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Account and loan origination in one system is a gamechanger for credit unions

By Brit Barker

The future of lending looks bright, especially for community based financial institutions.

Credit union loan growth rose to 7.5% in 2021, up from 5.3% in 2020, which was slightly above the 7.2% long-run average, according to CUNA Mutual. CUNA Mutual pointed to strong performance in credit unions’ two biggest loan categories: used auto loans and fixed-rate first mortgages, as key drivers in this growth.

Community lenders were quick to respond to increased demand for digital services during the pandemic, and the growth numbers reflect that. However, credit unions can’t afford to rest on their laurels because fintech companies are coming in hot on their heels. Fintechs have invested heavily in data science tools over the past two years, and the increasing availability of 5G networks will increase bandwidths and download speeds.

Consumers Want More

Consumers already expect almost instant service when it comes to digital channels. It must be fast, easy, and on their terms. In other words, digital. Earlier this year, Digital.com asked 1,250 online shoppers how long they wait for web pages to load. Half of all respondents said they abandon their shopping efforts when pages don’t load fast enough, with 20% leaving after just 2 seconds and 8% giving up after just one second. In fact, slow technology was the top complaint among digital consumers, rating higher than security concerns.

Consumers’ need for speed should be of particular concern because despite overall loan growth, lenders lost ground in important key lending measures. The MBA reported steep year-over-year drops in net profits, due in part to production expenses rising to a whopping $9,140 per loan. Meanwhile, productivity eroded to 3.6 loans per employee and the average pull through closing rate fell to 75 percent.

To me, the reason is clear: for years, fintechs have pitched systems built with open APIs, claiming they could share and process data as quickly and efficiently as all-in-one systems. However, those new systems couldn’t scale business as promised when the mortgage market boomed.

For credit unions looking to maximize lending efficiency while providing a great member experience, a single origination platform for both loans and accounts is the golden ticket. A single system allows credit unions to ramp up their cross-selling efforts, deliver a seamless account opening process, and eliminate the service gaps that lower net promoter scores.

The pandemic also spurred an increase in the number of digital channels available to consumers and the ability to shift between them without friction. One of the most intrinsic features of a single system that originates both loans and new accounts, is the ability to open a membership account within the loan application process, greatly reducing time spent and improving the experience for an applicant. Reality is most borrowers come for a loan and then, if they are a new member, need to join the credit union. As part of the loan application process, these systems can qualify eligibility, determine membership, offer eligible accounts and fund the new account. The loan is submitted and new account is funded all in one session for the applicant.

Modern APIs have paved the way for impressive improvements in digital service and efficiencies. However, according to MBA data and the experiences of our new lending partners, it doesn’t measure up to expectations. All-in-one systems still provide the fastest and most efficient experience for consumers and employees, too.

Meeting Employee Expectations

Nobody runs a perfect shop with tech systems that work flawlessly every time. The reality is, at least on occasion, employees must overcome operational challenges and pick up the slack manually to maintain digital service levels. Bottom line, a complex network of systems might give the appearance of efficiency to your customers, but if employees must perform operational miracles on the back end to keep up the facade, it’s a shaky foundation for success.

Every lender aiming for loan growth must take the time to review all policies, procedures and processes to uncover pain points that limit staff efficiency. Think procedures still in place for legal requirements that no longer exist, or the need to duplicate compliance checks to satisfy two systems. I can’t stress enough how important it is to locate these friction points and eliminate them, instead of shifting the load to your staff. It can be a challenging job, but it’s not thankless; the effort required to streamline back office operational efficiency is a gift that keeps on giving.

When employees are able to close a loan or open a new account quickly and easily, they provide better service to members, who in turn bring your credit union more business. These positive operational experiences power each other. And imagine how much easier it will be to optimize your operations when you have an all-in-one origination system, instead of several cobbled together.

These efficiencies benefit members who want a modern experience, as well as employees who find it easier to close loans quicker. These positive operational experiences power each other.

Regulators Expect More

Most of our lives have moved online and cybercriminals have followed. According to data from Allstate Identity Protection, fraudulent new loan accounts grew by 61% from 2020 to 2021 and accounted for more than half of the firm’s identity theft claims. In Q4 2021, fraudulent loan applications represented 42% of all ID theft cases.

An origination system provides multi-factor fraud protection and offers access to a wide network of best-in-class security applications that can be configured to meet your organization’s needs. This is one area where saving money with a bolt-on solution doesn’t pay.

In addition, regulators are more closely scrutinizing the way in which financial institutions interact with consumers. On March 16, the CFPB updated its exam manual to expand discrimination enforcement actions beyond lending, to include a wide range of financial products like basic savings and transaction accounts.

All-in-one systems can be automated to treat consumers fairly across the board, without worry of inconsistencies caused by subjective human decision making, poor system integration or a tangle of outdated policies and procedures.

When it comes to operations and system efficiency, we’re learning that less is more. Lenders must provide modern origination solutions that satisfy everyone’s expectations, not just borrowers. Employees and regulators expect it too.

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The big 100 & Anne Legg talks data

By Summer Naomi Interior

Break out the fireworks, ya’ll! This week is a big one for CRMNEXT’s Banking on Experience podcast, as we are celebrating our—drum roll please—100th Episode!

And it only makes sense to feature a truly extraordinary guest in honor of the occasion. Anne Legg, Founder of THRIVE Strategic Services and Author of Big Data/Big Climb returns to the show to talk all about how data can help create “goosebump moments” at your credit union.

What’s Covered?

Anne’s own top-of-mind “goosebump moments.”

Our expert is clear on the 3 things she’s most passionate about: credit unions, their data, and how that data can impact their members’ lives. That last one is, as she puts it, “the magic this industry gets to do every day.”

Anne shares some personal experiences across her career that have given her those “goosebump moments” and left a lasting impression, and you won’t want to miss a single detail.

How CUs can better leverage data and sustain their data strategy.

Anne offers great tips here and gives a huge shoutout to a neo-bank called Dora and to Michigan State FCUfor their awesome efforts in this area.

But the most important thing Anne believes a CU can do? Ask yourself: what is the friction that my member has doing business with me? As she puts it, “Identify your member friction… Prioritize it. And figure out—with the talent you have, with the time that you have, and with the tools you have, what can you do to reduce or solve that member friction?”

Biggest challenges around building data strategy (and how to overcome them).

Anne lays out in gorgeous detail the top 5 areas CUs should really tackle, and—trust us—you’ll want to take notes. But, in a nutshell, her must-haves are as follows:

  1. Clear data strategy
  2. Tangible use case that’s focused back on the member
  3. Clear roadmaps
  4. Foundational data governance
  5. Leveraging your people, so they can turn data into action that improves your members’ lives

Empowerment: the role technology can play 

Our expert lays out a fantastic analogy, with you in the role of a “magician.” (And let’s be real, who doesn’t love that idea?)

In her words, “If we’re gonna’ be the magician, we’ve got to make sure that we have that talent capability to be able to leverage that tool when we need to use it. If we just buy the tool for the tool’s sake, it’s gonna’ be an awesome wand…but does anybody even know how to use it?”

Ultimately, for Anne, being empowered by tech comes down to this: you’ve got to have the technology that’s appropriate for the business problem you’re solving, and you must have the capability to leverage it.

Anne’s take on the untapped potential of data in the industry 

Our expert doesn’t skip a beat answering this question: “It’s that whole predictive analytics piece.” Anne believes that’s the key to creating more “goosebump moments” with your members.

Making the world a better place (yes, really).

One word: LISTEN. We love what Anne has to say about this, and we’re fairly certain you will too.

Here’s to a 100th episode that brings it all back to why this podcast was created to begin with: providing actionable insight from extraordinary experts in the industry that—ultimately—leads to “goosebump moments” in your financial institutions.

Want to contact our expert? 

Visit www.anneleggthrive.com, where you’ll find a whole library of practical info around data education AND where can download the first chapter of Anne’s book, Big Data/Big Climb for free.

Find this interview, and many more by subscribing to Banking on Experience Podcast on iTunes. You can also find us on SpotifyGoogle Podcasts, or visit our page on Casted.

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Mastercard SpendingPulse: Services on the rise in March, while U.S. retail sales grow 8.4%*

As we lapped two years since the first Covid lockdowns, March reinforced the ongoing rebalance to pre-pandemic ways of consumer spending. From airlines to lodging, spending on services is making its comeback, while in-store retail sales are rebounding as consumer mobility increases. According to Mastercard SpendingPulseTM, which measures in-store and online retail sales across all forms of payment, total retail sales excluding auto increased 8.4% year-over-year (YOY) and 18.0% compared to pre-pandemic spending (2019), not adjusted for inflation. This is similar to the YOY growth experienced last month and slightly above January growth levels.

While the pandemic and lockdowns may have temporarily limited where consumers could spend their paychecks and free time, key trends for March 2022 highlight the diversification of consumer spending across sectors and channels. Of note: 

  • Goods AND services: Airline spending took flight as the highly anticipated return to travel drove YOY airline growth up 44.8% in March, while Restaurants (+19.1%) and Lodging (+46.4%) also grew significantly. But an increase in services didn’t halt spending on goods as the Luxury (+27.1%), Apparel (+16.0%) and Department Store (+14.0%) sectors saw double-digit growth.
  • In-store AND online: In-store sales continued to rebound, while e-commerce declined YOY in March. However, online sales are still up 83.7% vs pre-pandemic levels while in-store sales are up 9.4% compared to March 2019.
  • Surf AND ski: Hawaii (+12.9%), Wyoming (+12.2%), Colorado (+11.0%), Florida (+9.7%), and Texas (+9.1%) topped the list of states with the strongest growth rates in March. Hawaii experienced the strongest growth rate for the month as the state has increased in popularity among many honeymooners and tourists looking to escape within U.S borders.
  • Fueling up AND getting out: Fuel and Convenience spending saw YOY growth rates above 40% for most of the month. While much of the growth is driven by inflation at the pump, consumer mobility has continued to recover as commuter traffic and leisure travel picked up.

“Retail sales remain strong but are stabilizing as consumers resume spending on passion areas like travel, live entertainment, indoor dining and other in-person activities,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “After nearly two years of cautious optimism around the broader reopening, it’s a healthy sign that consumers are returning to a balanced level of spending across retail sectors and services.”

*Excluding automotive sales. Mastercard SpendingPulse defines U.S. retail sales as sales at retailers and food services merchants of all sizes; sales activity within the services sector is not included.

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Notarize ranked #24 on Financial Times’ list of fastest growing companies

April 5, 2022 – Notarize is honored to be named #24 on The Financial Times’ list of The Americas’ Fastest-Growing Companies 2022. Our growth has placed us among the elite list of only 500 companies among millions across the Americas. This honor validates online notarization as an important part of digital transformation across key industries, and especially within financial services.

Last year, we raised $130 million in our Series D in order to support dramatic increases in the demand for online notarization, which is proving to be an ongoing need post-pandemic. In addition to investing in talent from engineering to customer support, marketing and sales, we’re also committed to public policy leadership in order to ensure that digital transformation is embraced across regions and industries. Notarize has also established partnerships with companies like TIAA, TransamericaFedEx and Adobe, adding to our roster of long-time partners including Stripe, Dropbox, Redfin, First American, Zillow, JD Power & Associates, and more.

We’re rolling out new products, integrations and industry-specific capabilities to make it as easy as possible to complete notarizations online and to support fully-digital, seamless transactions that improve the customer experience and impact businesses’ bottom lines.

Our unwavering commitment to our customers

Our commitment to bring trust online and provide a best-in-class online notarization experience defines everything we do. The unrivaled experience we offer our customers is predicated on our intuitive, robust software, top-notch partnerships, and thought leadership that is helping drive policy changes nationwide to bring more online opportunities to our customers.

The incredible growth we’ve experienced that has landed us on this list is thanks to our network of notary publics who power our platform and our customers who have trusted us to take part in their most important transactions. Every notarization is important, and we’re thrilled that so many people and businesses rely on Notarize to get the job done.

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PSCU Partners with Q6 Cyber to further enhance cyber and fraud threat monitoring and intelligence capabilities

April 5, 2022 — PSCU, the nation’s premier payments credit union service organization (CUSO), today announced it is partnering with Q6 Cyber, a leading provider of e-crime intelligence for financial institutions worldwide, to better identify and respond to advanced cyber threats and fraud activity with greater speed, accuracy and effectiveness.

“Every year, Q6 Cyber identifies millions of hacked or compromised financial accounts, enabling our clients to preempt account takeover and fraud, while also substantially reducing payment card fraud by up to 50% year over year,” said Eli Dominitz, CEO at Q6 Cyber. “We look forward to working with PSCU to deliver these types of results to the CUSO’s Owner credit unions and their members to help them stay ahead of and combat cybercrime.”

Q6 Cyber will collect information from multiple sources, then analyze and correlate it to provide targeted, valuable and actionable intelligence to proactively disrupt cybercriminal and fraudulent activity directed toward PSCU, its Owner credit unions and their members. Additional services Q6 Cyber will provide include detection of mule accounts, Dark Web monitoring and analysis of compromised employee credentials.

“As we saw in PSCU’s 2021 Eye on Payments study, consumers are increasingly gravitating to digital and online experiences, leading to an increase in e-commerce and online transactions, which is in turn driving online fraud numbers even higher,” said Jack Lynch, chief risk officer at PSCU. “Our partnership with Q6 Cyber is primed to position PSCU to best help our Owner credit unions and their members combat cybercrimes, with a goal of stopping these types of fraudulent activities before they can even occur.”

PSCU employs a connected approach to combat fraud, utilizing a number of technologies and best practices to block fraud at the point of sale, in the contact center and online, among other channels – while delivering an enhanced cardholder experience. This includes PSCU’s proprietary Linked Analysis, developed by PSCU’s in-house fraud experts to prevent fraud before it happens by leveraging cross-network analytics. In fiscal year 2021, the CUSO stopped nearly $500 million in fraudulent transactions for its Owner credit unions and their members.

In addition, PSCU’s Enhanced Fraud Services addresses fraud concerns for credit unions with unique characteristics in their membership portfolio that require a customized approach. Credit unions receive an assigned risk program consultant who, on a daily basis, holistically analyzes the credit union’s fraud and risk mitigation initiatives. From there, risk program consultants build a customized program and response plan, which helps strengthen a credit union’s existing anti-fraud efforts in order to more quickly and accurately prevent fraud and reduce losses.

About PSCU

PSCU, the nation’s premier payments CUSO, supports the success of 1,900 credit unions representing nearly 7 billion transactions annually. Committed to service excellence and focused on innovation, PSCU’s payment processing, risk management, data and analytics, loyalty programs, digital banking, marketing, strategic consulting and mobile platforms help deliver possibilities and seamless member experiences. Comprehensive, 24/7/365 member support is provided by contact centers located throughout the United States. The origin of PSCU’s model is collaboration and scale, and the company has leveraged its influence on behalf of credit unions and their members for more than 40 years. Today, PSCU provides an end-to-end, competitive advantage that enables credit unions to securely grow and meet evolving consumer demands. For more information, visit pscu.com.

 About Q6 Cyber

Q6 Cyber is an innovative E-Crime Intelligence company based in the USA and Israel, serving the world’s leading financial, technology, healthcare, and retail corporations. We monitor the “Digital Underground” – a vast universe where cybercriminals and fraudsters operate and interact. Our 24×7 coverage includes not only underground forums on the Dark Web and Deep Web, but also malware networks, private messaging apps, and other technical infrastructure used by threat actors. We deliver targeted and actionable intelligence with unparalleled speed and precision, resulting in high ROI through significant reduction of fraud, cyber and data breaches, and other electronic crimes. Q6 Cyber is led by veterans of the NSA, US Secret Service, and Israeli Military Intelligence (Unit 8200). Learn more at https://www.q6cyber.com.