McGarvey's Words: Journalist…Podcaster..Speaker

By Robert McGarvey

 

A new study out of Transunion – Generation Revealed: Decoding Millennial Financial Health – is a goldmine of data for credit unions that are struggling to make sense of their Millennial members and prospects and are also struggling, in many cases, to find profits in serving them.

The excellent news is that Millennials want credit products. The bad news: guided by the borrowing habits of the prior generation, you probably are offering Millennials loans they don’t want.

There are good reasons to be struggling with Millennials (born 1980 – 1994). The Transunion data say that they are a generation different – sharply different from the Gen X group (1965-79) that preceded them. For instance: they carry far fewer credit cards than do Gen Xers.  Their participation in using bank credit cards is 22% less than Gen X.  They use private label credit cards 23% less.

Why? The Transunion study points out a blatant fact: Millennials, many of them, came of age in the economic downturn of the Great Recession. Notes Transunion: “As many Millennials were entering the workforce, they faced economic uncertainty during the Great Recession when the overall unemployment rate soared to nearly 10%. Consequently, Millennials aged 25 to 34 have a 5% lower median income than Gen X consumers at the same period of their lives.”

They also were hit by the CARD Act of 2009 which severely limited the ease of obtaining credit cards by those under 21 years of age.  Gen Xers, many of them, signed up for credit cards during their freshmen orientation.  Not so Millennials.  

Dodd Frank also made it harder to get mortgages.

Add those three facts together – a struggling economy, more stringent card issuance, much more stringent mortgage issuance – and it is obvious that Millennials would have a very different relationship to credit than Gen X.  

According to Transunion, they carry half as many credit cards in their wallets as Gen Xers did at the same age. They also have an average balance $11,000 less than did Gen Xers.

Then there are myths that inhibit offering the right loans to Millennials. For instance, many believe they are happy as renters with no desire to become homeowners.  Not so, says Transunion.  “While Millennials may delay home purchasing by a few years, 74% of Millennials who don’t already have a mortgage plan to purchase homes at some point.”  

A fact however: access to mortgages still lags for Millennials.  Thy want to be buyers but are struggling to make that happen.

Another myth: that Millennials don’t want to own cars.  Said Transunion: “the myth that Millennials don’t want to own a car is simply false. More than 80% of Millennials report owning or leasing a car.”  

In fact, Transunion says that Millennials are opening car loans between the ages of 21 and 34 at a 21% higher rate than Gen Xers.

Mark that as a key opportunity in pursuing Millennial loan business.

But there are other, surprising opportunities.  Such as personal loans. Said Transunion: “Millennials open more than twice as many personal loans as Gen X. This trend is likely driven by the emergence of online lenders creating digital experiences that provide more rapid access to personal loans.”

Read the last sentence again. It fingers where credit unions are leaving lots of business on the table.  Transunion loudly made the point more plainly: “More than 60% of Millennials with a personal loan report getting it from a bank or credit union.”  

That means 40% of this borrowing is by Millennials using non traditional lenders – often online operators who ask a few questions and if satisfied with the answers, speed off a personal loan. 

Also understand that where a Gen Xer might have taken a cash advance against a credit card, or maybe run up a balance on a traditional credit card, a Millennial, in many cases, will opt instead for a personal loan.

Is your credit union set up to handle this demand?

Fintech startups definitely are and daily there are new ones.  According to Transunion, “The FinTech sector, which principally acquires customers online, grew from just 2% of the personal loan market in 2009 to 24% by Q3 2016. Engaging through digital channels like social media has been an effective way to reach Millennial consumers.”

Who hasn’t seen the TV ads for these new breed lenders?  They are eating your lunch.

Bottomline: there are rich lending opportunities with Millennials. Maybe not so much mortgages.  Credit cards also offer dwindling potentials. But definitely car loans and, unquestionably, personal loans.  

Millennials are the future. They want to borrow money. Just offer than the kinds of loans they want, through the channels they use.  

 

By Robert McGarvey

Mark your calendar.  October 19th is National Credit Union Day and that is an ideal day to turn a spotlight on your credit union and seek to bring in new members and build stronger ties to existing members.

Sure, National Days of…have gotten silly. There are so many there’s even talk of a National Marmite Day, a spread with few fans in the US.  

But credit unions should definitely not miss out on their day on centerstage. The third Thursday in October has been National Credit Union Day since 1948 and the core idea is to use the day to make clear that credit unions are not banks.  

This year’s theme is “Dreams Thrive Here.”

“The theme reflects the initial results of CUNA’s ongoing research into what resonates with consumers about credit unions,” said Jeremiah Tucker, CUNA consumer engagement program lead. “Credit unions are good at showing how we’re the socially responsible choice for banking, but we also need to remind consumers that credit unions are their best choice for personal success and satisfaction.”

CUNA also has built in a charitable component where a donation is made by participating credit unions to a local Children’s Miracle Network Hospital for every debit and credit card transaction by members on October 19.

Want more specific ideas about how to celebrate?

A page noting the day on your website is a good idea.

WNC Community Credit Union is opening its doors from 11 a.m. to 2 p.m. and is serving free lunch – sliders, chips, cookies – in a day of celebrating its members.  Excellent idea.

United Equity Credit Union is doing similar – serving lunch to members from 11:30 a.m. to 1:30 p.m.

VUE is holding an open house and serving coffee and doughnuts all day, from  8 a.m. to 4:30 p.m.

Fox Communities Credit Union decided a day isn’t enough so it is celebrating National Credit Union Week, October 16 through 21.  There’s a chance to win a $100 gift card.

But know that you can up the ante on all this.  How?

Get up a one page event notice on your website.  There are many members who rarely step into a branch.  So put up a notice where they are likely to see it.  Do that now.

Prepare a one page info sheet that explains how you are not a bank – and in fact are better than a bank.

A one page sheet on the Rochdale Principles that underlie every credit union is another good handout.

Members of CO-OP’s and CuLiance’s ATM networks need to tout the size of their ATM networks.  

Serve snacks from food cooperatives such as Cabot Cheese and Blue Diamond almonds and Ocean Spray cranberry juice.  Here’s a USDA list of the largest and of course it’s smart to emphasize cooperatives in your own community.

A key message: a credit union is not an eccentric, microscopic bank. In fact it is something entirely different. Better.  Member owned.  And every credit union is part of huge movement that is global.  

Open the doors not just to members but also people in the community. Be ready with account opening materials.  Have a highly trained staffer who is good at opening accounts in a few minutes. Make it fast.

Reach out to local media – newspapers, TV, radio – and seek coverage of National Credit Union Day.  Do that right now.

Get aggressive in putting the word out.  A lot of credit unions – most – are passive when it comes to marketing but that just doesn’t work in a world where the money center banks flood the airwaves with ads and don’t forget all those branches which may be empty but they definitely function as billboards.

It just is easy to be unaware of credit unions.  

That’s why this one day is crucial.  Use it wisely. Loudly.  Get out your word.  Tell your story.  The facts support you: a credit union is a better deal for most consumers.  So let them know that.

 

 

By Robert McGarvey

 

Hotel rewards programs are not created equal. That is a clear takeaway from the 2017 CarTrawler Hotel Reward Payback Survey. Some programs are three times as generous as the stingiest.

Some programs definitely are worth joining and using.

Others are worth it only for the free perks such as WiFi.

I know about the latter because I belong to a number of programs but only in a haphazard way. I have no recollection of ever earning a free room for points and probably have joined the very same program multiple times over the years, mainly because I wanted a perk and afterwards I forgot that I belonged.

The CarTrawler survey came as a wake up call for me.

Here’s the study’s lead: “Wyndham Rewards returns an average of 16.7% from room night spending as reward stay value in the third annual CarTrawler Hotel Reward Payback Survey. That’s 3+ points higher than the brand’s 2016 result and a 211% higher return than the reward value provided by Starwood’s SPG, which was ranked last among the six hotel loyalty programs at 5.4% for reward payback.”

Read that again. It is saying Wyndham is more than twice as generous as Starwood and it also says that Wyndham recently sweetened its deal. That latter observation says that we need to monitor our programs because, apparently, they do change.

We also need to start by knowing which programs are really stingy. Starwood is the worst, returning a bit over a nickel in rewards for every dollar spent. IHG is not much better – it ponies up 6.7 cents. Best Western comes in at 7.4. Hilton at 7.5. Marriott at 8.8. And Wyndham at a staggering 16.7.

Spend a dollar at Wyndham – which includes budget oriented properties such as Super 8, but also swankier digs such as Dolce. In the mix are also Ramada and Howard Johnson – and you get back 16.7 cents in rewards.

Note: if you are an elite road warrior who plays all the edges and also has a branded credit card, this hotel analysis may not fully apply to you. CarTrawler said: “Members that have elite status and use a program’s co-branded credit card to pay room charges benefit from an array of bonus point possibilities. The value provided by reward nights is traditionally the most important attribute for many members; the results presented here don’t attempt to assess all the benefits provided by hotel loyalty programs.”

That is, for casual hotel bookers – people like me – the CarTrawler analysis works fine.

CarTrawler also noted some stunning possible wins playing the rewards programs. It pointed to an October 14 2017 stay at the New Yorker in Manhattan – a Wyndham. “The reward payback for the Wyndham New Yorker was a stunning 50.7%. Booking a room on that date cost $610 or an incredibly modest reward price of 15,000 points. That combination, and the Wyndham Rewards accrual rate of 10 points per dollar spent (in addition to ongoing bonus points) delivers a very generous reward payback.”

It found a 17.8% return at Hospitality House in New York, a Best Western, on September 21.

By contrast, a February 2017 stay at the Westin Grand Central returned a 1.8% reward. That’s roughly 1/10th the reward of the Hospitality House.

Just when you are about to cross out Starwood, know that its co-branded American Express card offered the highest reward value returned on everyday purchases of hotel credit cards, 2.7%, according to CarTrawler.

The IHG Rewards Club Select Credit Card came in last with a 0.7% return.

Wyndham, by the way, came in second with its Rewards Visa card with a 2.5% return.

Should you throw your business to Wyndham? Just maybe if it has the right locations in places you travel to regularly.

But the real takeaway is this: maybe it’s time to begin really playing the hotel rewards programs. Airline programs are reaching a point of little value for most of us. Personally I accumulate miles via Amex but have begun to shrug off airline miles as such. 

But just maybe there is balm for our wounds at the hotels.

 

Do Your Members Understand A Credit Union Is Not a Bank? – The Credit Union Exchange http://bit.ly/2fYYsEQ

 

By Robert McGarvey

 

Why don’t airlines hear us?

Why don’t they pay attention to us?

Customer experience management firm Clarabridge recently set out to explore those questions in the context of the airline industry and the results – found in a  10 pp. report – are chilling.

Clarabridge explained its goal this way: “Clarabridge conducted an international study intended to uncover consumers’ true behaviors and expectations around air travel so that airlines can identify actionable takeaways for improving the customer experience.”

The method:  Survey more than 1200 in the US and UK. Respondents were 18 to 60. Clarabridge also analyzed 750,000 online comments, harvested at Facebook, Trip Advisor, et. al.

A starting point: 69% of US consumers have never submitted a complaint or feedback to an airline. The number climbs to 73% in the UK. Why? Because we don’t think the carriers listen More than one third of us say we don’t submit comments because airlines don’t listen. And 46% of US consumers say that when they have submitted complaints or feedback they haven’t gotten a response.

Read that last bit again. Half of us insist that when we’ve offered feedback all we’ve gotten in response is the sound of silence.

Wow. Why bother?

Next question: what matters more in booking a flight, price or staff attitude?  Attitude wins out according to Clarabridge. “38% of American travelers, and 41% of British travelers are in agreement that staff attitude is most important.” Just 35% say price is most important.

Clarabridge added: “85% of American travelers who would recommend a particular airline cite staff attitude as the number one reason why.”

This is fascinating. I have traveled for 40+ years and I have witnessed a steady deterioration in airline staff attitude. The overtly anti passenger gestures that recently have won so much press notice are, on the one hand, anomalous but on the other hand they really are not surprising.

Often passengers, at least in coach, seem to be viewed by airline staff as nuisances and burdens.

You just don’t see such rampant rudeness even in fast food restaurants.

Flashback to the mid 1970s when I began to fly with regularity and staff was genial, helpful, pleasant.

And it went downhill from there.

Honestly, however, I have to say that front cabin staff are substantially more genial even today. I don’t recall seeing the indifferent hostility that often seems common in coach. And that means good customer service can still happen on airplanes. That’s underlined in the Clarabridge research. “67% of American travelers say that they detect that crew members treat first class travelers better than other passengers, and nearly ¾ of UK consumers (72%) detect the same,” said Clarabridge.

I’ve personally flown both classes of carriage and can say that, definitely, everything is better up front.

I’d also acknowledge that airline management treat employees at airport desks and flight attendants terrible, and it’s the passengers who pay the price for this.

But when blame is to be heaped on people, shovel it on the bosses in corporate headquarters.

Clarabridge’s third observation is that carriers need to dramatically improve their digital feedback channels. Here’s why: “Of the customers who do frequently provide feedback, 42% and 46% (in the US and UK respectively) do so via email, and 13% and 11% by social media. Across both regions, more than half of all customers utilize digital tools in some way to comment on their travel experiences,” said Clarabridge.

Make it easier for us to offer feedback and we just may – and that feedback may be a goldmine of data for airlines as they seek to improve their competitiveness.

Airlines have much to gain if they can hear these research findings. That’s because Clarabridge reported: “A large portion of American travelers (31%) are agnostic when it comes to airline brand allegiance, and a quarter of consumers in the UK also report no specific airline loyalty.”

Clarabridge pointed out: “This presents a huge opportunity for airlines to stand out from competitors by truly listening to the Voice of the Customer. Airlines can get an edge on competition if they understand exactly what consumers want from their air travel experiences.”

Indeed.

Carrers need to hear us. And respond to us. They also need to treat their own employees better and encourage them to treat us better.

None of this is hard. None of this wasn’t commonplace on airplanes 40 years ago.

It’s easy. Carriers just have to acknowledge that the have a problem. And they need to know they can fix it.

 

By Robert McGarvey

 

Just maybe the fast track to greater credit union success is staring just about every credit union in the face and that’s the cooperative next door.

Mark your calendar. October is National Cooperative Month and, by some counts, there are around 40,000 cooperatives nationally that are joining in the celebration.

What are you doing to celebrate?

Core advice is get busy putting together cooperative events with other co-ops to celebrate your community, also your cooperative essence.

Do your members know you are a cooperative?  This month is the time to remind them, and to help them recognize that in lots of ways America’s economic success has roots in the cooperative movement. Lot of ideas are at the National Cooperative Business Association. Here are plenty of suggestions for co-op month activities.  

But what I want you to mull is a stretch goal: How about making every month a Cooperative Month in which you look for ways to celebrate the cooperative difference and how cooperatives benefit their communities.

It’s about ownership by members, not shareholders, and the foundation of every cooperative is putting people before profits. That’s a message that resonates especially loudly today and it’s a message that is ideally suited to Millennials. Millennials, the pollsters tell us, want to do business with people they trust and 40% say they want to buy locally.

How does that not say now is an ideal time to be a credit union? How does it not say that when Millennials understand what credit unions are about – local, member ownership, people before profits – they will want to become members?

And other cooperatives will help you get that message out loudly and persuasively.  In many cases you just have to ask for help.

Know this: Cooperatives are a key part of the American economic fabric – and by accentuating the cooperative backbone of every credit union, a savvy credit union can leverage that DNA to build better relationships that stimulate growth.

Who to partner up with? Look at the National Cooperative Bank’s annual list of the top 100 cooperatives.  You’ll know a few names.  Navy Federal places 9th on the list.  State Employees Credit Union in North Carolina ranks 37th. Pentagon Federal is 65.  BECU is 88.  

That means most of the nation’s biggest cooperatives are not in fact credit unions.  What many are is agriculture cooperatives (Sunkist, Cabot Cheese, Land o’Lakes and Blue Diamond are among the better known).  Many are in retail – think Ace and True Value.  There are numerous electric coops, which remain essential in electrifying huge swaths of rural America.  

What’s important – and exciting – about these cooperatives is that they are succeeding and they are rooted in cooperative principles.  

And many just might want to join with you in celebrating what makes cooperatives special.

Paul Stull, CEO of the Credit Union Association of New Mexico, told me: “Credit unions have access to the power of the cooperative.  They can share ideas, technology, employees.  They can enjoy great value through cooperation.”

Indeed.

Another suggestion: look for cooperative partners where you already shop and spend money.  If you are a customer of REI, ask the store manager.  If you buy your nuts and bolts at ACE, ask the local owner.

How can other cooperatives help you out? The big agricultural cooperatives are well known for a willingness to provide product samples at some meetings.  Ask and you may receive a bounty. That’s just one for instance.  Think creatively and there are plenty of ways for a cooperative to help another.

The real point: it is too easy for a consumer to see a credit union as a kind of one-off, eccentric and small bank – but hit home the message that a credit union, as a cooperative, is part of a large movement that aims to put more power in the hands of consumers and also in many cases workers, many in the public will applaud the idea.

What had seemed small and eccentric instead is seen as something that is part of a big movement that empowers those who get involved.

Want another starting point? Put on a quick workshop for employees that reminds them that the credit union is in fact a cooperative and that puts it in a tradition that traces back to the Rochdale farmers and their struggle for a better life in the 1840s.  

And urge employees that where appropriate – in new member onboarding for instance – that they get across the message that a credit union, definitionally, is part of something big and glorious.

Don’t assume they know all about this. Many probably don’t. So building a stronger cooperative movement can start with a little employee education.

And just keep building one cooperator at a time.  

 

 

By Robert McGarvey

 

There’s good news and bad when it comes to how business travelers can best cope with the new 48 hour required cancellation imposed by Marriott and Hilton.  Cancel later and you will be stuck with a one night stay penalty fee.  Ouch.

That adds up.  Hotel booking service HRS has estimated that the 48 hour policies will cost business travelers 2% in increased hotel costs this year. But there are smart ways to get this down to zero,

Understand, too, that Bjorn Hanson at NYU is forecasting a bonanza year for hotelier fee revenues.  According to Hanson, “total fees and surcharges collected by US hotels are forecast to increase to another record level of $2.7 billion in 2017. Fees and surcharges were higher than forecast for 2016; although occupied room nights were lower than anticipated, fees and surcharges were higher, with the largest increase in cancellation fees.”

Yep – cancellation fees are lining the pockets of hoteliers.

Hanson noted: “The industry also has become stricter about cancellation of reservations with fees for cancelling within two days of arrival as most common, but three days for an increasing number of hotels.”

He did not break out the exact contribution to profits of cancellation fees.

Hanson did wryly note: “Fees and surcharges are highly profitable; many have incremental profitability of 80 to 90 percent or more of the amounts collected.”

You bet.  Whacking a traveller for a room night just because he/she cancelled 47 hours before arrival is a pure profit play.

And when US hotel occupancy is about 60% who’s kidding whom that hotels need an advance notice of a cancellation in order to manage their supply of rooms.

Hotels did fine managing rooms up until a couple years ago even though the cancellation deadline was typically 4 pm of the day of arrival.

All that has changed is that the big hotel chains – enviously eyeing the fee income of airlines – want their share and they think they have us over the proverbial barrel.

They don’t.

Enter independent hotels.  According to a recent story in Hotel News Now, “Indies look for flexibility in cancellation policies,” said the headline.

The subhead got more specific:  “Owners of independent hotels said they’re unlikely to change their policies in light of moves by the major brand companies toward tighter cancellation windows.”

Richard Millard, CEO of Trust Hospitality, a boutique hotel management company, told HNN when asked if he planned to impose cancellation policies in line with airlines: “I don’t think we have the clout to do that,” he said. “It’s a different business model.”

Many independent hotels are sticking with a 24 hour cancellation policy or, in some cases, the classic 4 pm cancellation.

The odds – room availability – are on our side.  Don’t forget that when tempted to look at a Marriott or Hilton. If a meeting or event is there and you want to be in the thick of it, sure, go for it.  I’d probably do likewise.

But when the whole city is before me I will duck Marriott and Hilton and others with long cancellation windows and book elsewhere. I am sure I won’t sleep on a park bench.

At 3:45 pm PT on a Tuesday in late September I checked availability in San Francisco for that night. The Marker, a Joie de Vivre hotel, wanted $221 on Hotel Tonight.  The Hotel Zoe was mine at $209.  The Argonaut wanted $292.  Many more hotels wanted my business in Hotel Tonight.

Alternatively, per the HNN article, look for independents where you travel.  Many will be much more flexible than are the big chains that seem delusional in their sense of marketplace power.  When 4 in 10 hotel rooms are empty every night, it hardly seems hoteliers have the whip hand.

Incidentally, multiple San Francisco Marriotts had room available that very night, for booking at 3:45 pm PT. Which means you could do it on the BART from SFO into the city and that way you know you won’t be hit with a cancellation fee.

There’s essentially no excuse for getting hit with a Marriott or Hilton late cancellation fee. If you want to stay in those properties just don’t book until you land in the destination city.  Simple. Cost effective. And there will be plenty of rooms just about everywhere.  

 

 

By Robert McGarvey

 

The multi-factor authentication tools your credit union implements may win you members – but the wrong ones just may cost you members while driving away mobile and online banking users.  It’s also very, very possible that soon authentication will become a key battleground in member retention.

That’s how important multi-factor authentication (aka MFA) has become in today’s financial services.

Passwords plainly are broken.  Between epidemic breaches – Equifax for instance – and rampant user laziness (such as using the same password at multiple sites), a password alone is not adequate protection for most accounts involving money.

Enter multi-factor authentication which, often, rides on top of a password. The password may be adequate for low value tasks but when bigger money is on the line, it’s time to bring out multi-factor to provide beefed up protection.

FFIEC provides interesting insights into the role of multi-factor authentication in financial institutions:  “A common example of two-factor authentication is found in most ATM transactions where the customer is required to provide something the user possesses (i.e., the card) and something the user knows (i.e., the PIN). Single factor authentication alone may not be adequate for sensitive communications, high dollar value transactions, or privileged user access (i.e., network administrators). Multi-factor techniques may be necessary in those cases.”

Plainly we have entered an age where consumer expectation about the availability of multi- factor has vaulted ever higher. Personally I use multi-factor on Amazon.  I also have it setup on Google.  So of course I expect it, and use it, at Affinity Federal Credit Union.

Understand this however: there is ample evidence that many consumers rebel against MFA that is deemed too cumbersome, too much of a hassle.  It’s something of a double-bind. They want to feel protected by their financial institution but they also don’t want to feel hassled.

Yet good, trustworthy MFA increasingly looks to be critical in fueling credit union account growth, especially usage of lower cost digital channels (online and mobile).  But lots of Americans shy away from online and mobile banking because of fears of data insecurity in the digital channels. Multi-factor can be the cure.

Mark this as a key 2017 challenge: offering members MFA they will use, gladly, and that leaves them feeling their financial data are safe.  

That is easier to say than to deliver.

Increasingly, multi-factor offers a choice among something the user knows (a PIN perhaps, or a favorite teacher in grammar school), something the user has (a cellphone perhaps or an ATM card), and something the user is, that is, a biometric solution and gaining traction there are fingerprints of course – think Apple Pay and Touch ID – but also retinal scans, which have gained popularity at money center banks (particularly Wells Fargo).  

More attention nowadays is going into biometrics because, thanks to Apple, more of us are comfortable using a biometric tool to perform a financial task and, to most of us, biometric factors seem beyond the reach of most criminals.  

What should you offer? Best advice is to offer members a choice of multiple tools and let the member decide.  Some people still think retinal scans are creepy, others have seen it at high security office buildings and like them.  There is no disputing member tastes.

Put out a menu of maybe five or six tools and let members decide what they like.

Key is that what they use cannot seem intrusive or a hassle – to them. They get the only vote that counts.

Also good are protective tools the consumer may be unaware of, such as looking for trusted, known devices and trusted, known locations. When a member who lives in Phoenix, AZ is signing into a sharedraft account at a local credit union, that institution can breath easier when it recognizes the computer and the member location – and the member has no need to know these checks have been made.

Key also is providing flexibility. A member may like using voice as a biometric when signing into the credit union in the early a.m. from home – but probably would think it weird when signing in from a busy Starbucks at noon.

Give members choices and they will use them.

Also stay on top of news developments and, definitely, there is news in the multi-factor space.

A sore spot to watch is SMS which, frequently, figures into multi-factor authentication, where a PIN is sent to a registered cellphone number. The user then inputs that PIN at a banking site.  But – increasingly – there is evidence that smart crooks have figured out how to simply steal cellphone numbers and thereby hijack the SMS traffic.  Worries are big enough that the National Institute of Standards and Technology (NIST) has begun to back away from SMS, as awareness grows that the safety of the cellphone channel is in doubt.

Right now, cellphones and SMS remain integral in the multi factor techniques deployed by most financial institutions but smart money is betting that will change unless cellphone carriers impose better processes to safeguard number transfers.

Note: this author recently transferred a number from one carrier to another and from one device to another and, frankly, the process was frictionless – which has to raise security worries.  But – again – it would be easy enough to erect some hurdles in the process and that might restore confidence in cellphone SMS.

The message there: stay on top of developments. Crooks are energetic in hunting for new weaknesses to exploit. Credit unions have to be as energetic in their self-defense tactics.

Want more ideas about what tools to use? Good advice is to look at leaders in the field and recent ratings from Javelin Strategy & Research heap particular praises on USAA, Wells Fargo, Bank of America, Bank of the West, and Fifth Third when it comes to preventing fraud involving member accounts. Only the very largest institutions were compared so don’t look for credit unions.  

Are your tools in the same class? They should be. That’s how to keep members.

Meantime, CU-2.0’s Kirk Drake pointed to emerging tools that credit unions need to know about.  Said Drake: “Using things like DAON, AnchorID, DUO, Averon, etc. really allow you to elevate the member experience while increasing security.” 

The point: credit unions have a growing number of authentication options. New ones are emerging. Learn about them, use them.  This just may become a key battleground in member retention in the years ahead. Falling behind is not an option.

 

Reinventing credit unions for the 21st century: A conversation with Kirk Drake – CUInsight http://bit.ly/2w6ibJl

 

By Robert McGarvey

 

“Oh, I couldn’t belong to a credit union.  I travel too much. I need to be able to do my banking wherever I go.”

I hear that a lot from business travelers when they learn that a primary work interest of mine is credit unions and that’s because I view the member owned institutions as honest and decent and usually community minded.

So how do I travel and also depend upon credit unions for the bulk of my banking when most are hyper community focusd with a handful of branchs?

Know too that the nearest branch of my primary credit union, Affinity Federal, is about 2400 miles away in north Jersey.  I moved to Phoenix from Jersey City five years ago and took Affinity with me.

Why? I had BillPay set up. I had the Affinity account set up to receive direct deposits from many clients.  It also works with my person to person payment network accounts. I could unravel all those strings but why?

At the Affinity website I input my zip and up pop dozens of ATMS where I have surcharge free access – mainly at 7-11s, by the way – and there are also a few nearby credit unions where I can enjoy what’s called “shared branching” and that means I can make deposits.

Mobile Remote Deposit Capture – snapping a photo of a check with a cellphone – lets me refill my accounts with a few clicks.  I don’t even need to walk to a nearby ATM to make a deposit. I do it at my desk.

CO-OP, the company that manages the shared branching network, says it has 5600 locations. That’s second only to Wells Fargo with 6100.  It’s ahead of Chase with 5300 and Bank of America with 4300.

That means my north Jersey credit union has a more convenient footprint than just about all banks.

CO-OP also has around 30,000 ATMs where there is surcharge free access.  About 7500 also take deposits.

CULiance runs another ATM network numbering some 300,000. This is the country’s largest surcharge free ATM network. (For the record, I do blogging for this company.)

Among banks, Chase operates the biggest ATM fleet with around 19,000 machines.  B of A has around 16,000.  

So, you see, a credit union actually provides more convenient access than any large bank.

Oh, even if you travel abroad, your credit union ATM card will work as well as a bank’s.  I’ve used mine in Italy, Germany, Spain,the United Kingdom and other countries I am blanking on.  No problems. Note: Joe Brancatelli pointed out to me that just about no cedit union offers surcharge free ATM access abroad. If that’s important to you, shop accordingly.

Not all credit unions belong to CO-OP or CuLiance.  Most do – thousands of them. But ask before setting up an account if far-flung ATM access matters to you.

Can you do everything at a credit union that you can at Chase?  Nope. Maybe at a handful of the very biggest credit unions but maybe not. Navy Federal is the largest credit union and has been for some years; its assets are around $81 billion. J.P. Morgan Chase’s assets are about $2.5 trillion.  That’s a lot bigger and I know just about any banking need, in just about any corner of the globe, can be handled inside Chase.

But the other reality is that for most except the 1%, credit unions have ample services and products.

Truth is, I also have a Chase account which I have because I write about banking and Chase is a good one to study.  It’s also convenient – there are two branches near me – when a deposit is above my MRDC limit at Affinity (and, yes, I could get it raised with a phone call but why bother).  And I used Chase to handle a six-figure wire transfer in association with a real estate purchase a few years ago because it was easier to do it in branch and I also happened to be in Las Vegas at the time  and a Chase was a short cab ride off Strip.  

Could I get by without the Chase account? Yep.

But my suggestion isn’t to burn all bridges with money center banks.  It’s to open a credit union account and see what it’s like to bank in an institution in which you are an owner.