The credit union industry has always been firmly invested in the quality of interactions between credit union and member. As society continues to change it remains incredibly important for credit unions to move in tandem with technology and processes that rise up to meet the needs of members who are also digital super users. The importance of fast and convenient access to financial solutions also means that trust and security have to be interwoven in every transaction.
Pandemic era circumstances, such as sequestration and supply-line issues, propelled a great deal of consumer experimentation for those who sought out technology as a balm and solution for everyday stresses that ranged from simple bank deposits to payments for services and goods offered via eCommerce and social media platforms.
During the tumultuous period of 2020-2022, identity fraud and scams flourished across a virtual landscape plagued with fraud actors who took full advantage of U.S. government relief efforts to extract funds from a variety of programs ranging from unemployment benefits to paycheck protection program benefits. Consumers often found themselves as unwilling pawns while financial institutions were plunged into the deep end of the ocean trying to figure out how to identify, track and send back millions of dollars that suddenly showed up in the wrong accounts–directed to the wrong depositors.
As consumers performed more digital transactions to ease pandemic social restrictions, criminals seized upon this vulnerability to take advantage of their isolation and growing need to locate sanitary supplies and hard-to-find consumer staples. The result of consumer adaptation to new, digitallyinfused lifestyles resulted in unfortunate victimization at the hands of ever-vigilant cybercriminalswho never pass on an opportunity to extract funds and high-value merchandise from their victims.
A high degree of technical aptitude and a non-existent moral compass are, more or less,“standard issue”for the criminals who thrive on the remorseless victimization of others. Let’s face the facts for a moment–it takes a rather low individual to manipulate an elderly or vulnerable adult into a heightened state of panic that replaces their ability to make sound judgements. Victims of identity fraud often suffer from shame when they experience a loss that in hindsight appears to have been such a simple ruse to avoid. As non-victims and credit union professionals, we have to remind ourselves that passing judgement on identity fraud victims by referring to them as being duped or swindled places the true victim of a crime at an extreme disadvantage.
Javelin Strategy & Research recently published itsannual identity fraud study“The Virtual Battleground”, which cited incredible statistics that continue to support the fact that identity fraud is one of the fastest-growing criminal enterprises to infiltrate financial services in years.
One of the more poignant findings in the 2022 study revealed that 36% of consumers who recently reported fraud issues to their financial institution wished that they had been treated like a victim of fraud rather than a perpetrator.
Reading about the actual client experience and understanding that members simply want to be treated with empathy and respect is no different than the teachings imparted by parents and guardians worldwidewho tell their children to imagine themselves walking in someone else’s shoes for a day. The powerful message in hearing this declaration directly from an actual identity fraud victim allows credit unions to fine-tune the member experience to demonstrate why empathy matters in a service environment that can, at times, be fraught with high volumes of member calls and crushing workloads.
Another facet of superior member experience is the focus on fraud prevention education. For many years, there have been very few quantifiable statistics to support the effectiveness of member education beyond the assumption that it prepares consumers to deal with the growing array of fraud scams and data breaches that have plagued millions of consumers for at least two decades.
Javelin findings conclude that 4 in 10 consumers foundthe fraud prevention resources offered by their primary financial institution (PFI) are valuable. The good news is that 65% of consumers found their PFIs educational material useful once it was located. The bad news here is that 52% of consumers were unaware that their PFI offered educational resources because they were often minimized and buried behind several website layers or “clicks.”
It is important for credit unions to remember that basic fraud education can be a perennial mainstay, but there must be constant cultivation of the information resources to ensure effectiveness. This isn’t the time to post educational material onceperyear and then promptly forget about it. Member engagement can be as simple as a lively blog, a podcast or a short video that helps members translate safety tips into their everyday behaviors.
“Tell me how you are protecting me from identity theft and show me safer ways to make purchases and protect myself.”
The Javelinreportcontinued to dig deeper into the consumer psyche by asking consumers to express what it’s going to take to make them feel protected by their financial institution. The feedback was incredibly insightful and rooted in the most basic human need for reassurance during times of great uncertainty. Consumers indicated that they want to be told how their bank or credit union is protecting them from fraud. They are not asking for a highly technical barrage of how, but rather a simple reassurance that security is top-of-mind for every accountholder.
The ultimate mic drop? Consumers expressed that they want to learn from their PFIs how to prevent identity fraud by making safer purchases. Could there be anything more gratifying? The simple answer rests squarely on you–the trusted credit union advisor. Just remember to dust of your empathy skills, sharpen your educational acumen and reassure your members that their best interests are still squarely protected within the walls of the credit union.
About the author:
John Buzzard has worked with credit unions for over 20 years as a fraud subject matter expert. Prior to joining Javelin Strategy & Research as a Lead fraud & security analyst, John worked as an industry fraud specialist for a leading credit union service organization.