March 22, 2017

Cybersecurity in 2017: Four Threats to Watch

By Jay Isaacson, VP, Product Executive
It may be a new year, but fraudsters haven’t shifted their focus from cyber. And, with cybersecurity an ongoing arms race, threats are evolving constantly.
Exposures can significantly impact your credit union, so it’s critical to be in tune with the latest cyber trends. Here are four threats to watch for 2017:
1.     Ransomware.
The threat of ransomware won’t slow down this year. In fact, it's becoming more commercialized. Fraudsters are now selling ransomware-as-a-service crimeware to other cybercriminals. Ransomware is particularly dangerous to credit unions. This is because malicious software can restrict access to files and threaten disruption or permanent destruction of sensitive information unless a ransom is paid.

2.     Distributed Denial of Service (DDoS) attacks.
DDoS attacks continue to increase in both frequency and sophistication. These attacks are generally targeted. Fraudsters use them to overwhelm a system with data in an attempt to prevent users from accessing information or services. This can mean users – or in your case, members – who try to use your website won’t be able to do so. Critical infrastructure within the U.S. – financial institutions, in particular – have been targeted with DDoS attacks in the past and likely will be again in the future.

3.     Internet of Things (IoT).
Devices with constant connectivity, like virtual personal assistants, Bluetooth headsets or smart lightbulbs may be convenient for consumer use. But, they can pose a threat to the broader internet ecosystem and, ultimately, your credit union. The connectivity of these tools and technologies make them susceptible to hacking. This can lead to unauthorized access to your network, and it can compromise your data.

4.     Nation-state cyberattacks.
Banking is a critical piece of our country’s infrastructure. This makes the industry an attractive target for foreign governments (or groups sponsored by foreign governments) looking to impact our economy, steal or spy. State-sponsored hackers seek to target sensitive information by exploiting vulnerabilities in software. Fortunately, credit unions generally aren’t at the top of the target list, but it’s best to be prepared. It’s clear that cyber warfare is a powerful new global tool for criminals.
So, how can credit unions best protect themselves against these threats?
·      Evaluate People, Processes and Technologies. First, look at the people, processes and technology supporting cybersecurity at your credit union. It’s critical to examine all of your protective layers holistically, so you can identify gaps and make adjustments. Simple security measures still matter. For example, make sure you are running the most up-to-date software on your system. Install patches in a timely fashion to protect against known vulnerabilities. And confirm user passwords are appropriately strong.

·      Educate Employees. Employee education is also crucial. With human error a factor in over half of data breaches, your employees are your first line of defense. Train them at the time of hire, and continue educating them regularly through the year.

·      Share Information.
Your credit union should consider participating in information sharing, such as the Credit Union Council of the Financial Services Information Sharing and Analysis Center (FS-ISAC). This customer-driven, non-profit organization keeps its nearly 7,000 financial firms informed of the latest cyber threats and recommended actions.

·     Consider Cyber Insurance.
Finally, evaluate cyber insurance. Options can vary widely, so ensure you review and understand the policy terms and conditions. Also evaluate coverage limits available to you should you experience a data breach. And, be sure you understand additional Risk Management services that support you as a policyholder.
Looking for more risk management insights? Join our Credit Union Protection webinar, titled Spam, Shams and Other Scams,” on Wednesday, April 19. We’ll discuss recent fraud trends, how you can detect a scam, what to do if you encounter one and how you can reduce the impact.
 How are you protecting yourself from the latest cyber threats?

*Available exclusively to Bond policyholders
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March 14, 2017

As Car Shopping Gets More Convenient, Lending Gets More Difficult

By Rich Trace, Vice President of Wholesale Lending and Commercial Protection

Car buyers today have much more control over the process than ever before. Think about everything a consumer can do before ever stepping onto the lot:
  • Visit dealer websites to explore their inventory.
  • Review specific vehicle information beyond the window sticker.
  • Compare vehicles and prices from multiple dealers.
  • Get a detailed vehicle history from any number of online sources.
  • Research ratings and reviews for virtually any make/model.
All of this activity can be done from the comfort of home using a computer, tablet or smartphone. This convenience has significantly impacted how dealers operate, and has put buyers more comfortably in the driver's seat. If dealers don't make it easy for customers to access information as they shop, they'll find it elsewhere. The risk is losing a potential sale without the buyer ever walking into the showroom or even having a conversation.

The same principle applies to financing. Borrowers want to easily access the information they need to make a decision - from researching rates and terms, through the application process, to approval and ultimately the closing. If your lending process isn't convenient, borrowers will simply find a better option, meaning your credit union lost a potential loan with little to no interaction with the borrower.

Want proof? Internal data shows members have applied for more than $6.4 billion in auto loans from 2011 through January 2017, using just CUNA Mutual Group mobile apps. And, more than 41% of all applications CUNA Mutual Group processed in the last quarter of 2016 were submitted via mobile – the highest percentage ever. Another sign comes from Callahan, which reported that "Indirect lending at credit unions continued to pull ahead of direct lending in the last quarter of 2016, account(ing) for approximately 56% of total auto lending."

This drive toward convenience is also causing car manufacturers to change their approach, which should concern credit unions. In January, Ford announced their investment in the fintech AutoFi, stating that the "platform makes it fast and convenient to finance a new Ford or Lincoln at a time when many U.S. adults say they want to spend less time at dealerships, while still going to their dealer to 'sign and drive.'"

GM is going a step further with their new Book by Cadillac service. For a monthly fee, consumers can keep a car or trade it at any time for a different model. There's no long term contract - it's a monthly arrangement. As CNN Money put it, "It's a new way to own a car. Or rather, to not own a car."

As the car buying landscape continues to shift, credit unions need to constantly adapt to remain relevant to their members. As Debi Southworth, Chief Lending Officer, OMNI Community Credit Union said, "Members are looking for online lending. Branch traffic has continued to decrease as people become more comfortable online."

To learn more, check out 5 Reasons to Make Convenience a Strategic Priority.

March 9, 2017

Stay Tuned for What Matters Now™: Insights from the Non-Member

How well do you know non-members? Understanding the unique profile and mindset of non-members, including under-engaged members, can help you better attract and connect with this audience.

So, who are non-members? The answer may surprise you. Nearly 25 percent of individuals with credit union products do NOT identify as a member.* And, more than half of non-members believe credit unions have limited locations, services and products.*

What Matters Now: Insights from the Non-Member builds on our 2015 and 2016 research, which revealed how middle-income Americans and Millennials define success. At the upcoming CUNA Marketing & Business Development Conference, we’ll provide a deeper understanding of the non-member’s perspective. 

Join our session on Friday, March 31, from 3:00-4:00 p.m., to be the first to hear about the research. You'll gain in-depth insights into the lifestyles and attitudes of non-members and learn how to engage with these potential customers to meet their needs, challenge their misconceptions and motivate them to consider making the switch.

At CUNA Mutual Group, we’re committed to continually learning about consumers. We believe that by listening to credit union members and non-members and sharing these insights with you, together we can serve members better. What Matters Now is part of an ongoing insights program to learn from hardworking families.

*TruStage®What Matters Now Consumer Research, December 2016

March 1, 2017

Three Out of Your Top Five Performers Could Leave for a Competitor

By Anne Corrigan-Watson, Senior Performance Consultant

You understand better than anyone that it's a fiercely competitive financial services landscape. For your credit union, it's critical to retain not only your members, but your top performers as well.

Imagine your team's top performers lined-up in front of you. They're essential to your credit union's success, right? Now imagine three out of every five of your rock star employees walking out your front door to work for a competitor because they received a sweeter offer. How would that impact your business operations? What about your member service model? What would the impact be to your bottom line?

Make no mistake - your competitors would love to tap into the expertise of your staff and are gladly willing to pay to get them. If you don't invest in your staff and provide them with ongoing training in their field of expertise, you risk them taking their skills to your competitors.

So how do you retain your top talent? It starts by investing in their careers through our performance-based training webinars. These engaging sessions will give your staff what they need to understand what they can do to drive performance, develop loyal relationships with members, and enhance the member experience. And credit union leaders and managers can take advantage of webinars to develop leadership and coaching skills to help staff maximize their lending performance and the credit union’s bottom line.

Check out our 2017 webinar series, available at no charge to credit unions that use our lending solutions to help protect the financial security of their members.

What are you doing to retain your top performers? Register today to learn what you can to do retain your people. Or, run the risk of three out of five of them taking their skills to your competitor. 

February 25, 2017

Why Are You a Credit Union Advocate?

Since our humble beginnings over 80 years ago, our people, products and services have all worked to make a difference in the credit union industry.

With CUNA's Governmental Affairs Conference (GAC) here, we're proud to stand with credit unions and members and advocate on their behalf. So, we asked our employees why they're credit union advocates. Here's what they shared with us:

Why are you a credit union advocate? If you're attending GAC this week, stop by booth 343 and tell us for a chance to win a $1,000 charitable donation. If not, join us in conversation on Twitter!

February 23, 2017

Five Emerging Risks and How to Mitigate Them

By Joe Luedke, Risk Consultant – Emerging Risks, Risk & Compliance Solutions

With each technological advance emerges new risk. Think about it: Every technology upgrade, new mobile device and new payment method brings exposure that wasn’t identified previously.

The real threat occurs when these risks aren’t anticipated or communicated within your organization. Here are five emerging risks every credit union should have on their radar right now:

  1. Social media.
    Employees posting comments on social media that are inaccurate or appear incomplete or disparaging can threaten your organization’s reputation. Be careful when taking disciplinary action, as the National Labor Relations Board can classify social media activity as “protected concerted activity.” Mistakes here can lead to retaliation, wrongful termination claims and expensive litigation.

  2. Internet of Things (IoT) era.
    The IoT offers new tools and technologies that provide constant connectivity. It also creates new opportunities for data compromises. Workplace devices – like printers, clocks, break room appliances and TV – and employee devices – like watches, Bluetooth headsets and fitness trackers – are all susceptible to hacking, which can lead to unauthorized access to your network.

  3. Bitcoin and blockchain.
    Members may already use bitcoin and blockchain for fast and unregulated transactions, sometimes associated with nefarious activity. Unfortunately, about a third of bitcoin trading platforms are hacked.

  4. Ransomware.
    Today’s phishing attacks can restrict access to files and threaten disruption or permanent destruction of sensitive information unless a ransom is paid. Ransoms can range from hundreds to thousands of dollars, and they are typically payable in bitcoin.

  5. SMiSHing and website spoofing.
    As demand for mobile access grows, members don’t think twice when they receive texts claiming to be from their credit union. These fraudulent texts can infuse malware or redirect members to spoofed websites that allow fraudsters to capture or confirm personal or account information.

Credit unions must be ready to deal with emerging risks like these, while still tending to familiar threats. So, the bottom line is, don’t be complacent. Start implementing basic steps – like the following – today, so you don’t fall victim:

  • Educate staff and members about spam, shams and other scams. Ensure they understand how to identify fraud. Teach them what to click and what not to click and how to use proper technology etiquette to keep themselves – and your credit union – out of harm’s way.

  • Stay in the loop, as executive involvement is critical to success. Remember, when risk management is effective, nothing bad typically happens and the status quo is maintained. But, when you’re blindsided by a problem, poor risk management usually takes the blame.

  • Follow a process that includes risk mapping matrices, risk heat maps and process mapping to help uncover potential risks, quantify their potential impact and keep leadership aware.

  • Implement risk and compliance best practices, including policies and procedures to reduce potential loss. A number of great resources in the credit union marketplace are available to help, including those in our Protection Resource Center.

As technology continues to evolve, risks will continue to emerge. So, do your best to visualize, track and communicate risk at your credit union. Once you identify an emerging risk, you can begin taking action to mitigate it.

Learn more about emerging risks by watching our recent webinar with NAFCU, titled “Emerging Risks on the Radar.”

Note: This post originally appeared via the NAFCU Services Blog.

February 21, 2017

Three Advocacy Topics to Consider As You Head to GAC

By Christopher Roe, SVP, Corporate & Legislative Affairs

Each year, more than 5,000 credit union attendees gather at CUNA’s Governmental Affairs Conference (GAC) in Washington, D.C., for the same purpose: to advocate for the credit union industry. We’ll be at GAC, too, hiking the hill alongside credit union leaders and members and advocating for credit union system priorities.

As you head to Washington, D.C., or follow the conference from afar, here are three advocacy topics to think about.

  1. Credit unions need regulatory relief.
    Credit unions offer members many benefits, including affordable financial services. However, as regulatory burden increases, credit union members end up paying the price. According to CUNA, regulatory burden subjects 105 million credit union members to higher loan rates, longer wait times for loan approvals, limited access to modernized technology and fewer and more expensive services and products. This translates to a loss of $71 each year per credit union member.

    Given that credit unions didn’t cause the Great Recession, small credit unions are disproportionately impacted by new regulations because they lack the scale of big banks.

    How can you join us, CUNA and other credit union leaders to start the advocacy conversation with Congress? Ask Congress to pass legislation that takes into account that credit unions are small financial institutions and shouldn’t be treated like big banks.

  2. Credit unions need negligent merchants to be held to data security standards.It’s no secret that today’s risk landscape is evolving constantly. And, credit unions are a target – especially when it comes to data breaches.

    Because negligent merchants are not liable for lax data security standards, credit unions are exposed each time a cyberattack strikes a merchant. (Consider the recent Arby’s breach, for example.) After the breach, credit unions are responsible for covering the costs of the resulting fraud, blocking transactions, reissuing cards, increasing staffing and monitoring consumer accounts. But, credit unions and their member owners aren’t compensated for the harm caused by the negligent merchant.

    How can you join us, CUNA and other credit union leaders to start the advocacy conversation with Congress? Ask Congress to pass legislation that would impose data security standards on merchants to protect consumers and reduce criminal access to financial information.

  3. Credit unions need to preserve their tax status.
    As you know, the credit union federal income tax status allows many credit unions to survive and provide members with accessible and affordable financial services. In fact, credit union members have benefited by $10 billion dollars in the last year because of the tax status. Because credit unions are structured as not-for-profit financial cooperatives owned by their members, the credit union tax exempt status ensures the “People Helping People” philosophy and mission to promote thrift and access to credit can continue well into the future.

    How can you join us, CUNA and other credit union leaders to start the advocacy conversation with Congress? Tell Congress that credit unions earn their tax status each and every day, and that a tax on a member-owned, not-for-profit credit union is a tax on Americans of modest means.

We hope these serve as thought starters as you make your way to GAC. If you’re attending, stop by booth 343 to say hi and enter for a chance to win a $1,000 charitable donation. If not, join us in conversation on Twitter!

February 14, 2017

Are You Financially Compatible With Your Crush?

By Steve Mendez

With Valentine’s Day here, many of us are thinking about our romantic relationships. It's also a good time to think about your relationship with money. Why? Because it can affect your love life more than you may realize.

Financial relationships affect personal ones.
A net search on the top reasons couples break up will show money issues, nearly every time. Whether it’s hiding debt, not paying bills or being too controlling with cash, couples who are mismatched in money habits face pretty bad odds. In fact, they’re more likely to join more than 4 in 10 American first marriages that end before “death do you part.”

Men and women have financial preferences - even if they don't talk about them.
Studies show that, when it comes to dating and relationships, people with good financial habits are looking for partners who behave the same way. A 2016 Economic Times survey found the following:

  • Most men prefer partners who spend carefully and live within their means. 
  • Most women prefer partners who are smart investors. 
  • And, careful spending and investing were the top two most appealing traits to both men and women, followed by thriftiness, generosity and willingness to spend loosely.
Age matters.
It’s important to note that age also plays a role here. The survey showed couples in their 20s disagree more often about spending too much and not saving enough. While couples in their 30s and 40s argue more about making wise investments.

Debt can be awkward.
OK, we’ve covered saving and investing. But, what about the D-word (debt)? Research shows that, overall, 94 percent of men and women are willing to help a partner repay an outstanding debt. But, one in five women will only do so if they're made part owner of the asset. This could be awkward if you’re still paying off student loans.

You can find your financial compatibility.
So, you want to put your best financial foot forward. Whether your relationship is new or a lasting one, how can you approach the topic without seeming too materialistic? It's simple: 
  • Take your time. 
  • Make financial conversations more specific as the relationship develops. 
  • Learn your partner’s habits around spending, saving, investing, etc. over time. 
  • Be open about yours.  
How well do you understand your financial habits and your relationship with your money? If you have a love interest, how well do you understand his or hers? Now might be a great time to check them out.

February 9, 2017

Convenience is Driving Our Lives - And Your Business Model

By Tim McAdow, Vice President, Sales Operations & Marketing

Could you ever go back to using a flip phone or having no cell phone at all? How about staying connected with family and friends without social media, traveling without GPS or working out without an exercise tracker on your wrist?

Today's consumers rely on technology more than ever to make their everyday lives easier. And, their growing need for simplification is dramatically changing how they interact with their credit unions.

As Raffo Wimsett, Campus Relations Partner at Commonwealth Credit Union in Kentucky says in this short video, innovation has taken member expectations to new levels. "Life's busy. Now I can just hit my thumbprint on my phone, and that takes me right into my online app. And now I have everything I could want -- one, two, three -- laid out for me."

Watch the rest of Raffo’s story to learn how the need for convenience is shaping the way he serves members.

What's your credit union's plan for serving members where, how and when they prefer? Check out Succeeding in Today's Convenience Economy to learn three key steps credit unions should consider implementing to meet their members' growing expectations.

February 8, 2017

Plastic Card Fraud: The Best Defense Tactics to Minimize Losses

By Robert Jarosinski

While many types of fraud impact financial institutions today, the growing concern over plastic card fraud is worth noting.

Credit unions aren’t strangers to this kind of fraud. And, with worldwide card fraud expected to increase 45 percent by the end of 2020, it’s time to take action.

As card fraud continues to evolve, credit unions must use the best defense tactics to minimize their losses. Some of these include:

  1. Implementing EMV.
  2. Building a strong organizational risk culture.
  3. Developing a keen awareness of risks and fraud tactics.
  4. Integrating consumer efforts.

Card fraud doesn’t discriminate by the size or location of the credit unions it affects. So, now is the time to better understand what you can do to avoid it.

To learn more about plastic card fraud, watch our on-demand webinar, titled “Card Fraud Trends Continue to Grow."* Robert Jarosinski, Sr. Consultant, Risk & Compliance Solutions, discusses insights and action steps to help mitigate the evolving plastic card fraud risk.

Interested in attending more of our 2017 Credit Union Protection Webinars? View the entire schedule here.

*Available exclusively to Bond policyholders, must sign into My Services