Balancing Trends of Convenience & Security
While credit unions should continue to work toward convenience, security should still be their priority.
While technological advancements continue to drive the evolution of digital transactions, credit unions are feeling the pressure to keep up with industry trends to compete with larger institutions and remain relevant to their members. Convenience is at the center of the member experience today – driving many of the offerings credit unions provide. With more than 50% of consumers using mobile banking, according to the Federal Reserve, credit unions realize the importance of putting financial services in their members’ hands.
Credit unions have long offered mobile banking, digital payments, bill pay and even text message alerts about account activity. However, they still lag behind their big bank counterparts when it comes to rolling out debit card management, biometrics and even faster transaction processes. These features are great for the member experience, but they may come at a cost.
Modern Conveniences Bring More Threats
Members want the benefits of digital features, but don’t understand how some of these conveniences open credit unions and their members to more cyber-vulnerabilities. A Verizon study found phishing and point-of-sale device hacking are leading methods for breaches. Considering mobile devices are prime vehicles for the nature of these tactics, mobile dependency only makes it easy for fraudsters to attack.
Consider mobile deposit and transfer. The ability to take a picture on your phone to deposit a check eliminates the need to visit a credit union to perform the same task. Unfortunately, it doesn’t stop the fraudster from trying to capitalize on security holes.
All it takes is a skilled fraudster to hack into the mobile app to access personal information and the account number from the archived check image. Then, boom – the fraudster has successfully taken over the member’s account.
What about debit card management? With the ability to freeze card usage and change a card PIN number, cyber criminals can take advantage of any unsuspecting member in the blink of an eye.
Despite the implementation of advanced cybersecurity technology and stricter privacy regulations, cybercrime remains a threat because cyber criminals are quickly adapting their tactics with a keen focus on credit unions. In recent years, credit unions have taken a major hit from cybercrime. According to a 2017 NAFCU survey, credit unions, on average, spent $362,000 in costs associated with merchant data breaches. With this in mind, credit unions must proceed with caution when it comes to providing members with convenience.
What’s the Solution?
Credit unions serve as keepers and protectors of their members’ assets, as well as educators that help members make smart financial decisions. Trends come and go, but these functions of the credit union will never change, and they have to find ways to align these purposes with what members believe is convenient. Instead of viewing convenience and security as conflicting aspects of operation, credit unions should focus on mastering the art of allowing the two worlds to work in tandem.
One approach is to educate members and empower them to invest in additional resources such as antivirus and internet security software for their mobile devices. Smartphones are now considered handheld computers, so it only makes since to protect them as we would desktops.
Equally important is assuring members that efforts are in place to provide more secure and convenient features in the future. Showing members the advancements you’re working toward is a great way to keep their interest and reinforce trust.
Lastly, don’t forget to highlight other available conveniences. Credit unions also offer online services and resources that assist members with major life events such as purchasing a home or car, investing, saving for retirement and making wealth transfers. In many cases, these activities can begin with online application processes, which add value to the member experience.
What Really Matters
In a world that has become one led by digital transactions, consumers’ expectations for their credit unions have evolved. However, just because convenience is trending doesn’t mean members have dropped their expectation for secure transactions. While credit unions should continue to work toward convenience, security should still be their priority.
Rich Huffman is Senior Director, Product Management for Equifax. He can be reached at 470-525-7750.