Tech

by Robert McGarvey

Just when you thought ATMs had to be going down for the count—and, honestly, who didn’t think that as the pandemic took hold?—the rumbling is loud that ATMs are emerging as a low cost branch replacement option.

Understand, too, that closure of bank branches is on a fast track. Pymnts forecasts that some 20,000 bank branches will close by year-end, mainly because many of us have shifted our banking to digital channels and correspondingly have cut back on branch visits. Personally, I cannot remember the last time I was in a branch. Recently, when I walked by the branch I had very occasionally visited, it had plywood on the windows and doors and a notice that it was closed.

Michael Perito, regional bank analyst for Keefe Bruyette & Woods, a New York investment bank, is on record saying that there needs to be closures of perhaps 20 to 30% of branches—“and that’s a conservative estimate.”

Sure, credit unions are unlikely to close as many branches as banks will because the industry is not over-branched the way money center banks in particular are. There will, however, be closures of credit union branches in neighborhoods where they are not demonstrating there is a need. And other branches will close as institutions “right size” branches from yesteryear’s 3,000+ sf to under 1,000sf (and often just a single teller line, down from the four to eight of yesteryear).

Call this a big branch rethink where what will emerge is the branch of tomorrow. Few believe credit union branches are disappearing. But many think that tomorrow’s branches will make much more use of self-service tools and technologies.

Continued at CU2.0

by Robert McGarvey

Just when you thought business couldn’t get tougher—most credit unions now are wrestling with collapsing loan revenues as interest rates continue to tumble. And yet, more non-bank competitors enter the fray.

Sure, some experts shrug them off. The ABA Banking Journal, in a recent story about the rise of non-banks, features this quotation: “‘I saw the other day that I can get a bank account with T-Mobile or something, but I don’t want to bank with T-Mobile—I just can’t imagine that there will be millions and millions of American that are,’ remarks Canapi Ventures partner Walker Forehand.”

I can imagine it and my advice to you is do likewise. You do not have to open a T-Mobile banking account. But work at understanding why some of your members will.

And it’s not just T-Mobile. Suddenly, everybody from neo bank Lili—featured in this CU2.0 write up—and of course Apple (with Apple Pay and Apple Card) is plunging into banking.

Continued at CU2.0

by Robert McGarvey

I applauded when I saw the headline earlier this year: “Marriott International faces class action suit over mass data breach.”

Hotel groups have mismanaged data security for at least a decade. This negligence has put our data in the crosshairs of cyber criminals.

In the Marriott case, the source of the malaise is Starwood, which Marriott acquired in a merger. With Starwood, the group also acquired a massive data breach. Hotel News Now reported that approximately 327 million guests were affected by the breach.

Why am I re-hashing this sorry affair now, two years after the breach was announced? Because the saddest part is that the industry hasn’t learned from it.

Continued at Cybersecurity Writers

 by Robert McGarvey

A dirty secret inside credit unions is that many frontline workers – and very possibly most senior staff – just do not use their institution’s digital banking tools. Why bother when you work in a branch?  Just walk up to a teller and, whoosh, task handled.

And then along comes a pandemic that closes many branches, and makes many members and employees leery of setting foot in the open ones, and suddenly there is a stampede to adopt digital.  A couple problems however.  A lot of the institution’s staff cannot adequately explain how to use the tools because of their own lack of familiarity and a lot of the members who are newly adopting digital are starting at ground zero and genuinely need help.

Enter John Findlay’s Digital Academy, a SaaS (software as a service) tool that aims to solve both problems for credit unions.

Better still: right now there is a 90 day free trial because, says Findlay, the company wanted to do its part in helping financial institutions and their members and customers meet the challenges posed by the Covid-19 pandemic.

What Digital Academy gives financial institutions is an automated way to create an instructional walkthrough that can be used by members and employees alike. How easy is it to create this? Often an institution can create a walkthrough for, say, Mobile Remote Deposit Capture in perhaps a half hour, says Findlay.

How can it be that easy? Remember, it’s automated.  Basically the credit union grabs perhaps a half dozen screen shots. How simple is that?

The cost? Findlay says the company’s tool kit is available for a fee correlated to asset size. An institution in the $100 million range might pay around $15,000 annually. An institution with $1 billion in assets might pay $100,000 annually.

He stresses that significant staff technical expertise is not required to create an instructional walkthrough.  The aim of the tools is to democratize the creation of learning tools.

You wish you already had it? Remember that 90 day free trial…and, says Findlay, so far every institution that has taken the trial has chosen to sign on as a customer.

Hear the podcast to find out why Findlay developed the Digital Academy tools and more details about exactly how easy they are to use.

In the podcast there is mention of a CUBroadcast show – here’s the link.

There’s also mention of a podcast about the CU2.0 Mastermind group – link here.

Listen here.

Get your FREE ticket to the December 9th CU2.0 Fintech Mastermind Presents Showcase Day 2020.  This is the first of its kind event where CU 2.0 has brought together the industries’ top leaders form well known Credit Unions and paired them up with top Fintech experts in one place! Our subject matter expert will help you and your organization tackle the top issues we face today with unique master classes, tailored for folks just like you.

Get your ticket at Eventbrite. Click here.

Read up to learn more about Mastermind groups here in this CU2.0 blog post.

Hear the first CU2.0 Mastermind podcast here.  In this episode Kirk Drake and Dr. Patty Ann Tublin, who facilitates the CU2.0 Mastermind groups, talk about why and how Mastermind groups work and who will benefit from them.

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

And like this podcast on whatever service you use to stream it. That matters.

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

by Robert McGarvey

Is now the time to bury the ATM?

A few months ago the answer looked like a definite maybe but now, says Octavio Marquez, Senior Vice President and Managing Director, Global Banking, Diebold Nixdorf, ATM traffic is up across much of the US and oftentimes it is higher than pre-pandemic levels had been.

What’s happening, says Marquez, is that financial institutions – credit unions very much included – are rethinking their branch networks and in that process many are also rethinking the role of the ATM.  That new look at ATMs is accelerated by the reality that many of us are seeking to minimize person to person interactions.  And financial institutions are also beginning to look at the ATM as not just a piece of machinery but as a useful player in digital banking.

Along the way, Marquez talks about new uses for ATMs. They no longer are just about spitting out money and taking deposits. On many we can now pay utility bills.  Some can also perform KYC chores for a credit union. Some can print out and distribute a new debit card.

Clearly it’s no longer simply your father’s two note machine.

The podcast opens with a brief discussion of a new partnership of Truliant Credit Union and Diebold Nixdorf where DN All Connect Services are now available to Truliant members.  Said the press release, “The comprehensive service will increase branch and ATM channel efficiency, offer enhanced digital integration and provide members with modern and convenient self-service banking options.”

Rik Kielbasa, chief digital officer at Truliant, said: “Our expanded partnership with Diebold Nixdorf will help us anticipate future market needs and develop even stronger connections with our members. User expectations around ATM services are constantly evolving, and enhanced functionality allows us to exceed these expectations and increase service levels. Implementing DN Allconnect Managed Services offers opportunities to continuously optimize the member experience so we never miss a moment with them.”

In the same press release, Marquez said, “Together, we’re on a mission to amplify Truliant’s membership through a truly consumer-centric, highly-available ATM experience.”

Listen up.

Get your FREE ticket to the December 9th CU2.0 Fintech Mastermind Presents Showcase Day 2020.  This is the first of its kind event where CU 2.0 has brought together the industries’ top leaders form well known Credit Unions and paired them up with top Fintech experts in one place! Our subject matter expert will help you and your organization tackle the top issues we face today with unique master classes, tailored for folks just like you.

Get your ticket at Eventbrite. Click here.

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

And like this podcast on whatever service you use to stream it. That matters.

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

By Robert McGarvey

What a difference a pandemic makes.  Just six months ago when contactless payments came up, credit union c-suiters, most of them, yawned and dismissed it as a nice to have that hadn’t vaulted up to must have status – and, besides, many hundreds of credit unions are signed up for Apple Pay which gives users a version of contactless.  Who needs more?

More specifically: who needs a credit union contactless enabled debit or credit card?  Most credit unions, just six months ago, thought the right answer was not us.

That was then, this is now and now, in a in a pandemic, the consumer’s cry is getting loud: give us contactless and give it to us now.

Continued at CU2.0

by Robert McGarvey

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.

You know digital first matters.  

Listen up.

Hear the Backbase podcast here.

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

And like this podcast on whatever service you use to stream it. That matters.

by Robert McGarvey

Call it a sea change – a massive alteration of the US financial services landscape.  Everything seems different today and it is because of the pandemic.

What do you need to be thinking abut now to survive tomorrow?

An interview I did with Cornerstone consulting firm’s Brad Smith for a CUInsight article left me wanting more from Smith and here it is, a one-on-one podcast where we hear what smart credit unions are doing today.

Like what? Like recognizing that the mainstage role of the branch finally is over, probably forever. Smith is not saying he thinks branches are toast – he doesn’t – but he thinks their role is necessarily changing as many of us have gotten accustomed to not needing the branch and many of us also are simply fearful of places like branches.

Much financial services has shifted to digital and there it will stay.

“The challenge for credit unions now is learning to sell through the digital channel,” said Smith – and many institutions are playing catch up.  There’s no time to delay.

An unexpected problem, said Smith, is that the economy’s collapse has necessitated taking a new look at the FICO scores that used to enable confident and instant credit decisioning.  But that 800 score of May may be today’s 700 score and falling due to late pays, job loss, and worse.  

How can an institution provide the fast decisioning consumers now expect – but do it safely? Smith has thoughts.

Another big winner today: MRDC, said Smith. Even those who had scorned it are diving in.  

One more big winner: video chat.  We use it at work and we are now ready to use it in financial services. “Video conferencing will be another net winner,” said Smith.

An area where credit unions need to hop to it: credit card rewards programs need restructuring. The big players – Amex, Chase, Capital One – already are on the move.  Credit unions need to think fast and hard about this. But not many are, Smith admitted.

A last pandemic triggered push: a huge drive for cost savings and efficiencies. Many credit unions are looking to trim costs on commodity tech – think core systems – and redirect monies into strategic tech – such as true digital account opening.

Big changes are in motion.  Smith offers a road map in this podcast.  Take notes.

Hear the Smith podcast here.

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

And like this podcast on whatever service you use to stream it. That matters.

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

by Robert McGarvey for CU2.0

Everything is different today in financial services.

That means your credit union.

For the past decade, many credit union executives smiling agreed that they needed to make changes to keep pace with the mega banks—but times have been good and talk was cheap. Almost all clung to their traditional, branch-centric financial services practices.

The branch is king, long live the branch!

Except no more.

In many states, branches have been closed for months.

In just about all states, consumers are steering away from branches to better avoid the coronavirus.

You Can’t Go Back in Time

Enter Brad Smith, with Cornerstone Advisers, who thinks long and hard about what credit unions need to be doing to prosper in a post-pandemic world.

Continued at CU2.0

by Robert McGarvey

For years I have pondered a puzzle: why do financial institutions spend so much on cybersecurity and employ wonderfully smart and talented people – but the results are not as good as one would hope.

Frequently financial institutions simply are whipped by their criminal opponents.

Just look back on how DDOS – distributed denial of service – brought innumerable institutions to their knees a few years ago.  It took months for credit unions to get it together to repel the attack.

Then look at ATM jackpotting. New account opening fraud. ATM skimming. The list could go on and on but you get the message: criminals often outwit credit unions and banks and that is despite the money spent and the talent employed.

Why don’t credit unions gain the upperhand?

Hear the related podcast with Authentic8 CEO Scott Petry here.

A new report, sponsored by cybersecurity firm Authentic8, involves a survey of 163 financial services professionals, and it tackles just that question: why do financial services firms so often fall victim to cyberattacks?

Here’s a hint at the reason: “Financial firms have some of the best-funded IT departments of any industry, that’s no secret,” said Scott Petry, CEO of Authentic8. “What’s perplexing to me, with data breaches and privacy violations at an all-time high, is how deep the divide still runs between IT, compliance and legal professionals in many firms.”

The report’s title spells out the problem: “Surprising Disconnect Over Compliance and Secure Web Use at Financial Firms.”

Keep reading at CUInsight