HSA Usage Continues to Evolve as Account Balances Grow

By Dennis Zuehlke, Compliance Manager, Ascensus.

Credit unions experienced double-digit growth in health savings account (HSA) deposits last year, with a 17.6 percent increase in assets from 2015 to 2016. Credit unions now hold $1.38 billion in HSA assets, based on data analyzed by Devenir.

Devenir provides customized investment solutions for HSAs and the consumer-directed health care market. Ascensus partners with Devenir to offer the Devenir myHSAinvestments solution and private-label HSA investment platform to banks and credit unions.

As the number of HSAs and the dollars held in them continue to increase, so does the average account balance. And, as high-deductible health plan enrollees become more familiar with the advantages of an HSA, their usage of the account begins to evolve.

Unlike flexible spending accounts, HSAs do not have a “use-it-or-lose-it” rule that requires the participant to use the money in the account to pay for qualified medical expenses incurred during the plan year or forfeit the unused portion. HSAs are instead designed to provide tax incentives to save for current and future qualified medical expenses.

Many HSA owners still use their HSA primarily as a transactional account to pay for qualified medical expenses. However, not all HSA owners withdraw from their accounts or deplete their HSA balances by year-end.

The Employee Benefits Research Institute (EBRI) analyzed HSA transaction activity in its database of 5.5 million accounts and found that only 63 percent of HSA owners withdrew from their account in 2016. The average amount distributed in 2016 was $1,771. Based on EBRI’s research showing an average total contribution amount of $2,922 in 2016, EBRI surmised that the average amount carried over at year-end was $1,151.

EBRI’s analysis also found that average year-end balances in HSAs increase for each year that the account has been open, as HSA owners withdraw less than they contribute. Accounts opened in 2004 had an average year-end balance of $14,873, compared to an average year-end balance of $1,027 for accounts opened in 2016.

As HSA balances grow, more HSA owners are starting to treat their HSA as an investment account to pay for future medical expenses. These HSA owners increasing look to invest a portion of their HSA assets in stocks, bonds, and mutual funds. More than 15 percent of all HSA assets are now held in investments—rather than traditional deposit products—and with an average total account balance of $14,971 (deposits and investments); an HSA investment holder’s average account balance is seven times larger than a non-investment holder’s average account balance, according to the 2016 Year-End Devenir HSA Market Survey.

This evolving trend presents both opportunities and challenges for credit unions offering HSAs to their members. Credit unions are benefitting from strong HSA deposit growth, but as account balances grow, credit unions need to recognize that offering a transaction account linked to an HSA savings vehicle may not meet the needs of members seeking to invest some or all of their HSA assets.

Learn more about this topic by listening to our recent podcast: “Not Offering HSAs? Your Credit Union is Missing a Chance to Grow

Ascensus Logo NewAscensus is the NAFCU Services Preferred Partner for IRA, Retirement Plan, and Health Savings Account (HSA) Solutions Software, Training, Documents and Consulting. To learn more about our partner, visit www.nafcu.org/Ascensus

3 Steps for CU Members’ Financial Success

Now is the perfect time to evaluate how your credit union can help your members focus on their financial success and how you can help them accomplish their financial goals. Whether your members have plans to buy a home, pay off debt or build their savings for long-term stability, a little planning can go a long way in ensuring your members are successful.

Here are the top three steps your credit union can coach your members to follow in order to get their finances ready for success.

Coaching Your Members for Financial Success

Step 1: Recommend members check their credit 

Members can go to annualcreditreport.com to download their credit report from each credit bureau for free once per year. If they haven’t checked their credit in the past twelve months, they should use this opportunity to review the reports. This will help your members understand where their credit is and if they have any negative items, such as missed payments, that could be decreasing their score.

Reviewing their credit will help members plan ahead for the year, particularly if they plan on applying for a new loan or credit card. This is also an opportunity for your credit union to help members take steps to improve their score based on the information in these reports.

Step 2: Recommend members review their debts

Members should be proactive and check the current balance and APR of their debts. If your members have credit card debt totaling more than $5,000, recommend that they consider a credit card balance transfer to consolidate the debt at a low-interest rate. If members owe more than $10,000, offer ways that your credit union can help like personal debt consolidation loans or talking to a loan officer at your credit union to discuss options for using equity if they are a homeowner.

Your credit union should also review existing loans and consider if it’s time to refinance for any members. If a member’s credit has improved since they took out the loans, they may qualify for lower interest rates. Lower rates can lower your members’ monthly payment and reduce the total cost of paying off their debt.

Step 3: Recommend members set up a budget

Finally, counsel your members to review their budgets. Ideally, members should only spend about 75% of their take-home income. That gives them plenty of free cash flow to cover unexpected expenses that could come up each month.

Make sure that members have a savings account with your credit union so that they can begin separating their savings from their cash flow. If possible, recommend that members save about 5-10% of their income each month. To hit his goal, members should work savings into their budget as an expense– like a bill that they pay themselves. This will help ensure that your members save money consistently throughout the year.

Learn more about how your credit union can combine professional online education with targeted financial coaching so you can reach more members in a more meaningful way. Watch “Elevate Your Personal Financial Coaching” on demand today.

KOFE Logo 117

KOFE (Knowledge of Financial Education) is the NAFCU Services Preferred Partner for Financial Literacy. More educational resources and contact information are available at www.nafcu.org/KOFE.


5 Reasons Why Credit Unions Should Go Big When It Comes to Cloud Services

By Gregg Early, Strategic Content Director, Geezeo.

Moving to the cloud benefits credit unions. But it’s important to understand the array of options in the cloud space today and why going big is a smarter choice than going small when it comes to cloud services.

Look Before You Leap to the Cloud

  1. Overleveraged. First, smaller cloud providers may be new to the game or are straining to remain price competitive with bigger players in the space. That means they may be running at the limits of their current system, not wanting to spend more on costly upgrades.
  2. Underperformance. It’s not just static data the gets moved to the cloud. It’s also dynamic data that has to move back and forth with as little latency as possible. If your cloud provider isn’t running a world-class system, neither are you.
  3. Data without Action. Another key to having a great cloud partner is being able to have the tools to slice and dice the data you receive from your customers and turn it into actionable strategies. Just having your data available without any context for the marketing power available to your sales team is like paying for an entire hotel and sleep in only one room. The cloud offers more opportunity to enrich data.
  4. Mobility. If your CU is committed to the mobile banking space, then finding a reliable cloud services firm is crucial. And not having a mobile strategy is a risky way to move forward in today’s marketplace.
  5. Set and Forget. Because each cloud service and its partners have different protocols, you don’t want to keep jumping from one provider to another. All that time lost is time your competitors have to catch you.

Take Full Advantage of the Cloud

Geezeo saw the potential of linking with AWS a decade ago and that relationship has allowed us to give our clients all the performance, value and opportunities that they need and deserve. Our SaaS serves as a bridge between CUs and AWS to enhance the value of the digital banking experience for the customers as well as the institutions.

The bottom line is the bottom line: By working with AWS, Geezeo allows our more than 500 clients to monetize and deepen their individual relationships with their customers much more effectively than we have in the past because the cloud offers an array of tools built to meet the specialized needs of FIs in one spot.

As this next wave of the digital age expands, so will our ability to add even more powerful tools for our clients.

Geezeo is the NAFCU Services Preferred Partner for Personal Financial Management (PFM). More educational resources and contact information are available at www.nafcu.org/Geezeo.

Give Members a Home Experience Not a Mortgage

Anne Legg, Director of Client/Market Strategies, AdvantEdge Analytics

As technology continues to transform the lives and expectations of members, they increasingly turn to businesses that can provide them an end-to-end solution combined with a customized experience, before they may even know they need it. To achieve this, the credit union needs to provide a Platform, Personalization, and Prediction.


A platform is a group of technologies that are used as a base upon which other applications, processes or technologies are developed. Think of an iPhone. It is a platform for many processes, such as email, phone, movies, games etc. To carry the concept of a platform to a credit union, the products are the deposits, loans and services and the member is the base. So, the member experience is the platform.

A member requires shelter with adequate proximity to work, family, “play” and space for family and their belongings. The member fills this need with a home. Not a home loan. A loan does not exist in the target neighborhood. Their loved ones do not live in a loan. The loan does not contain their prized collections.

Traditionally, credit union members have compartmentalized their home experience. They go to one source to find a neighborhood, another to find the home, yet another to find the loan and then even another to furnish/improve the home. And it can be a lot of work and include a lot of uncertainty. In the platform, the credit union brings all these sources together in an app ecosystem (see graph below )and creates the “home experience.” The credit union can guide the member through the entire home experience, providing an exceptional experience that would be real value for them.

The platform as a business model is powerful because it uses technology to connect people, organizations, and resources in an interactive ecosystem where amazing amounts of value can be created and exchanged.  This experience involves the features and benefits of the home itself, ownership properties, maintenance, as well as the community of homeowners who share their experiences on solving home problems.  And, of course, there is the financing of the home.


Notice the first step in the home process (pictured): find a home.  Traditionally, credit unions have not been deeply involved in this process.  Obviously, there is business value in getting out ahead of the competition.  Courtesy of our connected world, members reward those businesses that do…those that can give them what they need before they need it.

With big data, specifically leveraging predictive analytics, credit unions are in a position to identify when moving might be an important consideration for a member.

  • Life trigger events: Has your member recently had a baby? Switched jobs? Retired?  All of these life events frequently associated with moving can be uncovered.
  • Purchase behavior: Is your member regularly shopping and playing far from their current home?  This might be an indication that their current location is no longer ideal for them.
  • Relative financial situation: Is your member’s income or net worth significantly higher than those in their neighborhood?  This might be an indication the member would be open to a move.


This same big data can also be used to personalize the experience.  Having a baby? Let’s include recommendations for baby-proofing your new home.  Moving closer to your new job?  Let’s connect to title companies conveniently located in that area. Retiring? Maybe the right loan for you is less than you qualify for, given your current income bracket.

But there’s more.  As users interact with your new technology, they reveal more and more of themselves.

  • Are they looking at small houses even though they could afford more? Perhaps a “jewel box” house is for them.  Let’s connect them with others who have downsized in style.
  • Do they shy away from older homes that meet all their needs? Let’s connect them to contractors, those well-regarded by others in the ecosystem community.
  • Are they looking for builder contractors? Perhaps it’s time to engage them with a home equity loan discussion.

For endless scenarios, these member insights gained from connected data will allow credit unions to shift from being a provider of commoditized products to that of a member engagement ecosystem host.  More importantly, you are providing value to their lives while they are returning value to the credit union.

What’s Next

The examples above are just for the home experience.  It could just have easily have been based on one of the other five member needs: the auto experience, the vacation experience, the learning experience, the savings/senior living experience.

But credit unions should start small and create a member experience for just one, learn, and refine.  Credit unions will be amazed at how this shift from product to platform allows them to collaborate in ways they just can’t imagine now.

Learn more from Anne during her recent podcast “Quantifiable Self and Zero User Interface.” Anne addresses why these concepts are becoming increasingly important to credit unions. Members rely on technology to help them make healthier, smarter, and more successful decisions. With your credit union’s vast access to data, you are in a unique position to deliver this experience to members.


Credit Union Fraud: Social Engineering Prevention

By: Ann Davidson, Vice President of Risk Consulting Allied Solutions.

Social engineering is defined as “the use of deception to manipulate individuals into divulging confidential or personal information that may be used for fraudulent purposes.” The use of telephone, email, postal mail and the internet are all vehicles that fraudsters use to steal your members’ personal information. However, online scams and phishing attempts are the most common ways in which fraudsters attempt to perform social engineering on your consumers so they can steal their information.

These member scams are likely to grow in amount and severity throughout 2018, primarily due to these key factors:

  1. More exposed records: 145.5 million U.S. records were exposed last year from the Equifax data breach alone. With that and other breaches taking place in 2017 (like Deloitte and Sonic Foods), you are looking at a consumer base that is at high risk of identity theft and fraud exposure this year.
  2. More sophisticated processes: The tools and processes used by criminals to perform these attacks will likely evolve and become more sophisticated in an effort to fall below the radar and have more success in their attempts. In fact, more and more fraudsters are treating these crimes like a business with hired employees and standardized processes.

Case in point: Recent reports have surfaced where scammers are contacting consumers as the Social Security Administration to trick them into giving up their personal information, which would then be used to perform identity fraud or synthetic identity fraud.

Take proactive measures to protect your business and your accounts from these social engineering fraud attempts. For an overview of the scams and frauds that hit your members the hardest watch our webinar on-demand today.

Social Engineering Fraud Prevention for Your Credit Union:

  • Monitor employees’ accounts to watch for any suspicious activity, especially those employees that have access to sensitive information.
  • Educate employees about ongoing threats.
  • Verify deposited checks clear before permitting a withdrawal or transfer.
  • Establish a multi-level authentication process for financial transactions or account change requests not performed in person.
  • Tell employees to never open or forward emails, links or attachments received from unknown sources.
  • Ask your employees to be wary of any prizes or offers made over the phone or through email, especially those that offer to update, correct or solve a computer issue or problem.
  • Encrypt private information prior to shredding or destroying documents or storage devices.
  • Conduct tests to determine where system vulnerabilities exist and promptly address them.
  • Monitor social media outlets to reduce the chance of sensitive information being posted.

Social Engineering Fraud Prevention for Your Members:

  • Be cautious of any company you choose to engage in business with.
  • Be cautious when asked to wire money.
  • Review your account statements frequently.
  • Consider giving only to established charities in the event of a disaster.
  • Always conduct your own research if someone contacts you with low-risk, high-return investment opportunities.
  • Be cautious when buying products online.
  • Use strong password protection.
  • Don’t respond to emails or messages to provide personal or financial information.
  • Report scam attempts:

If you take action NOW to proactively mitigate these fraud risks, you can protect your credit union and members from these attacks. Sign up for Allied’s Risk Alert newsletter to stay up-to-date about what’s happening in the fraud landscape.

Watch our most recent webinar “Sweetheart Scams, Phishing Attacks, and Member Fraud” to learn more about scams that hit your members the hardest. 

New Allied logoAllied Solutions is the NAFCU Services Preferred Partner for Insurance- Bond, Creditor Placed (CPI), Guaranteed Asset Protection (GAP), and Mechanical Breakdown Protection (MBP). More educational resources and partner contact information are available at www.nafcu.org/allied.