2017 is full of Challenges – and Opportunities – for Credit Unions
If you’re feeling a little apprehensive about 2017, you’re not alone. The last year has been tumultuous, to say the least. Many credit union professionals, from the teller line to the CEO’s office, are waiting to see what challenges this year will hold.
What’s certain is that challenges will come. What’s left to be seen is how you will meet them. This article, and those to follow in the coming months, are meant to equip you with the knowledge and perspective to view some specific challenges – unique to the credit union industry – as possibilities to better serve your members and grow as an organization.
“Whether we want them or not, the New Year will bring new challenges; whether we seize them or not, the New Year will bring new opportunities.” – Michael Josephson
Challenge: Stagnant or declining membership among small- to mid-sized credit unions. While nation-wide CU membership increased modestly in 2016, many saw little to no growth for the same period.
Opportunity: Multiple customer groups are ripe for membership. One popular example to consider is millennials – but maybe not for the reason you think.
Though many millennials encountered a challenging job market after graduating from college, most are now doing well, ready to save, invest, and start families. However, warns Joel Windels at Social Media Week, “targeting Millennials is not an effective strategy if generating revenue is the only goal.”
Millennials just happen to prefer several things that, if implemented properly, are both beneficial to CUs and attractive to a broad swath of potential members.
* Relationship & Trustworthiness
Counter to what many believe, millennials desire close, face-to-face relationships with financial professionals, much like the banking relationships experienced by generations before them. Unlike the nation-wide mega-banks that now dominate our culture, the local Credit Union is seen as trustworthy and uniquely positioned to offer the personal, one-on-one experiences most potential members are now in search of. Focusing on marketing and customer service activities that foster relationships with your members can help you build and maintain a strong membership base.
What are you doing to insure that your members have a positive and convenient in-branch experience? How are you creating world class customer service?
* Communication & Responsiveness
While it’s easy to dismiss the myriad of apps, devices and social platforms used by millennials as mere entertainment, don’t miss out on the real need being expressed by their use: the need to communicate clearly and easily with others from anywhere, any time. Again, this is not a need unique to millennials.
While a strong social media presence is a big part of this, it is vital to have the tools in place your members want to manage their finances and communicate with credit union employees.
The technology necessary to provide this experience – mobile apps, remote deposit capture, home banking, etc. – is affordable and secure. Working with a core service provider who understands this and offers these products is more important than ever before.
Challenge: Growing cyber security threats to Credit Unions and members. Adding more and more online and networked services via APIs, along with the increased use of email and social media to communicate with members, means greater rick of cyber attacks to Credit Unions.
* According to a recent article in CU Times, four out of ten businesses don’t have the tools or knowledge to fight off cyber attacks.
* As reported in Small Business Trends in April 2016, Symantec study showed that 43% of cyber attacks target small businesses.
* The FBI believes this threat is so great that they released this special bulletin in September 2016.
Opportunity: Affordable, effective tools and methods are now available for CUs to provide a safe, secure cyber environment for members and employees.
An August 2016 article on NCUA.gov suggested Credit Unions implement some basic defenses against ransomware. While useful, we’ve gone one step further and put together some specific, concrete steps your Credit Union can take to protect you and your members:
* Hold monthly cyber security updates for all employees. Teach them how to recognize threats in email, on social networks and web sites.
“Even with the strongest cyber security defenses available, if someone downloads a document containing a virus or clicks on a malicious link, all bets are off,” said Brian Hoppe, Chief Technology Officer of Data Systems of Texas – Sharetec. “A credit union’s first line of defense must be continual education of the people who use the network.”
* Employ a comprehensive suite of preventative security tools:
– Managed firewall – like the locks on the doors at your Credit Union, your firewall is the most basic level of network security, and determines what ports on your network are open to internet traffic. A managed firewall is continually updated to prevent known security threats.
– Intrusion Protection Service – your network’s ‘security cameras’, an IPS actively scans your network for anyone attempting to exploit known vulnerabilities.
– OpenDNS – The strongest level of cyber security available, protects your users’ network activity, wherever and whenever they access your network.
– Penetration Testing – the practice of testing a computer system or network (via a secure, highly structured, professional hacking attempt) to identify and address security vulnerabilities before malicious parties exploit them.
* Backup all data using a secure, off-site service.
While many Credit Unions back up data – both financial and operational – to offsite locations, most of these solutions remain susceptible cyber attacks because they remain connected to the home network.
When asked to recommend a secure offsite backup tool, Hoppe replied: “We work closely with Datto. Unlike other offsite or cloud-based backup solutions, Datto protects against threats like viruses and ransomware that can be easily spread through file syncing. They’re a central part of any business continuity or disaster recovery plan.”
For more information on how Sharetec can help your Credit Union serve customers better, increase profitability, and turn challenges into opportunities, call 800-245-7504.
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