Part 2

Hint: Two Surprises

By Robert McGarvey

The rethink I never saw coming continues to unfold in my wallet.  And new cards have joined the party.

Of course, for years, I have thought Amex – Platinum in particular – had the starring role in my pocket. Regular readers will recall that as I bemoaned the lack of travel related perks in the Covid era – and they have been the main attraction for Platinum – I found myself making dramatically more use of the Amazon Prime card, which delivers 5% rewards on purchases at Amazon and Whole Foods, and also Discover, which offers a rotating cast of 5% cashback rewards.  Presently it is on groceries and chain drug stores.

Amex meantime has rolled out new Plat rewards, notably a $30/monthly refund of PayPal purchases funded with the card, and there is a continuing $15/monthly credit on Uber and Uber Eats. Of course I shifted Netflix and the NY Times to PayPal and that’s a quick $30 in my pocket.

But as I feasted on different rewards I got hungry for more and new in my wallet is the Venmo Credit Card.  What’s Venmo? A cool person to person payment service owned by PayPal, Venmo moved $100 billion in 2019 and it is fantastically popular with Gen Z (people ages 6 to 24).  I signed up a few years ago because it works to send gifts to young relatives (some of whom don’t know what a paper check is).

It’s a good thing I did because I have a multi-year track record with Venmo.  And when I heard about the new Venmo credit card, I wanted one.

Right now it is open only to a limited audience, and only via the Venmo mobile app, and when I checked, I discovered I was eligible to apply. So I did.

Why? It’s fee free and it pays cashback – 3% on your largest purchase category, 2% on the next largest, 1% on everything else. I see no caps on spending amounts. (Discover, by contrast, caps a 5% category spend at $1500, meaning $75 back.)

The percentages are dynamic. They will shift as your spending shifts.

We’ll see how much I use the Venmo card but, in principle, I like it because as I spend I earn a few dollars in rewards. Sure, I know there may be cashback cards with richer rewards, but remember Venmo is on point for me, in part because I have written about it before and probably will again. It’s a company I follow.

You want one?  Download the Venmo app, from the Apple or Google app store, sign up for a new account and keep checking the app. You may see an invitation to apply.

But now I am on a roll of new cards and also in my wallet is Lili, a new mobile bank card that bills itself as the ideal card for gig economy workers (meaning me).  And one afternoon, in under three minutes, I opened the account and funded it.

Partly I did that because in my other life I talk and write a lot about credit unions in particular and financial services in general (remember my tracking Venmo) – and a continuing obstacle in the digital transformation of credit unions has been a slowness to embrace online and mobile account opening.  Often a new account means a visit to a branch and that is just so 1950.

When I saw Lili’s promise that a new account could be mine in under three minutes I had to take the plunge – and, voila, it worked.  Interested in signing up? Go here.

Lili is free and it provides a free checking account, a Visa business debit card, and expense reports that make tax filing easier.

And the Visa business debit card also is a boom to tax filing. Just use it only for tax deductible expenses and that saves time right there.

OK, by now you are probably guessing that because I no longer have any interest in counting my air miles (what miles?) I have time on my hands and I am putting it to use playing with new credit and debit cards.

I cannot dispute that.  Nor can I dispute that I now occasionally read geeky credit card advice articles on the Points Guy that I never would have spent a second on a year ago.

But, you know, saving money by using the right credit card is proving to be fun – and it is a lot easier than I had thought.  And yet I still goof with inattention. I picked up a $6 prescription at Walgreens this a.m and paid with the Amazon Prime card (1% rewards). But I should have paid with Discover and gotten this month’s 5% reward. That’s 30 cents versus 6 cents.

It adds up, my mother used to tell me, and, yes, I ignored her. But now she’d be proud of me.

By Robert McGarvey

Breach Clarity, a startup from onetime Javelin Strategy + Research co-founder Jim Van Dyke, is about to change how organizations talk about their data breaches – with a loud emphasis on increased transparency, reduced opacity.

Breaches are commonplace. There are four significant ones daily, says Van Dyke. But that does not mean the public knows much about them. Ask any cybersecurity journalist what they do not like about organizational breach press releases and the short answer is everything. That is because opacity – saying as little as possible and offering few details – is the operating philosophy. 

One fact: confused and frightened consumers want more facts about breaches and how they are impacted.

Scoring the Severity of a Breach

Enter Breach Clarity which aims to do three things that are game changing: it scores a breach on its severity, from 1 to 10; it tells an individual what he/she needs to do to protect himself if caught up in a specific breach; and it will soon offer a score of an individual’s risk of being a fraud victim with scores ranging from 1 to 100.

As for the action items Breach Clarity suggests, they will be specific to a particular breach and to an individual. Some breaches set up some individuals for IRS fraud, for instance. Others set up some individuals for new account fraud. Still others often will lead to attempts at account takeovers.  There is no cookie cutter advice. Customization and personalization are what Breach Clarity aims to deliver.

A fourth thing may be even more game changing: Van Dyke, whose Javelin claimed many mega banks as clients, is marketing Breach Clarity as a value add for credit unions to offer to their members.  He already claims one customer – BCU (formerly Baxter Credit Union), the nation’s 56th largest with around $4 billion in assets.  

According to Van Dyke, although BCU is offering Breach Clarity as a free tool to members, it nonetheless forecasts a 5X ROI.  How? Reduced fraud losses – financial institutions, says Van Dyke, absorb the bulk of the losses due to data breaches and the hope is that an informed membership will be better able to take steps early to minimize fraud.  

Van Dyke also says there will be a reduction in member calls for help to call centers – and financial institutions relate that after heavily reported breaches they are swamped with SOS calls.  Fewer calls mean lower costs.

Phase 2 of Breach Clarity’s marketing plan is to expand the focus to national and large regional banks.

Consumers Want This Help

Van Dyke also says that consumer research done by Breach Clarity found a surprisingly robust appetite for such tools among Gen Z and Millennials.  Interest is also high – and expected – among Baby Boomers.

Where does Breach Clarity get its breach data? Via the non profit Identity Theft Resource Center, says Van Dyke, who sits on the ITRC board.

Eva Velasquez, CEO of ITRC, said: “The ITRC is honored to partner with Breach Clarity and provide more meaningful information to consumers and data breach victims.  The biggest challenge breach victims face is understanding the risks associated with a particular breach, and what steps they should take next.  Breach Clarity, powered by the ITRC’s data breach data, addresses this challenge by providing an intuitive risk score accompanied by essential action steps.  We are proud to be a part of a no-cost solution that brings much needed clarity to the victims of data breaches.”

The analytics that score breaches on severity and generate custom corrective steps are results of Breach Clarity algorithms. 

Three Steps That Must Be Taken

Here are three steps every organization that suffers a breach needs to take to prepare for demands for more transparency and clarity about breaches:

*Ditch the opacity in breach related press releases.  Aim for more transparency, especially around what data was stolen, over what timeframe. 

*Breached organizations need use cybersecurity writers to polish releases.  By all means, involve lawyers and cybersecurity technicians. But writers specialize in the communication skills that will add much needed transparency.

*Be transparent about the cybersecurity steps that the organization has taken.  Don’t give cyber crooks a road map but do disclose to the public information that will help restore confidence.

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Hear a half-hour podcast with Jim Van Dyke here.  

by Robert McGarvey

Every day there are four data breaches. And every year literally of billions of dollars are lost in various frauds that are fed by the data stolen in breaches.  Who pays the bulk of that loss? Financial institutions, says Jim Van Dyke, founder of Breach Clarity, an innovative company that wants to shed a bright light on the breaches themselves but also what any given breach means for this consumer.

Generally there’s enormous opacity around breaches. Most organizations are slow to divulge details – and that makes it difficult for a consumer to decide on an appropriate action plan.

Breach Clarity aims to shine a spotlight on the breaches but also to tell consumers what steps they need to take to protect themselves.

Note: this is not a LifeLock type company.  Breach Clarity is about research and personalized prescriptions that in many cases the consumer will take him- or herself, often in association with a participating financial institution.

Key to Breach Clarity is that its business plan involved signing up financial institutions who in turn will offer the service to their customers and members.  It is not a direct to consumer play.

Another key: for now Breach Clarity’s focus is on signing up credit unions in particular.  The member focus, says Van Dyke, makes Breach Clarity a tool that credit unions will want to offer members.

And a benefit is that Breach Clarity may well reduce a credit union’s fraud losses and also call center costs associated with breached members.

The first Breach Clarity customer is BCU (nee Baxter Credit Union).   Check out a recent CUBroadcast show featuring Van Dyke and BCU’s Carey Price.  

BCU forecasts its ROI on Breach Clarity will be 5x.

By the way, if Van Dyke’s name seems familiar it is because it should be. He was a co-founder of Javelin, a strategy and research firm focused on financial services.  In a spot check, I found I cited Javelin research and opinions 61 times when I wrote for CUTimes.  That’s a lot.

Check the Breach Clarity database for credit unions and there are 39 breaches. Is your FI on the list?

Don’ be lulled by that small number, Van Dyke warns.  Few credit unions are breached – buy they still are where much fraud shows up, using data stolen in other breaches.

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

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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