Posted on Leave a comment

IVRs: An Important Asset for Your Credit Union

In today’s technology-driven world, many financial institutions are implementing the latest technology to keep up with the ever-evolving needs of their accountholders. While this is critically important, proven technology is also relevant and serves an important purpose in providing an outstanding experience for consumers.

As the shift to digital – and the increased consumer inquiries that accompany this shift – continues to expand, Interactive Voice Response (IVR) is a system that maintains an important role in the financial services industry. An automated phone system technology that allows callers to access information or complete tasks via a pre-recorded voice response system without having to actually speak with an agent, IVR typically provides a caller with a menu of prompts that they can then utilize to perform different types of actions. The caller can then interact with a software platform in order to self-service actions or tasks. Some IVR systems even incorporate advanced technologies such as natural language processing, AI and dual-tone technology to maximize their effectiveness.

In the financial services industry, IVRs can enable accountholders to pay bills, dispute transactions, report lost/stolen cards, place rewards orders, complete surveys, receive appointment reminders, make basic account changes, access account balance and transfer information and more. For credit unions, IVRs can also be utilized to facilitate outbound calls for follow-up, send collection notices via outbound calls, initiate fraud claims, provide helpdesk routing and facilitate no object certificate (NOC) assistance and routing.

Why are IVRs important?

With the rise in cloud infrastructure, the increasing adoption of advanced technology and the ever-increasing volume of calls, IVRs remain an important tool. Amid the COVID-19 pandemic, the global market for Interactive Voice Response (IVR) Systems was estimated at $4.2 billion in 2020 and is projected to reach a revised size of $6.7 billion by 2026. 

Benefits of IVRs

With an IVR, financial institutions are able to streamline call routing for contact centers or the main switchboard, ensuring that calls are secure, directed to the appropriate resource and can be categorized into different silos for triaging, while at the same time improving agent efficiencies.

By allowing your IVR system to handle certain types of calls, agents can focus on items that cannot be processed through an IVR. Some issues require the personal service of a live agent, such as agent webchat, account research and assistance with more detailed requests. In some cases, staff can be reduced if the IVR lift is great enough.

There are benefits for cardholders as well – especially the convenience factor. A 2021 study by Amex has shown that 70% of consumers would prefer the convenience of selecting from a list of existing personal payment methods instead of entering their payment information every time – an increase from 62% in 2019 and 61% in 2018. IVRs leveraging such options help increase the convenience and likelihood of prompt bill payment.

Additionally, many cardholders prefer to utilize an IVR over talking to a live agent for the time-saving factor alone. IVRs allow for 24/7/365 self-service and access to information. This non-stop availability leads to better caller satisfaction as they are able to find out needed answers or take care of tasks at the times most convenient to them. Cardholders also experience no hold time, no waiting and a lower likelihood for misunderstanding.

IVRs also provide a valuable service for callers who may have no other option but to conduct their business with your credit union via phone, such as members who:

  • Have no internet
  • Want to access information or take care of tasks without access to your credit union’s app
  • Need to report a card as lost/stolen
  • Want to submit payment via phone
  • Are unable to go to a branch location in person

An IVR system is an asset to a credit union as part of a multi-channel payment strategy – reducing transaction costs, as calls that can be easily handled by automation are less expensive than ones handled by human resources. IVRs more effectively utilize your credit union’s employees as well, ultimately improving member experience and satisfaction by creating more efficient paths for the consumer when dealing with financial transactions.

Not sure how to make sure your IVR system is as robust as it can be or decide you want to implement an IVR for your contact center? Partner with a fintech or credit union service organization (CUSO) to help. IVRs still play an important role in your payments strategy, giving you the ability to serve members via phone while providing the exceptional service experience that your members expect from your credit union.

Rachel Fogle is Strategic Product Manager, Product Management at PSCU. In this role, she oversees PSCU’s card services IVR. Rachel joined PSCU in 2009, overseeing the Credit Union Student Choice partnership and has also held the role of subject matter expert in Contact Center and Lending for Solutions Consulting. She has over 20 years of product and account management experience in the financial services industry.

Original Post

Posted on Leave a comment

3 Fraud Predictions for 2023

As we turn the page on 2022, losses from fraud remain a significant threat for credit unions, their members and businesses.

Consider that U.S. consumers lost a record $3.56 billion to online fraud in the first half of 2022 only. And credit card fraud is projected to increase at a 6.2% compounded annual growth rate through 2024.

In our recent conversations with industry experts, Co-op’s payment network partners, and credit union professionals, three fraud trends rose to the top. These trends inform Co-op’s top 3 fraud predictions for 2023:

1. All Digital, All the Time

According to Juniper Research, global e-commerce fraud loss is projected to reach over $41 billion by the end of 2022, more than doubling the $20 billion posted in 2021.

Why is fraud exploding within the digital channel? There has been a profound change in consumer purchasing habits that accelerated during the pandemic. With more people buying goods and services online, via mobile devices, using digital wallets and other contactless methods of payment, opportunistic fraudsters have migrated to the digital realm. Also, swift adoption of these mediums by retailers in many cases put the implementation before security and offered some security loopholes fraudsters took advantage of (such as credentials on file)

One result of this relentless shift in consumer spending habits has been the rise in card not present (CNP) fraud. Whereas card-present fraud is projected to remain flat over the next few years, due to the ubiquity of chip and PIN readers at the point of sale, CNP fraud is expected to account for 90% of the $1.57 billion overall growth in total U.S. card fraud losses from 2022 to 2024.

2. Phishing, Smishing and Vishing

Phishing has been around for decades and involves scammers using email to coerce victims into providing their personal or financial information for purposes of account takeover. More recently, criminals have begun using other popular channels of engagement. One such approach known as “smishing” entails the use of SMS text messaging. Unwitting victims are enticed to call an 800 number or click on a hyperlink, where they are directed to a scam site and asked to provide confidential information. ”Vishing” takes a similar tack using voice communication (most commonly Voice over Internet Protocol or VoIP). For example, 37% of scams reported by ITRC in the first half of 2022 were employed using Google Voice.

Phishers and smishers will often spoof popular brand names to encourage their victims to click through. The top organizations impersonated by phishers worldwide included Microsoft (13% of attacks), Google (11), Facebook (10%), Apple (10%) and PayPal (6%).

3. Account Takeover Continues to Grow

According to estimates from the Aite Group, identity theft losses will reach $635.4 billion by 2023.

Account takeover (ATO) fraud is a type of identity theft that involves a series of seemingly innocuous steps. The fraudster first gains access to a victim’s account through phishing or other means, and then makes changes to the accountholder’s personally identifiable information and contact info, resulting eventually in a complete takeover—often without the victim realizing what has occurred.

More than one in five U.S. adults have been a victim of an ATO attack. And the losses can be significant, averaging $12,000 per victim. A 2021 study by the European Payments Council tracking COVID-related fraud spikes showed ATO attacks with the highest surge (282%), followed by phishing websites (250%).

ATO fraud will continue to grow as digital use increases and consumers continue to employ sloppy password hygiene, such as using the same passwords across multiple sites and accounts. Moreover, ATO fraudsters are using ever-more sophisticated tactics, such as “deep fake” attacks, which employ synthetic IDs and combine both real and fake identifying data to form an entirely new, composite “person.” Fraudsters show remarkable patience, holding onto a synthetic ID profile for up to two years before activating the fraud. We expect synthetic IDs and fake accounts to continue to evolve and adapt to emerging authentication practices.

How Your Credit Union Can Help Limit Fraud Losses

Fraud will continue to be a challenge for credit unions and their members in 2023. To combat this rising tide, credit unions should employ a multi-pronged, preventative approach.

Member education is one of the best tools available to reduce fraud losses. Keep your members informed by providing alerts and updates on the latest scams through email, website banners, and in your member newsletters.

You should also share examples of common “red flags” that are seen in phishing emails and smishing texts. These include email addresses that don’t match the sender’s organization, the use of generic, versus personalized language (such as “Dear member”), the use of urgent and hyperbolic language to create urgency, grammatical mistakes, and embedded hyperlinks to suspicious websites.

It’s important to offer your members a variety of fraud-prevention tools, such as self-service card controls and alerts like CardNav and multi-factor authentication through one-time passcode (OTP) and other means.

Lastly, make sure your credit union employs the latest, most rigorous fraud detection solutions available, including Co-op’s Cooper Fraud Score — a dynamic, integrated, real-time machine learning score that helps your credit union react more quickly to fraud trends.

To get help with enhancing a multi-layered fraud defense strategy, reach out to Co-op’s Fraud Prevention Consultants.

Co-op’s quarterly Fraud Buzz webinars feature a panel of experts from across the credit union industry discussing the latest fraud trends, how they’re affecting members, and offer valuable tips for how you can prevent fraud and protect your credit union. Visit insights.co-opfs.org/upcoming-events for more information and to register for the next webinar. 

Original Post

Posted on Leave a comment

Trust in tech has eroded: Here are 3 ways to rebuild it

Any time I use my phone, new data is created. The same is true whenever I glance at my smartwatch, when I travel to work, when I use a smart speaker to turn on the lights. Thousands of my actions create these thousands of data points every day. It’s the same for anyone using digital tools – including my friends, my neighbours and my kids.

And while more and more data is created every day and new technologies embed themselves deeper into our lives, there’s often been a lack of transparency on what information is being collected, what it’s being used for and how I can access it.

Because of this, the trust people have in these technologies has eroded for years. That distrust has reached a critical level as headlines about data misuse, misinformation, spambots and more have proliferated.

If businesses don’t get a better handle on addressing this issue, people won’t want to adopt new technologies. And that would slow innovation and stifle the huge benefits we all stand to gain from the digital economy.

Building people’s trust in tech

We all can push to create a digital economy that’s safer, smarter and more inclusive. Here are three ways to do it:

1. Stronger data privacy and protections

There’s a family safety app that’s been used by tens of millions of parents all over the world to keep track of their kids. An investigation in 2021 found that the app was selling its location data to about a dozen data brokers. The app responded by cutting back on those sales, but the damage was already done. Trust was lost.

This is just one example in the multibillion-dollar industry of monetizing people’s data. Constantly having to share your personal data shouldn’t be the hidden price we all pay to participate in the digital world. Long, dense consent forms no one will read are part of the problem.

Businesses can step up by focusing on the basic principle that a person’s data belongs to them and should benefit them. Yes, it’s that simple. The European Union’s General Data Protection Regulation reinforces this point, stating that companies need to design their products to include strong privacy protections, more clearly state how people’s data is being handled and give people an opportunity to access and delete their data.

More companies around the world should adopt many of these principles. Your users will thank you.

2. A safer crypto ecosystem

You can’t talk about trust in tech without talking about trust in crypto. Before the FTX implosion, many people and financial institutions were already sceptical about the safety of cryptocurrencies. Now, the entire crypto industry is under even more scrutiny.

My company, like many others, believes that there’s great promise in blockchain technology to build more efficient financial instruments and payments systems. But none of it is possible without trust first.

Stronger regulations will go a long way to building that trust. Also, businesses need to partner more closely across crypto and traditional finance. Existing financial institutions and financial services companies are experts in risk management, anti-money laundering regulations and corporate governance protocols. Bringing more of that knowledge into crypto will provide much-needed standards and controls for the young industry.

3. Root out bias in AI

In 2016, ProPublica found that an algorithm used by US judges and parole officers was twice as likely to misclassify black defendants as being high risk for committing more crime than white defendants. The House of Lords in the UK and the UN Committee on the Elimination of Racial Discrimination have raised similar concerns about AI in policing.

There are many hidden biases that seep into AI systems and can inflict real harm on people’s freedoms and livelihoods. Several studies claim AI can worsen social inequities for people when applying for loans or jobs and even when going to the doctor.

Business leaders shouldn’t simply wait for new regulations before taking action – there’s a lot we can do today. We need to be unrelenting in our efforts to root out bias in AI. The only way to do that is with research and testing, and to double down on transparency and accountability. Many companies are taking these steps and even more can be done by working together.

When we’re all treated the same way by AI systems, that reinforces trust.

Trust is built by making a promise and delivering on it again and again.

The business world can rebuild trust in tech by focusing on exactly that. Making sure the data generated about people is used first and foremost for their benefit, with their privacy and security in mind. Creating data principles that are easy for people to understand and that more businesses will follow. Bringing standards to crypto. Weeding out bias in AI.

As both consumers of technology and as leaders, we owe it to ourselves and our customers to act.

Original Post

Posted on Leave a comment

Joan Opp of Stanford FCU elected new Board Chairperson of Co-op Solutions

Opp Joined Co-op Board in 2015, Previously Serving as Treasurer and Vice Chair

January 11, 2023 – Joan Opp, President/CEO of Stanford Federal Credit Union, has been elected Chairperson of the Board of Directors of Co-op Solutions, taking office on January 1 and succeeding Benson Porter, who retired last month.

“We are proud to have Joan Opp as our new Chairperson,” said Todd Clark, President/CEO of Co-op, a provider of payments and financial technology to credit unions. “Joan’s eight years of service on our Board coupled with her vast financial institution experience will be invaluable in leading the Board in its oversight duties of Co-op. Her work with Stanford FCU gives her a keen understanding of what today’s members need to manage their daily financial lives and what credit unions need from Co-op to help achieve that.”

Opp was first elected a Director on the Co-op Board in 2015, and then re-elected in 2018 and 2021. Previous offices on the Board include Treasurer in 2020 and 2021; in 2022, she served as Vice Chairperson of the Board and Chair of the Nominating Subcommittee. The Board elected Opp Chairperson at its regular meeting last month. Benson Porter had served as Chairperson from May 2021 until retiring as President/CEO of BECU as well as Chairperson of Co-op in December.

Opp has been President/CEO of Stanford FCU since May 2010. Prior experience includes eight years as EVP/CFO of Texas Trust Credit Union, and seven years as a Partner with Clifton Gunderson LLP, a CPA and consulting firm. Opp is also currently a Director of the Federal Home Loan Bank of San Francisco and their Audit Committee Chair, and is a member of the Western CUNA Management School Board of Trustees.

“It is a privilege to serve as Chairperson to the distinguished group of credit union leaders that make up Co-op’s Board,” said Opp. “It has been gratifying to participate in the evolution of Co-op as a fintech provider to our movement. Co-op is helping credit unions keep pace with the needs of members for advanced digital payments solutions, a result, in large part, of its consultative and collaborate work with its clients.”   

Founded in 1959, Palo Alto, California-based Stanford FCU is one of the top 100 largest credit unions in the United States, with more than $3.86 billion in assets. The credit union has nearly 100,000 members.

As Chairperson, Opp will preside over Co-op’s Annual Shareholders meeting, which will take place during THINK 23, May 2-4, at the JW Marriott/Starr Pass Resort in Tucson, Arizona.

For more information on THINK 23 and to register immediately visit https://co-opthink.org.


About Co-op Solutions

Co-op Solutions is the market-leading financial technology platform whose mission is to connect credit unions to the technology, strategic partnership and scale they need to best serve their members now and into the future. Co-op partners with credit unions to unlock their potential so they can compete; does the hard work of innovation, creating a one-stop opportunity to help credit unions grow; and offers knowledge and expertise in a world where everything must be integrated. For more information, visit coop.org.

Contact:
Bill Prichard, APR, Director, Public Relations
Co-op Solutions
(909) 532-9416
Bill.Prichard@coop.org

Posted on Leave a comment

A CUSO funded by 23 credit unions buys Affinity Federal Credit Union’s headquarters in Basking Ridge, NJ

Affinity Federal Credit Union will lease back the property for twenty years in a transaction coordinated by the CUSO CU Capital Management

January 9, 2023 – CU Capital Management, LLC, a Credit Union Service Organization (“CUSO”) that manages a network of credit unions and real estate holdings, announced a CUSO within its network, CCM Properties Two, LLC, purchased the property that headquarters Affinity Federal Credit Union (“Affinity”) in Basking Ridge, New Jersey. The transaction closed on Dec. 13, 2022.

The building boasts over 126,000 square feet of office space and has been owned and occupied by Affinity since 2008. The transaction agreement will lease the entirety of the property to Affinity for an initial term of 20 years with an option to extend. The $51.7 million purchase offers Affinity additional liquidity to be able to expand its branch locations with the raised capital and pursue its member-focused mission of improving financial wellbeing.

“Affinity’s mission remains centered on improving our members’ financial wellbeing, and the transaction facilitated by CU Capital Management positions us to immediately amplify this impact,” said Kevin Bauer, CEO of Affinity. “We have been approached by private investors interested in a sale/leaseback transaction with the credit union in the past, but this opportunity stood out, allowing us to partner with credit unions who share our long-term vision.”

This transaction succeeds others like it as office building ownership economics change. On February 18, 2022, the CUSO funded the purchase of a headquarters building owned by Wescom Central Credit Union in Pasadena, California in the amount of $59 million. Wescom, which had owned and occupied the property since 1985, was able to recognize a significant increase in net worth and is leasing back the full property for an initial period of 15 years with options to extend.

“In the rapidly changing economy we believe that many credit unions are in position to benefit from the immediate increase in net worth that a sale/leaseback can provide,” said Mitchell Amsler, CEO of CU Capital Management. “We expect to see growing credit union interest in all three components of our credit union sale/leaseback network now that the merits have been proven by large, respected, and well-capitalized credit union sellers, like Affinity, along with 23 credit union CUSO investors.”

CCM Properties Two, LLC is wholly owned by CUSO Realty Investors One, LLC, a CUSO that is co-owned by 23 credit unions. The transaction was financed with a combination of equity from the CUSO owners, and a loan originated by Michigan State University Federal Credit Union, with other credit unions buying loan participation interests. The CUSO owners and other lenders benefit by receiving attractive risk-adjusted returns over the full life of the lease.

“CU Capital Management and its network of credit unions and CUSOs have demonstrated the power of credit union collaboration,” said Guy Messick, CEO of NACUSO Business Services, a marketing partner of CU Capital Management. “We had an idea that, through collaboration, we could keep the players and benefits in these sale/leaseback transactions within the credit union community.”

Chris Pippett of Fox Rothschild LLP served as legal counsel to CU Capital Management, LLC and CUSO Realty Investors One, LLC on the transaction, with additional legal services for the CUSO network provided by Messick Lauer & Smith P.C. Eugene Huang of Wiley Malehorn Sirota & Raynes served as legal counsel to Affinity Federal Credit Union on the transaction.

About CU Capital Management, LLC

CU Capital Management, LLC, a Los Angeles-based CUSO co-owned by Maps Credit Union (Salem, OR), oversees a credit union sale/leaseback network that allows the full benefits of the sale/leaseback value chain to remain within the credit union movement by providing credit unions an opportunity to participate as sellers, investors and/or lenders. Sale/leasebacks provide selling credit unions with the opportunity to unlock capital through the sale of appreciated real estate assets while maintaining operational continuity through long-term leasebacks of the same real estate. Credit union investors and lenders receive attractive risk-adjusted returns, tied to long-term leases to Well-Capitalized credit unions and backed by high-quality real estate assets.

For more information, please visit: www.cucapitalmanagement.com.

About NACUSO Business Services

NACUSO Business Services (“NBS”) is a wholly owned subsidiary of the National Association of Credit Unions (“NACUSO”).  NBS was formed to help credit unions connect with CUSOs that provide unique and effective service solutions. 

About Affinity Federal Credit Union

Affinity Federal Credit Union is a full-service financial institution, member-owned, and community-focused, with a mission to nurture your financial wellbeing. With more than 20 branches across the tri-state area, Affinity is the largest credit union headquartered in the state of New Jersey, proudly ranking in the top 2% of all credit unions in terms of asset size. The Affinity difference is about people helping people on a deeper level and understanding what YOU need to make your unique dreams a reality. For more information, please visit www.affinityfcu.com.

CU Capital Management Media Contact
Amanda Reed
NACUSO, Marketing and Membership Director
864-380-3971
amanda@nacuso.org

Affinity Federal Credit Union Media Contact
Marissa Comerford
Gregory FCA for Affinity Federal Credit Union
affinity@gregoryfca.com