Thursday, May 25, 2017

The Convenience Economy and the Rise of Data Analytics

By Rich Trace

Today's consumers rely on technology more than ever to make their everyday lives easier. Meeting their growing demand for convenience is dramatically changing how they do business with you. But, in today’s convenience economy, don’t make the mistake of thinking that only the member benefits from a streamlined, digital experience.

Every digital interaction creates a unique data point, and today’s tech-centric lifestyles are creating massive amounts of data. Companies have come to understand that all this (big) data creates a roadmap to consumer tendencies and behaviors. This information can be critical to studying your members, identifying their needs and preferences and developing strategies to be there for them when and how they want.

With the explosion in swipes, clicks and third party sources, the ability to research patterns and make educated guesses on future actions has become much more of a reality.

Learn why data analytics has become so important today and the five major considerations credit unions face when implanting a data analytics strategy. Read the full article here

Trends Report: Credit Unions See Membership, Loan and Savings Growth

Credit unions are gaining members, seeing loan and savings balances grow and hiring more staff. That's according to our latest Credit Union TrendsReport for May 2017.  
Highlights from the new report include:
  • During March, credit unions picked-up 592,000 in new memberships, loan and savings balances grew at a 13.4 percent and 7.8 percent seasonally-adjusted annualized pace, respectively. Firms hired 79,000 workers, nominal consumer spending was unchanged, and long-term interest rates increased 6 basis points. Real GDP growth was 0.7 percent in the first quarter due to a slowdown in inventory accumulation and weak consumer spending. 

  • At the end of March, CUNA’s monthly estimates reported 5,953 credit unions in operation, 24 fewer than one month earlier. Year-over-year, the number of credit unions declined by 242, less than the 252 lost in the 12 months ending in March 2016. 

  • Total credit union assets rose 1.7 percent in March, faster than the 1.0 percent gain reported in March of 2016. Assets rose 8.7 percent during the past year due to an 8.6 percent increase in deposits, 19.3 percent increase in borrowings, and 5.9 percent increase in capital. 

  • The nation’s credit unions increased their loan portfolios by 0.9 percent in March, slower than the 1.1 percent pace reported in March 2016. Loan balances are up 11.3 percent during the last 12 months. With loan balances growing faster than savings, credit union liquidity is tightening as the credit union average loan-to-savings ratio reached 78.2 percent, up from 76.3 percent in March 2016. 

  • Credit union memberships rose 0.54 percent in March, up from the 0.45 percent gain reported in March 2016. Memberships are up 4.5 percent during the past year due to robust demand for credit, solid job growth and credit unions having comparatively lower fees and loan interest rates. · Credit union loan delinquency rates fell to 0.74 percent in March, below the 0.75 percent natural long-run rate, from 0.78 percent in February due to tax refunds and bonuses allowing some members to catch-up on late loan payments.

 To review the full, complimentary trends report, click here 

Wednesday, May 24, 2017

Three Payment Themes for Credit Unions from Card Forum 2017

By Robert Jarosinski

“Keep Austin Weird” is the Texas city’s official slogan. It fits, given the unique experiences you may come across there, like trailer park eateries, grown people riding tricycles, eclectic art and more!

What some consider weird, others embrace as innovative. It’s a matter of perspective. The same holds true for what’s happening in the payments landscape for credit unions. It’s hard not to notice the similarities between the city and the new developments and insights we picked up at Card Forum 2017 there this week.

Year after year, Card Forum continues to grow as one of the leading payment conferences in the world. Leaders from card networks, processors, disruptors and financial institutions are present, and networking opportunities abound. At CUNA Mutual Group, we especially appreciate the conference for recognizing the unique needs of credit unions. The show dedicates an entire half-day summit to people who are part of the movement.

After three days of taking in all the information, here are the key takeaways:

Well that was easy! Unfortunately, that’s not the perception of the payment channels in the United States. Antiquated systems, middlemen and regulation all seem to be working in concert to create poor member experiences. That presents challenges, especially with millennials who value convenience above all. With that in mind, innovative financial institutions are looking to simplify the experience and centralize it around the member versus the payment channel. This includes integrating channels, extending real-time offers/decisioning and providing a uniform experience across platforms.

EMV seems so yesterday… So, what’s next? Even with EMV in place, it’s not too surprising that fraud, overall, hasn’t seen significant improvement. Wishful thinking aside, the industry knew fraud would migrate from card-present to other channels. What’s surprising is that card-present fraud is still a staggering problem. The slow adoption of EMV at retailers, recent limitations of liability and fraudsters doubling down on breaches/skimming are all to blame.

Some credit unions are so fed up with skimming, they’re saying goodbye to plastic cards at the ATM altogether by going contactless. Credit unions are realizing that investing in resources for things like developing KPIs, rule writing and fraud analytics are crucial. And, tokenization appears to be all the rage, whether it is on the card itself or as part of the mobile banking app.  So, hope is on the horizon.

At the end of the day, what is a payment account or furthermore a share draft account? It’s a series of numbers that keep a stored value. At least that’s what Amazon, Apple, Facebook, Google and other disruptors are “banking” on. These companies are hoping your members’ affinity to their products or services will ultimately trump the need of having to go anywhere else to access funds.

While they’ve made incredible progress, these disruptors lack the infrastructure and the over 150 years of experience that gives the financial services industry an edge. Aside from that, they underestimate the relationships cultivated between you and your members. That said, standing still will not get the job done. Credit unions can fight irrelevance by continuing to innovate and thinking outside of the box.

Staying ahead of the complex array of payment transactions, ever-changing risk, compliance issues and industry regulations takes a team. We hope these takeaways help you manage your credit union's consumer payment strategies. We know how critical it is to distinguish yourself with members who, not only demand, but expect convenience with payments today.

Want to know more? Our Protection Resource Center allows CUNA Mutual Group policyholders to access a variety of resources, webinars and education, RISK Alerts and other loss control recommendations. For more information contact the Risk & Protection Response Center at 800.637.2676, option 4 or via