phone number.
Number spoofing is so easy even a caveman could do it. Details here.
Never believe a phone number that pops up on your screen. It may be real, it may be spoofed.
So, where do you come into this frame? If there is a theme song among restauranteurs in this pandemic it is complaints about dining no shows. The Washingtonian headline tells the story: Don’t be the jerk who no shows on a restaurant reservation during a pandemic.
Even across the pond in England a celebrated chef won applause from his peers for calling no shows “disgraceful.”
As restaurateurs explain, in much of the US, restaurants are required to operate at a reduced capacity. In Phoenix, for instance, they are required by an order of the governor to operate at no more than 50% capacity. It’s 50% also in Seattle. Ditto Texas.
Many restaurant struggled to turn a profit pre Covid. Capacity limits have put more stress on them. And every diner matters in reaching break even.
A solution: restaurant gurus are advocating what amounts to a no show fee be slapped on diners who don’t turn up. In some cases it might be $25 for a two-top – but some restaurants are charging multiple hundreds of dollars, that is, essentially requiring diners to pre-pay for their meal in order to secure a reservation.
Here is where the news gets worse: restaurants are among the most common victims of data breaches and you can be victimized two ways. A crafty scammer who grabbed only a reservations log – which almost always includes a phone number – could recycle the Ritz London scam and call the diners asking for a credit card number to secure the reservation. Know that scammers are copy cats and when they saw that Ritz scam, they knew their next move.
At restaurants that require a prepayment there already is a credit card number in the file.
A round up of food service businesses that suffered breaches is here.
Big names are in the mix such as DoorDash and Landry’s which operates some 60 national chains including Joe’s Crab Shack and Morton’s.
But I ask, are you more confident that small restaurants won’t be breached? I am not. Indeed, I wonder how many already are breached and don’t know it (and, sadly, often the only way they learn about it is when an energetic fraud researcher at one of the big credit card issuers follows the bouncing balls and traces back a fraud outbreak to a small restaurant. I know one very large credit union that actually traced it back to a particular server at a restaurant).
Not surprisingly, a poll found 62% of consumers already fear restaurant data breaches. The only surprise is that the number isn’t higher.
How can you protect yourself?
Get a call from a restaurant asking you to confirm a credit card number and standard advice is to say you will call them back – and make very sure you are calling a publicly listed number for the restaurant or hotel. Don’t call a number given you by the caller. They may just hang up and move on to the next fish in the net.
What about restaurant prepayments? I understand the restaurateur angst. My standard suggestion is use a credit card with a very low credit limit. If necessary, apply for one with, say, a $500 limit. Do not use a debit card for this, never. You probably can claw back money stolen on a credit card. Your rights are less with a debit card.
Last to-do – if you make a reservation, show up – or at least have the decency to cancel a day in advance. I know that’s asking a lot in the Covid-19 era. But it’s not to much for a restaurant to ask when their survival is at stake.
