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Elevate Member Experience While Tackling the New Convenience and Security Reality


As digital transactions continue to reshape business and many aspects of our daily lives, consumer expectations for their financial institutions, including credit unions, have also evolved.

More consumers expect the perfect balance between security and convenience, demanding secure transactions that are also fast and easy. Consumers will take their membership and money elsewhere with the swipe of an app.

The new consumer reality combined with increased competition from other financial institutions is bringing many credit unions to a crossroads. Providing faster and easier digital transactions is great for the consumer experience however, the cybersecurity risks that come along with these conveniences can destroy consumer trust and a credit union’s reputation.

According to a Beazly report on breach insights, credit unions, particularly with less than $35 million in annual revenue, accounted for 81 percent of hacking and malware breaches at financial institutions in 2016. In the same year, Juniper Research predicted online banking fraud will hit approximately $6.9 billion by 2020.

Despite the availability of advanced cybersecurity technology, cybercrime is growing because criminals are adapting their tactics, particularly with a keen focus on credit unions.

Credit Unions and the Consumer Experience

Within the last decade, credit unions have adopted online/mobile banking and digital payments, allowing them to grow membership and compete with large banks. These efforts have helped credit unions maintain their collective position as a more customer-centric alternative to large banks.

However, credit unions still lag behind in other high-demand conveniences such as faster transactions and peer-to-peer (P2P) payment.

In some cases, credit unions struggle to add these offerings because their technology infrastructure will not provide the necessary layers of security. Consider faster transactions for example. Consumers prefer to skip the slower process of pending charges, but don’t realize faster transactions mean less time for credit unions to detect or stop fraud. The larger FIs have a handle on security in the new digital transactions age, but they also have more resources than credit unions, financial and IT staff, to try to stay ahead of today’s fraudsters.

Make the Most of Multilayer

So, what is the answer for credit unions? When it comes to multilayer security, institutions of any size share the same key obligations; protecting the institution, the network and the consumers. Each layer is multifaceted, but here are some common components.

Institutional security includes database security, back up and disaster recovery, and operating security. Network security includes network scanning, real-time response and Internet security. Consumer security includes biometrics, fraud protection and authentication. There are several additional pain points but even covering the few listed here can be a struggle for credit unions.

As with any other business investment, credit unions have to carefully consider security options that will meet compliance requirements and maintain consumer satisfaction without “breaking the bank”. Consumers might not want to think about their financial institutions budgeting or bargaining for security, but it is a reality.

Most credit unions are non-profit institutions that operate on tight budgets which, often do not allow room for security options that come with all the bells and whistles. As a result, sometimes credit unions don’t have the means to cover each layer, or every aspect of each layer, which can affect both convenience and security.

However, with the recent increase in cybercrime within the past few years, credit unions have been forced to foot the bill for stronger security. All financial institutions are considered prime targets, but cyber criminals have begun specifically pursuing credit unions because they assume smaller institutions do not have the same defenses as large bank corporations.

In addition, cyber criminals are quickly adapting to new security measures. As security technology continues to advance, so does cybercrime tactics. Cyber criminals are becoming more sophisticated and more organized, resulting in credit unions spending more dollars to keep up with industry threats and compliance and regulation changes.

Your Partner in Security

An effective approach to winning the security battle is having members join you in the journey. Highlight current security capabilities and work to educate members on the steps they can take to secure their data. Show consumers the advancements you’ve made and use their feedback to determine which security measures are most important to them.

Don’t Forget the Basics

With all the constant buzz and news around cybersecurity, credit unions may be tempted to forget the basics and the reasons consumers partner with them in the first place.

Security issues are taking place in the broader context of life, and members still need a partner to help them manage major life events such as purchasing a home or car, investing, retirement and wealth transfers. In many cases, some of those processes can begin with online applications and evaluations. Though these benefits don’t make the news, they offer the same level of convenience and deliver a better member experience.

Security is a priority, but can’t stand alone. Credit unions must continue to differentiate themselves through stronger member relationships while delivering security in a convenience-driven environment. A credit union’s ability to ensure secure transactions should be what differentiates its conveniences, not what hinders them.


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