Credit unions (CUs) are unique among financial institutions (FIs) for the sense of loyalty they inspire among their members. PYMNTS’ Credit Union Innovation Index found that 65 percent of such members chose their CUs because they trusted them, for example, with 60.8 percent saying they would not leave their CUs for different FIs.
CUs are working with providers in a range of industries to maintain this customer loyalty. Technology companies are supplying them with the products and services their members desire, working with both individual CUs and credit union service organizations (CUSOs) to develop case management platforms, modernize systems and provide advanced loan software.
CUs face a wide range of threats from bad actors, however, including fraudulent payments, spoofed logins and hacked member accounts. The same artificial intelligence (AI) technology that helps CUs with analytics can also help hackers field botnets to overwhelm CU defenses.
In the November Credit Union Tracker, PYMNTS explores the latest in the world of CUs, including new Congressional regulations, partnerships between CUSOs and technology providers, and the new generation of cybersecurity threats.
CUs are of particular interest to the U.S. Senate, which recently introduced the Veterans Members Business Loan Act to exempt CU loans for veteran-owned businesses from the current regulatory cap of 12.25 percent of assets. Sens. Mazie Hirono of Hawaii and Dan Sullivan of Alaska entered the bill into consideration earlier this month, and several CU organizations — including the Hawaii and Alaska Credit Union Leagues as well as the Credit Union National Association (CUNA) — have so far praised it.
Another CU issue currently awaiting federal regulation is legalized marijuana. A recent Financial Crimes Enforcement Network (FinCEN) study found that 162 CUs across the U.S. currently serve the cannabis industry, with the number of FIs lending in the space increasing by 61 percent year over year. Cannabis has been legalized or decriminalized in several states but is still a Schedule 1 drug under U.S. law, leaving many CUs at risk of federal investigation or prosecution.
CU innovation is no less prevalent abroad, with 30 CUs in Ireland partnering with Mastercard to open full-service checking accounts. The accounts are expected to be implemented at 115 branch locations by the end of the year, and are intended to provide an alternative option for individuals who did not want to open accounts at traditional banks. The CUs plan to add the checking accounts to several more locations next year.
For more on these and other CU news items, download this month’s Tracker.
A California Credit Union Keeps its Marketing Efforts Trusted and SAFE
Consumers are growing accustomed to on-demand goods and services thanks to the prevalence of Amazon Prime, Uber and other Silicon Valley giants. These developments are pressuring CUs — including California-based SAFE Credit Union — to deliver the same levels of service, and SAFE is deploying a new targeted marketing initiative to meet such demands.
In this month’s Feature Story, Grace Roberto, SAFE’s senior digital project manager, explains the ins and outs of the feature and how the CU balances the new capabilities with maintaining members’ privacy.
While cybersecurity is a hot topic in many industries, few have higher stakes than the financial sector. This is especially true for CUs, which not only have members’ money and data on the line, but also face the fact that hacks against other companies can indirectly affect the CUs that handle their transactions.
Making matters worse is that a sizable portion of CU members say they would abandon their FIs if they fell victim to data breaches.
This month’s Deep Dive explores the legion of cybersecurity threats CUs must thwart on a daily basis, as well as how they can better safeguard themselves and their members through education and legislation.
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