“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:
CONVENIENCE IS KEY
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.
FRAUD CONTINUES TO GROW
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.
IRRELEVANCY IS A THREAT
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 riskconsultant@cunamutual.com.
