McGarvey's Words: Journalist…Podcaster..Speaker

by Robert McGarvey

Frequent flyer programs now are in the crosshairs of climate activists who insist the programs contribute to global warming, the melting of polar ice caps and are greasing our slide into an environmental armageddon. Is it time to cash in your miles?

What’s fueling this fire is a report by Richard Carmichael of Imperial College London that explored how to change behaviors that contribute to too frequent flying, at least as judged by Dr. Carmichael.

Among his recommendations is this: “Introduce a ban on air miles and frequent flyer loyalty schemes that incentivise excessive flying.”

Carmichael’s argument is that the airline loyalty schemes encourage us to fly more, in order to collect the perks associated with accumulating miles, everything from status through, of course, more trips that become “free” because they are paid for with miles.

Eliminate the programs and that eliminates the incentives that fuel behaviors he wants to minimize (namely, flying more).

Of course that suggestion caused the frequent flyer internet to erupt in an angry holler – but here’s the real deal: maybe this missed the point entirely. The purpose of frequent flyer programs is not to reward passengers, it’s to make money, lots of it, for airlines.

There is no way the carriers will go along with significant changes in how their frequency program work, mainly because these programs are their golden geese. Passengers are forced to deal with ever higher miles totals to cash in for free trips – and more seem to settle on trading miles for merchandise such as fitness watches and computers and also gift cards.

But never forget: airlines are profiting immensely from these programs.

In a recent half year, American Airlines alone made over $1 billion peddling airline miles wholesale to partners. Per Skift: “While American reported the most marketing revenue for the year’s first half, other airlines showed larger year-over-year gains. None had a bigger increase than Hawaiian Airlines, which reported a 52 percent increase, though at just $34 million in marketing revenue, it was last among the airlines…. JetBlue also showed a major gain, raising its marketing revenue 23 percent year-over-year to $80 million.”

The LA Times headline neatly sums up the reality: “Frequent flier programs generate profits for airlines and frustration for travelers.“

Meatime, airlines increasingly award miles not for travel but for spending on credit cards that offer miles rewards. Per the Travel Weekly story: “Airlines’ credit cards in ‘arms race’ to profits.”

According to Travel Weekly, “airlines have much to fight over in the lucrative credit card market. The carriers earn income from the co-branded cards by selling reward miles or points to the issuing bank. So, for example, Citibank will purchase American AAdvantage points to award to new holders of the companies’ co-branded credit card. Similarly, banks purchase the airline loyalty points that they award cardholders for making purchases. “

A twisted irony emerges. Today’s email brought a warning from American Airlines that I had miles that would expire soon – but I know I need only take my AA card to Starbucks and buy a latte to win a reprieve because that brings me a miles reward and the clock resets.

Millions of miles are earned by people who never set foot on a plane. But their credit card gives them “miles” because they buy stuff and the airlines make money because they sell those miles.

Does it matter if nobody flies?

What business are the airlines in? Transportation – or financial services?

Personally, I wrestle with the environmental impacts of flying and I ponder how to reduce my carbon contribution – but I am pretty sure that frequency loyalty schemes are not a significant contribution to the planet’s environmental problems, certainly not on my part. Do we fly too much? Yep. Do we fly when we should get there another way? Yep. Do we fly places we shouldn’t go to any way? Yep.

But each us us deals with such issues in our own ways. A crackdown on loyalty programs by governments isn’t the way forward – and it isn’t going to happen because airlines and Wall Street will howl that the primary business is becoming not flights but selling miles. It may not be quite there yet. But it’s getting there.

There is much for us to gnash our teeth over. A looming end to loyalty programs and miles isn’t on the list.

There was a time when community financial institutions owned the home mortgage market. No more.  Fintechs dominate and mega banks aren’t far behind. Most credit unions are left to squabble over crumbs.

But just maybe there’s hope. At Finastra, Steve Hoke, Vice President, Product Management, Consumer and SME Lending, says the company’s Fusion Motgagebot Data Insights puts the power of data analytics in the hands of a community financial institution and the upshot is just maybe it can compete – successfully – against the fintechs and mega banks when it has data at its command.

Listen here

What percentage of your mortgages actually close? How does that compare with competitors? Don’t guess. Know. That’s the promise of this data.

Understand, the data is anonymized.  You cannot ask it to tell you how you fare against a specific competitor. But if you want to see how you do against others, it has the answer.

This is powerful stuff.  Hoke said Finastra is adding capabilities and hopes to extend it to more types of lending (auto loans for instance).

“We are giving community institutions insight into data that before they were flying blind about,” said Hoke.

This is one of a half dozen podcasts recorded at Finastra Community Markets in Chicago, October 2019.

What would it be like to go from being Head, Digital Customer Experience at Lloyds Bank in the United Kingdom – a trillion dollar institution – to being the VP for digital innovation at Colorado-based Canvas Credit Union, with assets around $2.5 billion?

Ask Lucy Donaldson, this week’s guest at the CU 2.0 Podcast. Listen here.

She made exactly that journey and she candidly talks about what a money center bank can do that a credit union usually can’t – but she also talks about the huge advantages a credit union has, from much better agility to strong, genuine community ties.  

She’s seen both sides and she says what she likes about credit unions.

A key point Donaldson makes in this podcast is that it’s time to stop talking about a credit union’s digital transformation – and time to accept that has become its business transformation. A credit union is its bits and bytes and knowing that makes the job of plotting institutional success that much easier.

Here’s a related podcast with Tanan Miles of ENT, Colorado’s biggest credit union.

This is one of a half dozen podcasts recorded at Finastra Community Markets in Chicago, October 2019.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

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

The question isn’t does meetings and events wifi suck – of course it does – the real question is why and maybe, honestly, the realer question is so what?

Let’s unravel this. For at least a decade event attendees have kvetched about wifi – mainly its slowness, sometimes its plain unavailability. I still recall, with a crooked smile on my lips, a travel tech conference I attended around 10 years ago at a plush Scottsdale meetings hotel where even the press table lacked wifi. Picture a half dozen travel tech reporters cursing and, well, you have the picture. Personally I giggled because I knew what I was witnessing was a lot better story than what I would have filed had the press table been equipped with functioning wifi.

The venue simply had underestimated demand for wifi and the demand crushed the inadequate signal that was provided.

How funny is that at a tech conference? Of course even I started to curse when I discovered my cellphone hotspot had no signal in the hotel basement where this event was held.

Incidentally, I don’t think that hotel was doing anything nefarious to block my hotspot – I believe it was just the location. But know that in the past some hotels in fact have blocked hotspots and had their wrists slapped by the FCC. Marriott even paid a $600,000 fine for such misdeeds.

Flashforward to now and I believe the usual wifi problem remains too many devices accessing too anemic a signal. Why? Usually it’s an unwillingness to spend what would be required to provide an adequate signal. That was true in 2009 and it is true today. In fact not much has changed over the past decade. Ask event planners and some 58% of meeting planners say weak or unavailable wifi has negatively impacted their events, according to data via EventMB.

This is an occasion for much teeth gnashing – vide the recent Skift article, Why Is Wi-Fi at Events Still So Bad? Reported Skift; “Sluggish internet speeds, a network that suddenly cuts out, and odd corners of the room that somehow have adequate service as long as you hold your phone at a specific angle. These are the problems that nearly every conference attendee, trying in vain to use the provided Wi-Fi, has faced at least once, especially at a large event.

“In fact, providing good Wi-Fi is one of the top challenges meeting planners face, with over half reporting ongoing issues with it.”

But maybe it is for the better entirely.

How so? There’s a long history of fake and malicious event wifi that usually aim at harvesting user log in data, sometimes have loftier aims such as downloading malware to users’ computers. It’s easy enough. Under $1000 in gear, usually put in a cheap travel bag, will create the wifi network, then name it, Free Event WiFi or [Hotel] Meetings WiFi.

If you build it, and say it is free, they will log in.

There’s also no real guarantee of safety when using genuine event wifi. Public wifi networks – especially at hotels (airports too) – have a long history of hacker eavesdropping. Public wifi just is not safe. Is it fine for checking scores on ESPN and the front page at WAPO? Probably. How about your checking account? Nope.

What about company email? Nope.

Here’s the deal: I don’t whine about feeble event wifi because, very probably, I won’t use it. I prefer to use a cellphone hotspot. Sure, I pay a few cents in data use – but to me that is a small price to pay for enhanced security.

When the cellphone hotspot isn’t powerful enough, lately I’ve used the built in VPN on my Google Fi phone to add protection to wifi access. Sure, I know VPN isn’t the security fix-all – but when public wifi is all I have on my cellphone I will use VPN to add at least a little security. And I will still mind what sites I access. My rule of thumb: if you don’t mind if a cyber criminal is looking over your shoulder as you surf, the sites are fine for access via public wifi with a VPN.

Bottomline: event wifi sucks. But that is okay by me. I don’t trust it, I urge you to similarly approach it with suspicion, and that is how to stay safe. If use it you must, use a VPN – even better use a secure browser such as Silo.

But stop complaining. Accept that wifi at your next event will suck, and be thankful. When you don’t use it you are safe.

Listening to “CU 2.0 Podcast Episode 61 Allan Brown on the Digital Revolution in Banking, Live from Finastra Community Markets” at https://www.buzzsprout.com/268738/1904291-cu-2-0-podcast-episode-61-allan-brown-on-the-digital-revolution-in-banking-live-from-finastra-community-markets #podcast # #cu #creditunion

Ask Allan Brown – a VP and GM, Digital Community Markets at Finastra – what keeps him up at night and his answer is simple: it’s trying to stay on top of the digital revolution that is transforming credit unions and community banks.  Brown also is very optimistic. His belief: community institutions that partner with the right fintechs can not only keep pace with the big banks digitally, they very well may be able to beat them at this game.

Along the way Brown discusses mega trends that are changing how financial services are delivered and two key trends, he says, are real time banking (it’s coming!) and much shrewder use of data to deliver better and smarter services to consumers.

“The future of financial services is going to be phenomenal,” says Brown.

This is one of a half dozen podcasts recorded at Finastra Community Markets in Chicago, October 2019.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

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

The CUtimes headline is a slap upside your head: Consumers Care More About Your App Than Your Branches.

Read it again.

Now explain this to me: I am a member of two credit unions, 2300 miles apart, both with assets over $1 billion – and yet they have the identical mobile banking app. Oh, sure, the branding window dressing differs – that is, the names and similar. But the actual guts of the app, what they in fact do, are identical.  Not kind of similar. Identical.

How can that be considered thoughtful branding, 2019 style?

And how many credit unions are on mobile apps that literally 4000 other credit unions have?

Which is where this explosive report from card issuer Marqeta blows the doors off oldstyle thinking.  According to it, Propeller Insights surveyed more than 2000 US and UK adults for Marqeta and the giant conclusion: the front door to a financial institution is an app not a branch.

Reported Marqeta: “One of the most striking results of the survey is how much more greatly people value the digital banking experience over the physical equivalent: 62% of Americans already do the majority of their banking online, compared to just 31% of Americans who say they primarily bank in person.”

Marqeta added: “When asked about how they would feel if every physical bank branch was closed down tomorrow, only one-third of US consumers (33 percent) and one quarter of UK consumers (23 percent) said they would be inconvenienced by this.”

Look through a random sampling of credit union trade publications and count the stories about branch remodels – you’ll see lots.  Why? Is this even an issue anymore?

What are you doing to make your app distinctive? Unique? How many stories have you seen about that?

None, right.

Can you in fact do anything at all or is an app shoved down your institutional throat by a vendor and you can take it or leave it?

Hold that thought.

Chew on this Marqeta finding: “69% of Americans expect to use their mobile banking app regularly in the next three months, while just 30% expect to visit a physical bank branch.”

Personally I do not plan to visit a branch and in fact the only times I set foot in a branch is when I am wearing my reporter hat and want to experience a branch first hand or when something has gone terribly wrong with my account and I am in the branch to shake things up.

Incidentally, Marqeta data say that fixing errors no longer is that compelling a reason for visiting a branch: “The physical branch didn’t even factor as important to consumers when they imagined having to fix an error that their bank had made: 28 percent of UK consumers and 23 percent of US consumers said it was important for them to be able to visit a bank in person to fix a problem, while 54 percent of US consumers and 51 percent of UK consumers said it was simply more important that it was fixed quickly, through whatever channel necessary.”

For 99% of us, 99% of the time there is no good reason to set foot in a branch. Ever.

I urge you to open an account with Chase or Capital One or USAA.  Feast on their mobile apps and ask yourself, is ours as good?

Spoiler alert: it isn’t.

Marqeta goes on to warn about the threat posed by digital only banks – sometimes called challenger banks – but I don’t see much threat there. Not to credit unions.

But I see enormous threats from the mega banks with IT budgets bigger than the GDP of mid sized countries and when they go out to hire developers they look for people with strong consumer app experience, that is, people good at writing code that engages people and creates a fun experience.

Has anybody, other than the salesman who sold you your mobile app, ever described it as fun or engaging?

What can you do to make your mobile app your app?

Sure. I know a handful of very big credit unions – think over $5 billion – have custom mobile banking apps.  

Good for them but what can the vast majority of credit unions, with much less resources, do to compete in today’s digital world?

That has become the critical question and it’s now a matter of life and death.

Forget the branch, it’s the app that matters – CUInsight http://bit.ly/37ehUa4

by Robert McGarvey

It’s that time of year: wherever I fly to it’s as though the plane is a sick ward or so it seems amid the coughs and sneezes that fill the air. The question is: can flying make you sick?

I ask the same question in church, at theaters, wherever I will sit for an hour or three amid people who are coughing. But I especially ask it on planes because the quarters are snug, the air is recirculated, and at one point I kept track of diseases and my flying and it honestly seemed that about half the time I in fact came down with a cold or flu after flights in the prime cold and flu season. Was this in my mind? Or do we in fact expose ourselves to disease when we fly?

Understand, airlines can and sometimes do refuse to board an ill passenger. According to the World Health Organization, the judgment hinges on whether the passenger “is fit to travel, needs medical attention or presents a danger to other passengers and crew or to the safety of the aircraft.” The decision rests with the captain. And of course we all remember flying with obviously ill people so enforcement of this right to exclude is not consistent. I do not personally know anybody who has been denied boarding due to illness, at least nobody has told me they have been and people tell me all manner of airline horror stories, just not one about exclusion due to illness.

Also know that airplanes are filthy in many instances. Travelmath sent a microbiologist to collect samples from five airports and four flights and it reported “airports and airplanes are dirtier than your home .”

It elaborated: “Surprisingly, it is the one surface that our food rests on – the tray table – that was the dirtiest of all the locations and surfaces tested. Since this could provide bacteria direct transmission to your mouth, a clear takeaway from this is to eliminate any direct contact your food has with the tray table.”

Canadian Broadcasting Corporation, in a broader study, concluded similar. But it found that the headrest is the most contaminated item on a plane.

It added: “the most concerning finding…was E. coli bacteria detected on both the seat pocket and the headrest. The presence of E. coli indicates fecal contamination, and the bacteria can cause intestinal infections, with symptoms that can include diarrhea, vomiting and abdominal pain.”

It is a very good idea to bring wipes on a flight and to wipe down the tray table, headrest, and the arm rests. Sure, you may look kooky to fellow passengers – but you are disinfecting and they probably aren’t. Who’s more likely to get sick?

And be meticulous about washing your hands.

The omnipresent airplane contamination sets the stage for the big question: if you fly on a plane with passengers suffering from infectious diseases (colds, flus, etc) are you likely to get sick? Researchers have looked at exactly that question. Their paper starts this way: “With over 3 billion airline passengers annually, the inflight transmission of infectious diseases is an important global health concern. Over a dozen cases of inflight transmission of serious infections have been documented, and air travel can serve as a conduit for the rapid spread of newly emerging infections and pandemics.”

The upshot, per the Telegraph, is that it’s not our imagination that we can get sick because we flew: “if you are seated within a row or two seats of an infected passenger you have an 80 per cent chance of catching a bug.”

Another take-away: “the study showed that a sick cabin crew member was likely to infect an average of 4.6 passengers per flight, and that those seated in the middle and aisle seats, due to their proximity to crew, were at the greatest risk.”

Remember that: it’s not just fellow passengers but also crew who may be infectious.

Bottomline: you are not imagining that you caught a cold on your last flight – not if you were seated next to a cougher.

Can you protect yourself? If you can, change seats. Get yourself at a remove from a person you believe to be ill and that is buying yourself some better health because just about all research indicates that proximity is key in spreading diseases inflight.

Put aside the scare headlines and, really, flights are not that risky for our health, not even in cold and flu season. Take a few precautions and probably you’ll be fine – especially if you can keep a distance from obviously ill passengers and crew.

by Robert McGarvey

Name the single most important IT system in your credit union.

Spoiler alert: it’s not your core.  Not anymore.

Who says that? Mike Hatch, a VP and national sales manager at Finastra, and a core expert. Hatch knows the core is crucial but he also believes that it’s the institution’s digital orientation that will shape its future.

Core is part of that.

But it is not the end all.

Another question: is your core system holding your institution back? Can you easily – and inexpensively – integrate cool fintech technology into your core?

Say no and you are telling the truth.

But it’s the wrong answer. You want an open core that lets you deliver the tech your members want.

Credit unions are looking for ways to be different, says Hatch. An open core helps there.

Think cores are boring?  You won’t think this podcast is boring – and you just may find yourself wondering if now is the time to initiate a core conversion.

Scary? You bet. But going out of business is scarier.

Listen up here.

This is one of a half dozen podcasts recorded at Finastra Community Markets in Chicago, October 2019.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

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

Can your cybersecurity keep hackers at bay?

Can cybersecurity be used as a marketing tool by a credit union?

Can a banker in fact become a credit union executive?

For answers, listen to this podcast with Daniel Ford, CIO at Jovia, a $3+ billion credit union on Long Island that you probably know as NEFCU.  The rebranding occurred a month ago.

Ford joined NEFCU via First Source Bank in South Bend (IN), where he was  the chief information officer, responsible for infrastructure, cybersecurity, and application development.  We asked him bluntly: can a banker in fact fit into a credit union’s philosophy?  You can guess his answer but give it a full listen. He makes points to remember.

Podcasts in this series that explore bankers and credit unions include Jim Blaine, Bucky Sebastian, Gary Oakland, and Marc Schaefer. 

Ford also talks, at length, about what a CIO needs to do to stay on top of cybersecurity and also how to work with vendors.

As for using cybersecurity as a marketing tool, don’t be too quick to say no way. Ford offers a tactic that just might work. Of course you want to hear that.

Listen to the Ford podcast here.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

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

LISTEN HERE

by Robert McGarvey

Just when you perhaps thought it safe to shrug off flygskam – aka flight shaming – a new investor note out of Citigroup is a slap in the face. The Citi bottomline: this stuff is serious and it will impact you.

Per Bloomberg, “The cost of offsetting planes’ carbon emissions could become as much as 10 times higher than the airline industry currently estimates, Citi analysts including Mark Manduca said in a note on Wednesday. For economy seats alone, the cost could balloon to $3.8 billion a year by 2025, hurting airlines’ earnings, they said.”

Germany, meantime, is boosting carbon taxes on air travel by as much as 75% in 2020.

Sweden has had a tax for over a year.

Other nations will follow.

At least some men apparently have a problem accepting Greta Thunberg, the Swedish teen who has become the poster person for the flygskam movement, but face up to the fact that we have significant environmental issues that need dealing with. And air travel is part of the problem.

Yes, I know there are political figures who don’t see matters this way and, no, I don’t care what they think anymore than I care what flat earthers or anti-vaxxers think.

Besides, the Citi note changes the equation. What it says is that flygskam is no longer a fringe issue, that in fact it will impact all of us who climb on airplanes.

The Bloomberg piece continued: “‘The so-called winners of this generational shift will likely be the rail operators, governments, forest owners and carbon schemes,’ the Citi analysts said.”

Meantime, at least some researchers are saying airlines should be coerced into ending frequent flier mile awards mainly because this causes bad behaviors. Suggested one report on its list of recommended actions: “Introduce regulation to ban frequent flyer reward schemes that stimulate demand. “

Do I think we will soon see a drop in business travel via air? I see companies trimming the number of trips – and making contributions to carbon offset funds. I also see companies nudging more of us to climb behind the wheel of our cars or, even better, hopping on a train (read this Chris Barnett column on the glory of train travel in Canada).

Mainly, though, I see business travel carrying on – there will be reductions in the number of flights, very possibly some private plane shaming (said to produce 10x more carbon per passenger than commercial planes), and many companies will mount PR campaigns to highlight the good they will tell us they do for the environment.

Frequent business flyers – who log 6+ trips per year – individually produce a staggering 3.1 tons of carbon annually. There will be pressure to reduce that number and there will be public shaming. When everytime you say you are off on a trip, a child or grandchild sends you a photo of a starving polar bear, at some point you will cut back.

But that will be small changes to what I think may soon become a cataclysmic impact on leisure travel.

With business travel there are rationales – it is good for the economy, creates jobs, spreads the wealth, etc.

With leisure travel, good luck with the hunt for defenses.

Reported the New York Times: “Our climate just can’t tolerate widespread frequent flying,” said Dan Rutherford, a director at the International Council on Clean Transportation . “At some level we need to figure out, collectively, which flights are necessary, and which are luxuries.”

Leisure fights, they are talking about you.

Have you ever whimsically hopped on a plane from Newark to Madrid, mainly because the price was so low and it’d been a while since you toured the Prado? I have (it’s one of my personal favorite trips of all time) and I have impulsively flown across the Atlantic to Dublin, also to Berlin, many times to both in fact.

How cool was it when you are asked how was your weekend and the answer is, ah, the Guinness was grander on the banks of the River Liffey.

And now you just may get booed or mocked, maybe bombarded with skinny polar bear pix.

The days of impulsively flying 3000 miles to start a four day weekend are over.

Face reality: when the Wall Street guys go bearish on air travel because of carbon concerns, it’s time for a rethink. And the real question now has to be: Do I need to go? The other question: Do I have to fly? And in 2019 expect to hear as many no’s as yesses.