The Most Popular Posts of 2016

2016 was an eventful year, and the experts have provided educational material you can’t miss. From card fraud to millennials, credit scores to new IRS regulations, we’ve rounded up the top 5 webinars and blogs that cover the most important topics of the year. Keep yourself in-the-know and be prepared for a strong, successful 2017.

Webinars

Card Fraud on the Rise: How Financial Institutions Can Help Prevent It
Ann Davidson, VP of Risk Consulting at Allied Solutions; Tammy Behnke, Program Executive at ProSight Specialty Insurance

Possibly the most relevant concern for financial institutions right now is costly card fraud risks. Learn the fraud prevention best practices that could save your credit union from hundreds of thousands of dollars in payment card losses.

Understanding Credit Scoring and Credit Reports
MaryKay Scully, Director of Customer Education at Genworth Mortgage Insurance

Everything you need to know about credit scoring and reports, inside and out. This webinar covers report preparation, the information contained and where it comes from, what types of reports are available, how to use the codes in each section of the report, how the scoring model works, and more.

NAFCU/BFB Gallagher 2016 Executive Compensation Survey Report
Christine Burns-Fazzi, Co-Founder of BFB Gallagher; Jack E. Clark, PhD, Clark Research Associates

Now in its 10th year, the annual NAFCU/BFB Gallagher Executive Compensation and Benefits Survey is the trusted source for comprehensive data on credit unions of all asset sizes, coast-to-coast. Get data on important topics like total executive compensation by asset size, types of nonqualified plans, demographic profiles, and more.

Top Risk Concerns: A Look Back and a Look Ahead
Ann Davidson, VP of Risk Consulting at Allied Solutions; John Buzzard, Product Manager of Network Products at FIS Global

Don’t wait until disaster strikes. Arm your credit union with the knowledge of the most prevalent risk exposures from years past, and prepare for 2017 with the best methods to mitigate these risks.

Data Breaches Continue to Rise: How Financial Institutions Can Prepare & Respond
Ann Davidson, VP of Risk Consulting at Allied Solutions; Sally King, Managing Partner and Co-Founder of NXG Strategies

Build a proactive data breach response plan that will help reduce the financial and reputational impact of an attack inside your organization or in your community. Get educated on secure policies and third-party programs, effective account holder response plans, methods for offsetting the costs of responding to an attack, and compliance with FTC regulations.

Blogs

Four Emerging Risks Challenging Credit Unions Today
Roger Nettie, Senior Risk Management Consultant at CUNA Mutual Group

Four major emerging risks at-a-glance: wire transfers and ACH, overdraft fees, collection letters, and ATMs and the Americans with Disabilities Act (ADA) compliance.

How to Speak the Millennial Language
Larry Pruss, Senior Vice President of Strategic Resource Management

Making up nearly 25% of the US population, it’s no wonder millennials were one of the hottest topics of discussion in the financial services industry this year. If you know how to connect with them, millennials represent a huge opportunity for your membership, educational content, and sales teams. Read the top five tips on how to leverage a millennial engagement strategy today.

Card Data Breach Loss Prevention Checklist
Ann Davidson, VP of Risk Consulting at Allied Solutions

Eleven key steps to ensure your credit union is doing everything possible to prevent card data breaches. From evaluating the compromised card number and determining the level of risk, to reporting the fraud to the Visa Fraud Reporting System and/or MasterCard’s Safe System (a requirement under card association rules), you can’t afford not to implement these best practices.

The 7 Most Expensive Vendor Management Mistakes
Patrick Goodwin, President of Strategic Resource Management, Inc. (SRM)

Even the wisest professionals at financial institutions overlook savings opportunities when dealing with third-party vendors. From the insidious, to the emotional, to the downright dangerous, here are the most expensive mistakes credit unions make with their vendors—and how to prevent them.

Card Fraud Lessons Exposed
Ann Davidson, VP of Risk Consulting at Allied Solutions

When Allied Solutions presented a webinar on card fraud, they conducted a poll and found that 81% of attendees had personally experienced an uptick in card fraud during the preceding 12 months. Allied reached out to individual financial institutions to perform an assessment of their risk programs and help uncover potential causes of the card fraud they were experiencing. Read on to find out what they found.

 

Back-of-Card Branding Webinar Q&A

MC_backofcard_brandingAnd the questions kept on coming! One of our last webinars of 2015, “Preserving Credit Union Income:  The Impact of Back-of-Card Branding to Your Bottom Line,” sparked so many questions that Caroline Heller, industry expert and webinar speaker, decided to follow up to those we didn’t have time to address during the webinar.

To Catch You Up…

On average, approximately 20% of a credit union’s non-interest income is derived from payments.  In recent months, many institutions have seen some erosion of their payments-based income, but have not been able to specifically identify the source of the erosion.

This webinar helps your institution focus on one area of potential revenue erosion – back of card branding.  In addition to the brand mark found on the front of your debit card, there are usually one or more brand marks present on the reverse side of the card.  It is important to understand the implications of the back-of-card brand marks to your transaction routing and subsequent revenue stream.

Watch the full webinar here:

Click here to watch the presentation in a new window

Webinar Q&A

Caroline Heller, Vice President of Core Payments Solution Sales with MasterCard, responds to your questions:

1. What are a few of the key questions we ought to be asking our current back-of-card brand to ensure our revenue is not eroding?

  1. You may request these reports from your PIN Networks and/or your processor.  First, request reporting that separates PIN transactions from PINless. Ensure you have transaction count, amount, and interchange earned. These may come from various reports vs. one report. Second, request historical reports to look for trends of the above.  Look at a year ago (or two.) Is PINless increasing?
  2. Ask if your PIN Network supports dual message (aka “signature”) transactions or if they have plans to support in the future.
  3. Request current and historical Top Merchant Reports to look for trends.  Is their significant growth (above your overall growth)? This could be a shift from your other PIN network or from signature debit transactions now routing as PIN.  Compare the Top Merchants across all of your networks.

2. How do we know the optimal number of PIN POS Networks on the back of the card?

You may want to consider pairing down the number of PIN POS Networks on the back-of-card.  For instance, if you have 3, I would consider reviewing the economics and need for each network.  If it makes sense, I would limit to 2 networks.

3. Right now we have a rewards program that only gives points for signature debit transactions. Is that still okay, or what do you recommend?

I recommend doing a thorough profitability analysis on your portfolio including the cost of rewards and the estimated increase in usage before changing anything.  However, there are a few things to consider:

  1. When cardholders are encouraged to use their card for all purchases, regardless of signature/PIN, both transaction types tend to increase.
  2. The signature vs. PIN methodology will become more complex with EMV. For instance, a cardholder could enter their PIN, and the transaction is still routed dual message to MasterCard or Visa (what would have been a “signature” transaction prior to EMV).
  3. PINless transactions as they work today definitely are confusing to cardholders when they are motivated to sign for the purchase. The cardholder is not given a choice at the point-of-sale for these transactions when the PIN network is participating in PINless transactions.

4. Can you explain the term ‘exempt issuer’?

ExemptIssuer2I am referring to Section 1075 of the Dodd-Frank Act (aka “Durbin Amendment”).  One portion of the Durbin Amendment caps debit interchange with specific exemptions.  One exemption is for small issuers defined as an issuer with assets less than $10B.  These issuers are often referred to as “Exempt Issuers” when talking about debit interchange and profitability.

This ABA article details the competitive advantage of “exempt issuers” over “regulated issuers” relative to Durbin.

5. Are there any negatives to the issuers that opt out of PINless? Loss of small transaction volume, customer satisfaction, anything else?  

Generally speaking, we don’t believe there would be any negative repercussions were you to opt out of PINless, neither relative to volume or revenue, nor to customer satisfaction.

6. In the event that we were to manage opting out of PINless with our PIN networks, would those transactions which might route as PINless fallback on signature rails?

Yes.  These transactions would likely fall back on signature rails with no signature required.

7. I am an FI. To whom do I opt out of PINless with? MasterCard or my network?

You would opt out with PINless on your PIN Networks.

8. How is EMV going to affect routing? 

The Card Verification Method (CVM) on an EMV card authenticates the Cardholder, but does not dictate routing.  A cardholder could enter their EMV Card PIN, and the merchant can route the transaction to any of the applicable networks on the card including MasterCard or Visa.

A-Z_MC_Logo

MasterCard is the NAFCU Services Preferred Partner for Credit, Debit, and Prepaid Branded Products. For more information, please visit www.nafcu.org/mastercard

©2015 MasterCard Worldwide Proprietary and Confidential

The information provided herein is strictly confidential.  It is intended to be used internally within your organization and cannot be distributed nor shared with any other third-party, without MasterCard’s written prior approval.

Information in this response relating to the projected impact on your financial performance, as well as the results that you may expect are estimates only.  No assurances are given that any of these projections, estimates or expectations will be achieved, or that the analysis provided is error-free.  No reliance can be made on this response and MasterCard will not be responsible for any action you take as a result of this response, or any inaccuracies, inconsistencies, formatting errors, or omissions in this response.   This response constitutes willingness, in good faith, by MasterCard to explore the possibility of a business arrangement between the parties and does not contain all matters upon which agreement must be reached in order for the proposed transaction to be established.

What Biometrics Can Do for Your Credit Union’s Security Strategy

Woman with fingerprint scanningIf you feel like there is always another security measure you need to consider, you’re right and this reality is actually a very good thing. The security landscape is indeed continuously changing and evolving.

You must constantly evaluate and revaluate your security processes because one single solution to satisfy all of your security concerns and needs does not exist.  Consequently, it’s wise to employ a multi-factor security (MFA) strategy.

Chris Amador, Product Owner with Q2, talked about the balancing act that your credit union faces when implementing biometrics solutions, in our recent webinar, “Biometrics: Enhancing Member Experience & Security.” He spoke about the challenges your credit union faces with providing secured online and mobile channels that guarantee compliance with regulations and deliver a satisfying experience for your members.

Watch Biometrics: Enhancing Member Experience & Security


We’re sharing some key highlights from the webinar and encourage you to watch the complete presentation where Chris shares timely insights on:

  • The different types of biometric solutions currently used within the financial services industry
  • What true multi-factor authentication (MFA) means and why the “third factor” is difficult to solve
  • The preferred biometric solution for online use among consumers
  • Barriers you need to consider when implementing biometrics features
  • How to evaluate whether or not your membership is ready to accept this technology

What is a True Multi-Factor Security Strategy?

A true multi-factor authentication (MFA) security strategy should include three key factors:

  • Something I “have” (e.g., your member’s laptop or mobile device like a tablet or a smartphone)
  • Something I “know” (e.g., your member’s user ID and password, pin, account number, or knowledge based questions)
  • Something I “am” (e.g., your member’s biometric data, a physical or behavioral attribute unique to your individual member)

You and your members are familiar with the “something I have” and “something I know” categories,  but those two factors alone have limitations in today’s complex security environment.

The physical devices your members use, whether it’s a laptop, a tablet, or a smartphone were considered as an integral layer of security, but this is no longer thought to be true because these devices can be stolen. And, due to the rise of social media, your members may post all sorts of information that can be used by fraudsters to determine the correct answers to security questions. As an example, online quizzes on social media (e.g., Buzz Feed) can be used as tools for fraudsters to phish for information.

The “something I have” category is only available through the implementation of biometrics. Biometrics are an effective third-factor in a MFA security offering for your members because they utilize something fraudsters can’t duplicate, the unique personal and physical identifiers of your members.

It’s important to consider and assess to what degree your members will be comfortable and willing to adopt biometric security measures. Continue advancing your knowledge about these options and the biometrics landscape, by watching “Biometrics: Enhancing Member Experience & Security.

Q2 Online and Mobile Banking

Q2 is the NAFCU Services Preferred Partner for a single platform virtual banking solution, including online and mobile. Learn more about Q2 by visiting www.nafcu.org/Q2.

Best of NAFCU’s 48th Annual Conference and Solutions Expo (Video and Educational Highlights)

Credit union leaders from around the country gathered to network and discuss the most pressing issues impacting the industry during NAFCU’s 48th Annual Conference and Solutions Expo in Montreal, Canada. The conference was NAFCU’s largest event in nearly a decade.

Here’s a quick video of some highlights from this year’s conference:


During the conference, attendees heard from NAFCU management and leading industry professionals that included keynote conference speakers such as TrendHunter.com Founder and CEO Jeremy Gutsche, and MasterCard’s General Counsel and Chief Franchise Officer Tim Murphy.

Solutions Expo at the NAFCU 48th Annual ConferenceThis year’s conference included the annual Solutions Expo, spotlighting the latest technologies, applications, and resources available to help improve credit union operations.

Our Preferred Partners exhibited during the conference and shared their thought leadership, innovations, and solutions during educational sessions throughout the conference.

The complete list of sessions and available presentation slides are available on www.nafcu-annual.org. Here’s a quick listing of key topics presented during the conference to help your credit union grow, retain members, manage risks, protect members, and improve overall operations:

Topic Category Presentation Title Preferred Partner
Growth & Retention Building A Strong Payments Strategy Vantiv
Health Savings Accounts, IRAs and Millennials: A New Generation Presents New Opportunities  Ascensus
Using Credit Scores to Grow and Engage Membership VantageScore
Why Your Credit Union Should Offer Wealth Management Services to All Members Money Concepts
Risk & Security A Deep Dive Into EMV Implementation MasterCard
Cybersecurity Risk Mitigation: Protect Your Member Data Knowledge Consulting Group (KCG)
Top Ten Fraud Risks That Impact Your Financial Institution Allied Solutions
Uncovering the Faces of Fraud Q2
Using Moneyball Tactics and Risk Rating Assessment Models Wolters Kluwer Financial Services
Financial & Insurance Trends in the Retirement Plan Industry Pentegra Retirement Services

Thanks again to the 2015 Annual Conference signature sponsor MasterCard, our 5-star preferred partner sponsors Allied Solutions and Vantiv, and all of our partner sponsors, exhibitors, and speakers.

We’re looking forward to seeing you all at NAFCU’s 49th Annual Conference and Solutions Expo in Nashville (Music City) next year! Get more information, sign-up for updates on the latest conference details, and register by visiting www.nafcu-annual.org.

Top Innovative Solutions Recognized at NAFCU 48th Annual Conference and Solutions Expo

The winners of our annual Innovation Awards competition, recognizing outstanding innovations that help credit unions thrive, have been revealed! This year’s Innovation Award winners are preferred partners Insuritas, MasterCard, and Q2.

2015 Innovation Award Winners: Insuritas, MasterCard, Q2

“Our partners set a high standard for innovation geared toward driving credit union success,” said Randy Salser, president of NAFCU Services. “This year’s winners provide innovative solutions that help credit unions stay competitive, while delivering exceptional member service.”

Insuritas for EasySTREET
EasySTREET is the first technology solution of its kind. It extracts data from a credit union’s core, its loan origination system, any credit union CRM or CIF platforms, and supplemental data from TransUnion or Lexis Nexis. It compiles a master auto or home insurance policy application on behalf of the member without ever bothering the member with questions. The technology then automatically solicits bids for auto and home insurance coverages from multiple insurance carriers in under 2 minutes. These prices are then compiled in a personalized email that is sent to the member. The member sees up to four bids from A-rated carriers, ranked by cost. For the first time, the credit union can actually do the insurance shopping for the member without ever bothering the member. For more information about Insuritas’ products and services, visit www.nafcu.org/Insuritas.

MasterCard for Identify Theft Resolution
The Identity Theft Resolution Benefit solution provides credit union members with the ability to monitor the “dark web” and receive tailored alerts about their personal information. Additionally, MasterCard offers free identity remediation services to members who are victims of identity theft. This service will provide more peace of mind to members and will help credit unions reduce cardholder attrition due to security concerns. MasterCard is the only payment network that provides a service like this to all U.S. cardholders. For more information about MasterCard’s products and services, visit www.nafcu.org/MasterCard.

 Q2 Holdings for the Q2platform
The Q2platform gives credit unions the ability to serve their members’ online and mobile banking needs via a single, secure virtual banking solution. While the Q2platform in and of itself is an innovation, perhaps the single most innovative attribute of the platform is its integrated, patent pending security component, RFA (Risk Fraud Analytics). By having a holistic view of end users’ activity, the behavioral profiling algorithms that undergird Q2’s RFA solution are able to build a comprehensive picture of a member’s virtual banking habits. This vital feature makes it far easier to detect anomalous behaviors that typically precede fraud and to stop suspect transactions in real-time—before any funds have been compromised. For more information about Q2’s products and services, visit www.nafcu.org/Q2.

Representatives from Insuritas, MasterCard, and Q2 accepted their awards on Tuesday, June 23rd at a private VIP reception at the Musée Grévin in Montréal.  Join us in congratulating this year’s innovation award winners!

For a complete schedule of conference events, visit www.nafcu-annual.org. For up-to-the-minute information on the conference, follow the #NAFCUAnnual hashtag on Twitter.