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CO-OP Financial Services Blog: Insight Vault

November Top 5 Must-Reads for Credit Unions

General / by Senior Manager, Market Analysis

11-25-14_Top5MustReadsThis month on Insight Vault we’ve been talking about transformation. What’s transforming the credit union space? No surprise here: It’s mobile payments. What drives the growth and adoption of mobile payments? And how do you compete in a crowded, rapidly-changing marketplace? Learn more in this month’s Must-Reads:

Visa’s 2015 Action Items: Apple Pay, Tokenization, Passwords, EMV

As the New Year approaches, Visa is thinking about many of the same things you are: Apple Pay, tokenization and EMV – as well as the pros and cons of passwords. This is an interesting take, not only on Visa’s plans, but also the challenges facing the card industry.

Go Digital, But Don’t Forget Banking’s Human Factor

As branch transformation and mobile delivery continue to flourish, will human interaction and values become a differentiating factor, especially for smaller institutions like credit unions?

Banks are Facing Increased Competition from Startups

This author’s opening graphic is a screenshot of Wells Fargo’s personal banking and small business homepages with callouts to competitive products and services. It’s worth 1,000 words, succinctly showing the current state of fintech startups and how they impact financial institutions.

INFOGRAPHIC: The Vastly Different Payments Worldview of Millennials

How differently do Millennials view payments? Some 44 percent would rather use mobile than cash for small payments; 50 percent want mobile payments to speed up; and 70 percent think payments will change dramatically in the future.

Who Is Driving Mobile Money Adoption?

It’s not just the demographics, but growth in mobile payments that make this story an interesting read. A significant proportion of North Americans – 40 percent – have used their smartphones to make payments at merchant locations, up from just 16 percent two years ago, according to an Accenture survey.

Does EMV Use Tokenization? Your Questions Answered

General / by Senior Manager, Public Relations and Corporate Communications

11-24-14_TokenizationFlowAs part of CO-OP’s “Innovation in Payments” webinar held November 18, Caroline Willard, EVP, Markets and Strategy, and Michelle Thornton, Manager, Core Products, fielded questions about the latest security technology. What did credit unions want to know?

Q: Is it true that if you hover over an EMV card or an iPhone using Apple Pay, you can capture the data on it? 

A: One important thing to remember is that both of these technologies use cryptograms to secure data. So the data that someone might capture as part of an EMV or Apple Pay transaction isn’t repurposeable.

In Apple Pay, the token that is on a particular phone for Apple Pay is specific to that phone: That phone has identifying data. So if a token were used from any other device, it wouldn’t work because the cryptogram wouldn’t have the identifying information from the correct phone.

On the EMV side, there are transaction counters that would show that a new transaction wasn’t valid because the number and cryptogram were already seen in a previous transaction.

Q: Does EMV use tokenization?

A: EMV does not use tokenization; they’re two different technologies. It’s possible to become confused because they do both use similar kinds of technology, so you hear them talked about in the same breath. They both use cryptography, but EMV and tokenization are two distinct things.

Q: In Apple Pay, are tokens assigned per card or per transaction? 

A: The token is static, but it’s specific to that phone and that card. So, for example, if you’ve got a card and you’ve got three phones, you would have three different tokens. Each phone would have a static and a unique token for that one card.

What is dynamic is the cryptograms around those tokens. Those are unique each time you do a transaction.

Q: Would Apple Pay or EMV have prevented the Target breach?

A: It wouldn’t have prevented the breach itself, but what EMV would have done is prevented compromised numbers from being used to create counterfeit cards. EMV cards are difficult to reproduce, so fraudsters typically don’t attempt it.

The other part of the question was about whether Apple Pay would have prevented it. Again, it wouldn’t have prevented the breach, but it could have prevented certain types of transactions using those numbers.

CardNav by CO-OP, for a third point, would absolutely have been able to prevent some fraudulent activity by alerting members to suspicious transactions and enabling them to shut down their cards if there was a compromise.

In each case, it’s not so much a question of preventing the breach, but what happens with compromised numbers after a breach occurs. These three technologies can absolutely help in different ways.

Q: Can CardNav by CO-OP be fully integrated with existing CU mobile apps, so that members can access it using a single sign on? 

A: We will be deploying on an API version of CardNav by CO-OP, so you can tuck it into your existing mobile app and have it be accessible to your members without having a separate sign on. That’s on our roadmap for 2015.

To watch a recording of the full “Innovation in Payments” webinar, click here.

Find out more about Apple Pay and tokenization for your credit union here.

Learn more about EMV for your credit union here.

Get the latest on CardNav by CO-OP mobile card controls and alerts here.

Do More Locations Make Happier Members?

General / by Vice President, Marketing

Two Efficiency Boosts for Your ATMsCredit unions are at an odd crossroads with locations. On the one hand, changing branch economics make it difficult to justify adding – or even maintaining – an extensive number of locations. On the other hand, members want convenient access, even when they move or are not close to home. These opposing trends raise a curious dilemma: Do more locations make happier members?

CO-OP research suggests that they do – and reveals an alternative approach to achieving locational happiness. CO-OP and Raddon Financial Group surveyed 20,000 members at 25 credit unions in Fall 2013 to find out how CO-OP ATMs and Shared Branches help credit unions strengthen their member relationships. What did we learn?

CO-OP ATM and Shared Branching users are engaged members. In national Raddon surveys, three of the four top influencers in choosing a PFI (Primary Financial Institution) were location-based: convenient branch locations, access to many ATMs with no surcharge fees, and convenient ATM locations.

Users of CO-OP ATMs and Shared Branching tend to live farther from the nearest branch: That’s why they’re using these locations. Yet, 81 percent of frequent CO-OP ATM users and 71 percent of frequent CO-OP Shared Branching users considered their credit union to be their primary financial institution. Only about half of non-users called their credit union their PFI. 

Having more options helps you serve younger members, increase product usage, build loyalty and create fans:

  • Millennials connect with Shared Branching and ATMs. Though Millennials comprised only 20 percent of the survey sample, they represented 26 percent of members who used both CO-OP Shared Branching and ATMs.
  • ATM and Shared Branching users do more business with their credit unions – translating into more deposits and more loans, even when members are geographically distant.
  • Providing access through CO-OP ATMs and Shared Branching builds loyalty. And the more members use these channels, the more loyal they say they are.
  • CO-OP ATM and Shared Branching users rank their credit unions high, indicating a greater likelihood of bringing future business to their credit unions and recommending their credit unions to friends and family. 

Not only does it appear that members are happier when they have access to more locations, but CO-OP Shared Branching and ATM access seem to fit the bill. Through CO-OP, members enjoy greater access:

  • 30,000 surcharge-free ATMs nationwide – more ATMs than any bank network.
  • More than 5,000 Shared Branching locations – the fourth largest branch network in the U.S.
  • 2,200 Vcom self-service Shared Branching kiosks, many of which are conveniently located within 7-Eleven stores. 

Meanwhile, credit unions don’t have to struggle with having to provide more locations in an environment that offers less economic return per location. CO-OP ATM and Shared Branching make massive access achievable. And that makes your members happier, all the way around.

Do You Know People Like You?

General / by Senior Manager, Public Relations and Corporate Communications

11-17-14 DariaMuskCO-OP is expanding its “Empowering People” initiative by increasing the frequency of new content to provide financial literacy education to Millennials and raise awareness of credit unions as a partner on their financial life journey.

A key component of the campaign is our growing library of “People Like You” stories – testimonials from Millennial credit union members. We’re asking for your help to expand our archive of these inspiring stories.

Nominate a member and help drive the growth of the credit union movement! You can do so right now here.

Empowering People. Amplifying Dreams is an integrated content marketing and social media campaign developed on behalf of our clients to help consumers – especially Millennials – better understand how our industry empowers individuals to achieve their financial goals. As we roll out new educational content for Millennials, we also intend it as a resource for all credit unions – they are welcome to use it for their own outreach.

The content from CO-OP’s Empowering People. Amplifying Dreams campaign focuses on the “how-to’s” of establishing a long-term, secure financial future. This includes education on the products and services of credit unions as well as on the mission and values of the entire movement.

CO-OP will provide content on its own platforms, including the campaign website and three consumer social media channels, as well as through editorial and advertising on digital channels managed by online publishers (such as bloggers) and business partners. The content is intended to be “portable” – available for repurposing or linking-to by these additional sources.

The Empowering People. Amplifying Dreams website at http://co-opcreditunions.org serves as the initiative’s content hub, and provides convenient access to the CO-OP Credit Unions Twitter feed –@innovatebanking – in addition to icons leading to Facebook and Tumblr.

In addition to the People Like You stories, the website includes a wide variety of content for consumers considering their financial options, including a locator for credit unions and a new blog, set to launch by the end of the year.

Again, to nominate a People Like You member, click here. And visit our website here.

Convenience in Store: Vcom Boom at 7-Eleven

General / by Senior Manager, Public Relations and Corporate Communications

Convenience in Store: Vcom Boom at 7-ElevenCO-OP Shared Branching is expanding its reach in early 2015, when the total number of Vcom self-service shared branching locations will hit 2,500 – many of which will be located within 24-hour 7-Eleven stores.

Vcom terminals combine the convenience of ATM access with a unique menu of services, including cash loan advances, loan payments by check, transfers between credit union accounts, and a recent history of items cleared. Along with new terminals in new locations across the country, the existing fleet of Vcom terminals is getting an update. Together with 5,200 branch locations within the CO-OP Shared Branch network, this new fleet of Vcom units will bring the combined total number of shared branches and self-service units to nearly 8,000 across the country.

“We’ll be adding locations in five key states – Illinois, Massachusetts, Michigan, New Jersey and New York,” says Bonnie Kramer, Vice President of Business Development and Operations for FSCC, LLC, part of CO-OP Shared Branching. For many participating credit unions, shared branching spells the difference between limited local in-person access and ample nationwide coverage – particularly as the economics of branch locations are changing.

In that vein, the Vcom fleet is part of a larger movement toward self-service that is transforming the branch location into a smaller, sleeker, more self-directed channel. With its line NextGen ATMs – also featuring an expanded slate of services – and new video teller technology in the queue, CO-OP is helping credit unions and their members make the leap to a new kind of member experience.

“Using this new technology requires credit unions to train their members and guest members,” says Kramer. “There’s a registration and authentication process for them to go through the first time they use it.” For members who need help at a self-service kiosk, a toll-free phone line is available; concierges field questions in the branch. “Our team at CO-OP has all kinds of tools for credit unions to use to help their members get oriented,” says Kramer. “Once they’re set up, they’re ready, whether they visit CO-OP Shared Branches or our Vcom kiosks.”

Self-service may not seem like the personalized service credit unions know and love. But there are benefits to using this alternative for some: “I tell credit unions to let their collections departments know that members can make loan payments by check with Vcom,” says Kramer. “Instead of going into a branch with a late payment and facing all those people, they can do it anonymously at the self-service terminal. There are ways that self-service can actually be great service.”

Convenience doesn’t hurt, either. Locations inside 7-Eleven stores provide friendly round-the-clock access that is easy to use – and soon, easier to find wherever you are.

Hot off the Presses, CardNav Debuts at Bethpage FCU

General / by Senior Manager, Public Relations and Corporate Communications

Hot off the Presses, CardNav Debuts at Bethpage FCUOn October 16, Bethpage Federal Credit Union in Bethpage, N.Y., became the first credit union to launch CardNav by CO-OP – a brand new app that enables members to control their credit and debit card accounts using their mobile devices. News spread quickly throughout the credit union press:

“Growing concerns here regarding the risk of debit card fraud led Bethpage FCU to be the first CU to partner with CO-OP Financial Services and its CardNav app,” wrote W.B. King in the Credit Union Journal on November 3. “After a 60-day trial, members are embracing the solution.”

The Credit Union Times also reported on Bethpage’s launch of CardNav: “We had a successful pilot phase with very positive feedback from our testers, which included about 30 of our credit union employees,” Shanta Sewnarain, assistant vice president, operations and risk at the $5.7 billion Bethpage, said in the CU Times story of October 29. “One tester shared that his usage control was set as ‘my location.’ His location is New York and he received an alert for a transaction in New Jersey. CardNav immediately denied the transaction based on location.”

Sewnarain continued: “Another user told us, ‘I know immediately when and where my card is used. I can block specific transactions and merchants, and place my spending limit on a budget. It is just awesome and I wish we had this a long time ago.’”

Noting that fraud is an ongoing concern for consumers, with interest in “tools such as transaction authorization controls, instantly viewable transactions and text message alerts to help them protect their accounts” on the rise, the CU Journal pointed out likely benefits for Bethpage FCU as well:

“Although we are still in the early stages of the service, we anticipate that the savings will be in the form of reduced fraud losses,” Sewnarain told the CU Journal. “We are currently targeting a specific group of members to determine fraud savings, based on the users of CardNav versus those who are not using it.”

“It is an optional tool for our members, so marketing and member awareness will be key to increased usage, so that both our credit union and our members will benefit from reduced fraud,” Sewnarain continued.

Several industry publications responded to the Bethpage FCU story, including DepositAccounts.com. Along with a link to the CU Times story, the site commented: “It would be great to see more financial organizations offer this capability.  Credit cards generally offer greater protection than debit cards if they are lost, stolen, or used fraudulently.”

To learn more about CardNav by CO-OP, click here.

Schooled on Credit: Are You Capitalizing?

General / by Vice President, Marketing

In case you missed it, credit unions are having a banner year with credit cards. According to Callahan & Associates midyear data, here’s a sampling of statistics on credit union credit cards:  •	16.1 million cards– up 8.1 percent over the previous year. •	$43 billion in balances – an 8.5 percent increase over midyear 2013. •	Cards issued to 16.2 percent of credit union members, a record high. •	National credit card market share of 5.2 percent, up 25 basis points over Q2 2013.  Are you capitalizing on this opportunity?   Updating your skills and knowledge is now more essential than ever. Throughout 2014, CO-OP Financial Services has been sponsoring credit card schools through Callahan & Associates and Ondine Irving’s Card Analysis Solutions. The goal: helping credit unions understand the new challenges and opportunities in this growing market.  Presentations vary between these programs, but among the topics covered this year: tailoring credit programs to fit the current economy, generating profitability to reinvest in the credit union, developing an EMV strategy, balancing risk and reward, and marketing effectively in a competitive space.   Card Analysis Solutions will be presenting one more session in 2014 – November 17-19 in Las Vegas (for details, click here).   And both Callahan and Card Analysis Solutions will be hosting new series to help you gear up your credit program in 2015 – all with CO-OP’s support. As credit continues to flourish in the year to come, intelligence can be your greatest ally.  For more information on full-service and in-house credit processing with CO-OP, click here.In case you missed it, credit unions are having a banner year with credit cards. According to Callahan & Associates midyear data, here’s a sampling of statistics on credit union credit cards:

  • 16.1 million cards– up 8.1 percent over the previous year.
  • $43 billion in balances – an 8.5 percent increase over midyear 2013.
  • Cards issued to 16.2 percent of credit union members, a record high.
  • National credit card market share of 5.2 percent, up 25 basis points over Q2 2013.

Are you capitalizing on this opportunity?

Updating your skills and knowledge is now more essential than ever. Throughout 2014, CO-OP Financial Services has been sponsoring credit card schools through Callahan & Associates and Ondine Irving’s Card Analysis Solutions. The goal: helping credit unions understand the new challenges and opportunities in this growing market.

Presentations vary between these programs, but among the topics covered this year: tailoring credit programs to fit the current economy, generating profitability to reinvest in the credit union, developing an EMV strategy, balancing risk and reward, and marketing effectively in a competitive space.

Card Analysis Solutions will be presenting one more session in 2014 – November 17-19 in Las Vegas (for details, click here).

And both Callahan and Card Analysis Solutions will be hosting new series to help you gear up your credit program in 2015 – all with CO-OP’s support. As credit continues to flourish in the year to come, intelligence can be your greatest ally.

For more information on full-service and in-house credit processing with CO-OP, click here.

Make Your Credit Cards More Usable

General / by Vice President, Credit Issuer Processing

11-04-14_CCMoreUsableYou read a lot these days about new, novel payment methods. But really, it’s hard to beat credit cards at their own game:

  • Credit cards are accepted nearly everywhere.
  • Credit helps cardholders manage cash flow.
  • Cards often provide consumer protection, such as insurance on car rentals or the ability to dispute charges.
  • Cards offer rewards or cash back. 

For all these reasons, credit cards are among the strongest relationship builders a credit union can have. Yet, some consumers are reluctant to apply for or use credit cards. Young members may not have established credit yet. Members may also worry that their cards will be compromised by fraud – or that credit card overuse will result in burdensome debt.

How do you make your credit cards more usable? The easy answer is to remove some of the barriers listed above. Does your credit union offer young members a clear, easy path to credit? Promoting the availability of credit to younger members – and then using that relationship to build credit over the years – is a time-tested credit union strategy. Now may be a good time to re-imagine these programs to appeal specifically to Millennial members.

As in so many areas of financial services, technology may play a role in making your cards more user-friendly. Here are a few to consider:

CardNav by CO-OP: By offering members mobile controls, you empower them to turn cards on and off, set spending and locational limits, receive and respond to transaction alerts, and make their card accounts manageable again.

Tokenization: This security feature ups your game when it comes to virtual transactions. Not only will cardholders feel more secure making online and mobile card purchases, but you’ll also be one step closer to participating in Apple Pay.

EMV: As the industry moves toward EMV adoption in 2015, cardholders will likely be looking for EMV capability as a mark of security for card-present transactions.

Sprig/RealPay: Getting your cards “top of wallet” in the mobile space is an ongoing priority. Offering your members P2P payments via the Sprig by CO-OP mobile wallet makes that possibility more real. But the true game-changer may be RealPay, CO-OP’s soon-to-be-released real-time payments network that will enable real-time, pay-anyone P2P using Sprig. That’s usability that’s unique and on trend.

Merchant-Funded Rewards: Having a rewards program is now a given. But having one that helps you differentiate your cards in the minds of your members is clearly better. CO-OP Member Rewards offers an end-to-end solution that allows credit unions to compete with larger, national programs while providing merchant-funded rewards from local businesses, so your rewards program is uniquely yours. 

Mobile Rewards App: What makes a robust rewards program even more rewarding? Making it accessible by mobile device. As CO-OP prepares to roll out a new mobile rewards app, the emphasis is on making all aspects of your card relationships more useful and engaging.

To learn more about CO-OP’s in-house credit processing and our full-service credit processing in partnership with The Members Group – both of which open the doors to a world of CO-OP technology – click here.

Could Your Rewards Program Be More Rewarding?

General / by Vice President, Marketing

11-03-14_Rewards

Could Your Rewards Program Be More Rewarding?

As much as rewards programs have become table stakes for credit cards, do you ever wonder if your rewards program could be more rewarding?

In the weeks to come, CO-OP will be releasing a mobile app to go along with its CO-OP Member Rewards program. Using the CO-OP Member Rewards mobile app, members can:

  • View account status, statement history and point balances
  • Search for local deals and Shop Main Street merchants
  • Redeem points and use eGift cards in real time from their phones
  • Review program terms and conditions. 

Suddenly, rewards are usable anytime, anywhere. Gone are your members’ frustrations with not knowing how many points they have, not remembering which merchants participate, not being able to convert points to gift cards on the spot, and not having the gift cards handy when they’re ready to pay. Instead, every aspect of your rewards program is synced up and ready to use, wherever your members may be.

A rewards program that is exponentially more rewarding for members is bound to be more rewarding for you – more likely to build loyalty and usage, and more likely to help you stand out from the competition.

Stay tuned for details on the CO-OP Mobile Rewards app. To learn more about CO-OP Credit Processing and CO-OP Rewards, click here.

8 Questions You Asked About CardNav

General / by Vice President, Marketing

10-28-14_CardNavQuestions2In CO-OP’s live webinar on CardNav by CO-OP card controls and alerts on October 22, Senior Product Manager Pat Yarmulnik and Senior Manager, Market Analysis Ryan Zilker fielded questions from the audience.

What did credit unions want to know about CO-OP’s new remote control product for cards? Here are some answers. 

1. Will CardNav settings overrule funds availability and transaction limits settings that have been made in our core system? 

Nothing in CardNav overrides what’s set in the core. CardNav can make a recommendation, but if a user sets a transaction limit of $600 when the host says the limit is $300, the host settings totally override any recommendation by CardNav.

2. How does CardNav affect Falcon Fraud monitoring? 

There really is no change to Falcon. The way the process works is that if Falcon would shut a transaction down for any reason, CardNav controls have no impact. Falcon shuts the transaction down and an alert is sent to the cardholder. It’s only when a transaction passes all those initial checks that CardNav control settings come into play. 

3. Is CardNav limited to cards on our own BINs? 

The BIN must be owned by the credit union and processed by CO-OP. You could not, for instance, load your American Express card into CardNav.

4. Is CardNav only available as a separate app, or can it be integrated into my credit union’s existing app? 

Today, what we are rolling out is a separate app. In the future we will be able to make available a version of CardNav that credit unions can brand as their own app – or as a standalone API that they can make part of their own mobile banking app.

When we consider all of these options, we feel that the dedicated CardNav app offers the best experience for your members right now.

5. Is the CardNav app customizable so that my credit union’s name and logo appear in the App Store? 

When members go to search for the CardNav app in the App Store, it is not branded to your credit union. They simply go and search for CardNav. Once the app is downloaded, from that point on the member sees the colors and logo from their credit union.

If you would like to have an app with your own branding at the App Store level, you would need a customizable app. That will be available, but the program and pricing will be slightly different.

6. How does CardNav integrate with Apple Pay?

We’re currently in discussions with Ondot, our partner on CardNav, to see if there’s any potential there.

7. Does CardNav send email alerts? 

No, and that was a conscious decision on our part. After reviewing the options of having email or SMS text alerts, we felt that in-app alerts were where the market is going.

8. Will CardNav be available to credit unions that do not use CO-OP as their primary debit processor? 

CardNav is available exclusively to credit unions using CO-OP as their debit or in-house credit processor.

To watch a recorded version of “CardNav by CO-OP: Leading the Charge in Card Control,” click here. 

Find out more about CardNav at co-opfs.org/cardnav.