Calling All Credit Unions - How CUs are Helping After Irene

 by Ron Daly 

Hurricane Irene is still affecting a large swath of the East Coast, leaving thousands without power and with significant home damage and flooding. In hopes of helping members, credit unions on the East Coast and from around the country are reaching out to help. 

From USA Today:

When homeowners in the Houston area had to wait 45 days for insurance checks after Hurricane Katrina, Chartway Federal Credit Union advanced personal loans so customers could stay in hotels and pay monthly bills until they received the insurance money. "And we'll do the same now," says Ron Burniske, CEO of Chartway, which has 63 branches across the country...

Chartway is willing to let members affected by Hurricane Irene skip loan payments. It says its plans will evolve as it hears what members need. "Unlike most institutions, we will not go out and decide what they want and need," Burniske says. "We can turn a product around in 12 hours."

On the larger, national level, NCUF has activated CUAid. From their website:

The National Credit Union Foundation (NCUF) has activated the online disaster relief system CUAid.coop to raise money for credit union people along the East Coast affected by Hurricane Irene...

Credit union supporters in every state can now make donations through a secured website that accepts credit cards and wire transfers (www.cuaid.coop). CUAid is the only program of its kind that enables credit union employees, volunteers, and members, as well as credit unions and credit union organizations across the U.S., to contribute directly to support other credit union people.

A tip of the hat, both to Chartway and NCUF. Way to move fast and respond to a situation that has left a lot of your members and clients hurting. Here's hoping more folks get the help they need as we move toward recovery and clean-up. 

These are just two of many initiatives that CUs and their organizations are putting out there to help. Can you share another in our comments section? 

A Must-Read Blog Post on Security, Safety and Liability

by Ron Daly 

This blog post from the NAFCU Services blog should be a must-read for those of us in financial services - bank, credit union or otherwise. You might remember some months back when the story of Comerica and Experi-Metal hit the news. According to this post from the NAFCU Services Blog: 

Earlier this summer, a U.S. District Court ordered Comerica to reimburse Michigan-based Experi-Metal Inc. over a half-million dollars for funds the company lost after Comerica approved nearly two million dollars in fraudulent wire transfers from Experi-Metal’s account following a phishing attack against Experi-Metal.

As David Frankil from NAFCU Services points out:

This case addresses one of the most challenging security questions facing financial services today – who is ultimately responsible, the credit union or the member? That should be a trick question, since the answer is really both. However, this court case opens up significant liability for credit unions and emphasizes the need for both extensive in-house anti-phishing and fraud detection capabilities, as well as extensive educational efforts aimed at members.

The highlight was added by me.  It's imperative that members and customers get educated about what to expect from your emails and it's your duty as a sender to keep on top of phishing attacks and properly inform members when one occurs. 

Ron's Crystal Ball Says Knowing and Understanding the Member Will Make the Difference

by Ron Daly 

There have been plenty of 2011 predictions made in the first week of this shiny new year. We sifted through and found some of the more outstanding predictions made and thought we'd share them with you, our faithful soapboxers. 

From Transaction Directory: 

Mobile banking applications experienced a lot of media attention and some traction in 2010. 2011 will see more roll out of solutions by major banks; however it’s utilization will still be limited to the “early adopter” consumers. The real traction for mobile bank- ing will occur in the B2B world where notifications/alerts and approval requests kind of functionality will begin to resonate in the market. 

Also: 

The USPS will continue to struggle and lose billions of dollars. It is likely that postage costs will go up and services will be cut resulting in slower mail delivery times. In addition, bill recipients are becoming more demanding about where they want their bills delivered. On the B2C side, bill portals like Doxo, Manilla, and Zumbox will gain some traction with consumers. On the B2B side, Accounts Payable hubs like OB10 and Ariba will continue with their momentum of consolidating inbound invoices.

We saw a few of these coming - particularly, the bit about the postal service. Not to beat up on the post office, but so little of what people get via mail needs to be received that way. Online bill pay, email and text alerts, and email marketing can be done with less money and to greater effect. Mail still has a place and probably always will - but we've had our eye on the issues facing the postal service and the future seems dim. 

A heartbeat that we hear pretty clearly under all of the predictions we've read? A greater need to understand the member and meet them more than halfway. From the eMarketing and Commerce Blog: 

2. Goodbye to "pay and pray" advertising. The physical advertising world is about to be disrupted in a way not seen since the advent of the internet. Brands will begin to reject unaccountable "pay and pray" advertising in favor of precisely targeted, specifically timed trackable messages.

3. Nice to know you. Standing out is about delivering the right message to the right person at the right time. Marketers that create millions of micro-campaigns to make their message useful to consumers — i.e., hone their messages based on data — will reap results.

I couldn't agree more. Show a member that you know them, that you get what matters to them, that you want to do things solely for them. You might brush off the idea that members want "special treatment". Do so at your own risk. 

Let's talk about the article by Brett King on the Huffington Post, "The Finance Sector Gets a Start-Up Overhaul in 2011". There's a lot of gold in this article but the main thing to focus on is the diagram of technology versus behavior versus infrastructure change. 

The thing that makes 2011 so interesting, according to King, is the bevy of startups that want to shake up the way members interact with their credit union. What stands in the way of each of these new companies' success is the distance between the adoption of these new technologies by both the institution and the consumer. The invention of the "app" as we know it has really shifted our concept of ease of use and accessibility. The Internet changed things by proving you could buy, sell, transfer and transact sight unseen. The iPhone proved you could drive the interaction further into the personal sphere by bringing the ease of the Internet to the cellular phone. Does anyone who knows this expect there to be a "reverse exodus" back to face-to-face, in-branch transactions? 

The last bit of the article says it all, in my opinion: 

...The biggest risk to the finance sector today is the growing gap between the institution and the customer. The rate at which this gap is opening up is increasing rapidly, as the adoption of newer technology increases too. This is where we are going to see an explosion of start-ups and new businesses who aren't afraid to reinvent the bank customer experience. This is where the banks who do get customer and try to reinvent the journeys customers are taking will win.

It's also where banks who wait for ROI, or wait to understand the impact of social media, mobile, near-field contactless payments and other such technologies before investing, will lose out massively.

The moral? The idea of "bleeding edge" might make you queasy, but it can't make you feel any more sick than the idea of losing business because you won't bring better, smarter services to members. 

All the articles we mentioned are worth a read. We'd love to hear YOUR predictions for 2011. Which horse is worth a bet and which one won't leave the starting gate? Tell us about it in the comments. 

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You're more than just a Social Security Number...you might be 10 of them!

by Ron Daly 

I read an amazing piece of information in today's CUNA News Now that explained that more than 20 million Americans - that's roughly six percent of the population - have more than one social security number. 

From the News Now article: 

The study also found that rather than serving as a unique identifier, more than 40 million SSNs are associated with multiple people. ID Analytics examined more than 280 million SSNs to determine discrepancies.

I'm no Franklin Delano Roosevelt, but I don't think that's how it's supposed to work. 

According to the same article, most of these duplications or discrepancies are simple data entry errors. Still, scary to think that someone with my social security number would be doing various misdeeds and it might come back on me. Thank God for my credit monitoring service...maybe statistics like this are a way to sell more of the same features at your individual credit union?

The worst part of all this? There are 27,000 social security numbers in play at this very moment that are associated with ten or more people. Are you kidding me? 

Food for thought for you money-minded folks reading this: if we were paying interest on each of these numbers, imagine the backup withholding nightmare this could be. 

Got Snow?: What our company (and our clients) learned from The Blizzard of 2010

by Ron Daly

This story originally ran on the DigitalMailer Blog. 

Call me an optimist, but I'm going to call this storm "THE blizzard of 2010", in the hopes that it's not just "A blizzard of 2010". 

It's been an interesting week here at DigitalMailer. In case you missed any news outlet of the past week, the DC/Metro area got almost THREE FEET of snow dropped on us in the span of a week. Many of our account managers, operations staff and marketing department had to work from home for the entire week - and one of our staff members won't be dug out until days from now. Hang in there, Steve! 

If Capitol Hill Called Up the CU Industry...

[Industry Analyst Elliott Kashner from CreditUnions.com wondered what would happen if Congress decided to aim their judgement at credit unions. Elliott represents the proceedings with a script of the fictional conversation between lawmakers and CU industry head honchos: ]

I couldn't help but wonder how things might look if it were the CEOs of the ten top credit unions: Navy FCU, SECU, Pentagon, BECU, SchoolsFirst, The Golden 1, Suncoast Schools, Alliant, American Airlines, and Security Services. I'd like to imagine it would go something like this. (This did not actually happen, although the data was pulled from Callahan & Associates' First Look Program for Fourth Quarter)

Representative: Thank you all for appearing today in front of the Financial Services Committee. I'd like to start by taking a quick look back over 2008. As I am sure you all know, it was a brutal year. We’ve seen many financial giants fall. In response, Congress has passed several stimulus packages to get the economy back on its feet.
State Employees Credit Union: Well, 2008 was not such a terrible year for us. We actually saw our total assets grow by 11.28%.
Representative: I see you have been making use of TARP funds then.
American Airlines Credit Union: No, we are not currently receiving any federal funds. We were able to fuel our growth by attracting 19.41% in new shares and deposits.
Representative: Then how are you responding the to recession?

1st (and Only) National Bank of America

by Ron Daly

While everyone was concentrating on GAC and the speakers the last couple of weeks, something VERY troublesome was bubbling up in the banking sector. The groundwork for a brand new bank - the “1st National Bank of America” was being put in place. I know you’re thinking walking around in the cold here at the GAC junket has killed a few brain cells. Maybe I’m a pessimist? Or worry too much? But think about how the banking and credit union industries would be changed if this starts at the top of a very slippery slope and then rolls downhill through the system. 

Here’s your assignments... take a read of these articles and play “what-if?”

1) The Associated Press article “Gov’t looks to quell nationalization fears”

2) The Economist article “Banks under Stress” asks "Is it Time to Nationalise Citigroup and Bank of America?"

I think you can make big $$$ with TARP Cliff notes!

by Ron Daly

I’m serious, it is getting so hard to keep track of all the initiatives, who is asking for what, who is mad at whom, what the trades are saying and what all the big CUs are saying about TARP, SIP, CLF and all the other acronym programs. I heard one CEO tell a consultant a few weeks ago that they would gladly pay for a weekly executive summary of everything going on with this issue. Not a bad idea for someone else to run with! 

Of all the articles out there, I think that Steven Syre’s article in the Boston Globe “Paying a giant’s price” is worth reading for some perspectives at credit unions in the northeast. The starting teaser line...   

The Heartland Hack is Still a Problem...a HUGE Problem.

by Ron Daly 

When I was a hard working CFO at a large CU a few years back, the card operations department reported to me. 

I've been down the road of having to block and reissue a compromised merchant database a time or two. There's never a "best case scenario" of a compromised database. The best case scenario is it doesn't happen. But I've had small breaks (80 member accounts affected) and fairly big breaks (400 member accounts affected). There's the estimated ~$15 you spend reissuing cards and closing accounts. And then there's the ~$10 you spend on credit monitoring on the accounts. That's ~$25 per account, so at worst it's about $10,000 that I've had to account for after a breach. And that's why, recently, there's a thought that's been troubling me.

The "Duh of the Week" award for 1/9/08

by Ron Daly

It was brought up on one of our previous comment threads that investigative agencies assign crazy names to robbers/felons to get more press (Thank friend-of-the-blog Jeffry Pilcher for that little tidbit). 

Most of the names match characteristics of the robbers. Example: if the robber is wearing a cowboy hat, he's labeled the "Cowboy Bandit". If he/she is wearing a clown costume, he's obviously going to be the "Clown Bandit". 

Which is why we award the "Duh of the Week" to: 

THE ZOMBIE BANDIT (Read about it here in the CU Journal and here from Fox News). 

Why is this a "Duh of the Week"? Well, he didn't DRESS UP as a zombie. He just looked and acted a lot like a zombie - a byproduct of the crack cocaine addiction that drove his crime spree. 

Here's hoping that the time the robber spends in prison helps him get over his addictions and that his arrest gives the folks at Redwood CU (and elsewhere across the midwest and west coast) a bit of relief. 

Enjoy your "Duh" award, Zombie bandit. Here's hoping you develop a little more "braaaaaiiinnnsss".