Regardless of the industry, cybersecurity is becoming more important with each passing day. More and more enticing information is being stored digitally and shared via the Internet. Malicious attacks are increasingly covert and advanced. Deviant hackers are constantly innovating new schemes, making data breaches more common and potentially disastrous.
For financial institutions such as credit unions, the risks and potential ramifications of data breaches are more serious than in any other industry. Here are three reasons why cybersecurity should be top of mind for credit unions:
A National Association of Federal Credit Union survey in 2015 unearthed a handful of alarming cybersecurity statistics, including:
Costly data breaches such as the incidents at Target and at Home Depot not only grab headlines, but show that cybersecurity challenges are not going away anytime soon. The Wendy’s breach earlier this year seems to have hit credit unions particularly hard.
President Barack Obama and his administration have noticed, too. Obama’s recent Cybersecurity National Action Plan calls for a 35 percent increase in planned federal cybersecurity spending.
Considering the clear financial ramifications of data breaches, the National Credit Union Administration’s focus on strengthening its cybersecurity examinations makes perfect sense. But that realization alone doesn’t make the work that lies ahead for credit unions any easier.
The modern-day credit union needs to be prepared for questions about everything from electronic banking to information security programs and website compliance.
Credit unions can get ahead of the curve on these exams by benefiting from the NCUA’s hub of cybersecurity resources. Helpful tools include:
As the costs associated with high-end security technologies continue to soar, as does the need for information protection, the pressure mounts on credit union executives and managers to keep their networks cost-effective.
For example, a credit union with next-generation firewall technology can identify advanced malware and other malicious threats before they enter the network — adding a protective layer to the east-west data traffic that moves between machines and devices within a network. This is vital because 75 percent of all traffic in a typical network is of the east-west variety.
Unfortunately, next-gen firewalls with north-south (traffic that leaves and/or enters your network) and east-west capabilities typically require a minimum investment of $50K for software and hardware.
However, with innovative use of available security resources, credit union managers are finding ways to solidify security well within the scope of their budget. Solutions such as CUProdigy, a CUSO, that blend traditional network architecture with forward-thinking cloud platforms are making next-generation security much more attainable throughout the industry.
The credit union industry is constantly transforming and growing. These 10 recent statistics will change the way you look at this dynamic industry.
In March 2009, there were 7,909 credit unions in the US. Four years later, there were 6,895. Many credit unions are consolidating or offering a wider range of services to more customers.
Credit union membership grew by 3.5% during the year 2015 alone. This is the highest rate of growth posted since 1994. More people around the country are choosing credit unions for their financial needs.
The efficiency ratio shows how much it costs the average credit union to produce one dollar of revenue. After a period where this ratio stood at or above 100%, costing credit unions at least a dollar for each dollar generated, it has now dropped to around a steady 77%.
Over the past decade, the breakdown of total income generated by credit unions has changed considerably. Fees and similar sources of operating income continue to grow in importance, with a current all-time high of 28.8%.
Credit union loans increased by more than 10% from September 2014 through September 2015, making this one of the fastest-growing periods for loans in credit union history.
The strongest gain for credit union loans in 2015 was in the area of new auto lending, with a 4.1% increase in balances. Used auto lending was nearly as popular, with an increase of 4%.
The current net long-term asset ratio of credit unions is 32.5%, a considerable drop from the high point of 36.0% seen several years ago. This ratio shows credit unions to be in a good position to handle Federal Reserve rate increases in the future.
The aggregate capital ratio of credit unions is up to a healthy 11.0%, making them “well capitalized” by the standards of regulators.
Savings growth is also up, with a long-term rising trend toward the September 2015 level of 10.7%.
Borrower bankruptcies have stabilized at a low level of 1.6 per 1000 members during the third quarter of 2015, after a high in 2010 of 3.7 per 1000 members. Credit union borrowers are more financially stable than ever before.
How will you respond to these statistics in your own workplace? Knowing about the latest trends in the industry can help you do business in an intelligent way.
The beginning of a new year is a perfect time to look at the way your credit union does business. By keeping these seven basic resolutions in 2016, your credit union can offer great service to your customers and maintain an ideal working environment for your staff.
With disaster recovery, it’s not a matter of “if”—it’s a matter of “when.” Sooner or later, important data will be impacted by hackers, a natural disaster or plain old user error. Thinking about it now means less panic when it happens. Have a robust, multi-layered plan in place so you can return to business as usual with a minimum of disruptions.
The current economic situation might have left you with a tight budget for 2016. Think about what you can cut without compromising efficiency or data security.
Whether you’re a small local credit union or a large one, good communication is the key to making things run smoothly. During 2016, make a resolution to communicate clearly at all levels of the organization. Clear communication can happen face-to-face in meetings or by other methods, but it needs to happen.
More and more customers are doing their banking on mobile devices, such as smartphones and tablets. If your credit union hasn’t already optimized the user interface to make it just as convenient for small screens as it is for desktop computers, now is the time to make that change.
Cloud-based business solutions can help you run your credit union more smoothly and safely. By moving important functions from office-based physical infrastructure into the cloud, you can enjoy better security, increased efficiency and reduced IT costs.
Especially when you’re going through a big change such as a core conversion, it’s crucial to talk with your staff at each stage of the process. Let them know what’s going on with your credit union and answer their questions honestly.
Your customers may have questions about mobile banking, home banking, bill pay or other aspects of their user experience. Take the time to listen to them and respond to their questions. Consider using live online chat or other methods to encourage communication with customers. Live chat can take some of the pressure off the phone lines.
By taking the time to make smart plans about budgeting, communication, customer service and technology, you can make 2016 more successful than ever.
Nobody wants to think about problems, let alone disasters of any type, and especially those that can wipe out data or crash large-scale computer systems. Yet, focusing on these realities is exactly what credit unions must do. Whether initiated by natural disasters, hackers or user error, IT problems can, do and will happen.
For a credit union, initial disaster itself is only part of the problem. Without a strong IT disaster recovery plan in place, even greater disasters can result. Such a plan should be considered essential to keeping members happy, mitigating risk and even staying in business. Following are some of the benefits to a credit union of developing a disaster recovery plan.
Probably one of the most important things for a member or customer of any financial institution is access to their banking information, anytime, anywhere, all the time. Consumers today want and expect to be able to view and manage their financial data on a true 24/7, 365-day basis, even in the face of a disaster.
Along with continuous access to data, members want and need to know that their information is secure. Credit unions cannot always prevent problems from happening, but they can very much control how they respond to problems. The lack of a ready-to-go-at-anytime plan puts member data at risk of loss and puts credit unions at risk of loss of members.
Credit unions can face serious repercussions from regulatory entities if they do not appropriately guard sensitive and private member information. A disaster recovery plan is not only an essential way of complying with regulations, but also of exceeding those regulations and mitigating risk.
The process of developing a disaster recovery plan yields detailed data about a credit union’s IT infrastructure and processes. Armed with this information, financial institutions can often identify areas in which they can streamline workflow and save money. Moving from physical servers to a cloud-based infrastructure is one decision that can result from seeing the full scope of a network via the disaster plan.
The complete itemization of every element of a credit union’s IT operations can help during a disaster and at other times as well. Employee theft can be prevented more effectively, for example, because an institution will be able to track every item’s existence and location at all times.
Much work is needed in order to set up a full-scale IT disaster recovery plan for a credit union. However, the payoffs are more than worth the investment.
Technology is constantly changing before our eyes—even missing a few weeks of tech news could contain the latest info on the development of flying cars, or a sneak peek of Sony’s new gaming console. We’re in a similar situation with the software running on our desktops, phones, and tablets; they are constantly changing.
Update notifications are all around us, but why? In most cases, the changes are just improvements to existing features. However, sometimes updates fix major problems and bugs, and they’re implemented to improve the stability and security of the application or program, which makes you think twice about ignoring the notifications.
Credit unions experience these updates to their core software on a regular basis; however, if a credit union is using old core software, these “updates” can be a real pain. Updates require users to download and install the changes, which takes time. It’s also standard procedure to manually check for updates, which is cumbersome in and of itself. In addition, software updates take up space on the server, and if users fail to install, their credit union will suffer.
Ignoring updates may prevent customer data from remaining secure or reliable. The older the software, typically the less developers are interested in upkeep and maintenance. The original developers may not even be working on the software anymore to develop necessary security patches that keep cores safe. Given the sensitivity of the data stored in credit unions’ core software, data can’t afford to be compromised.
Another problem with running old core software is that credit unions may run into compatibility issues with newer technology. As credit unions continue to invest in more recent technology, they may find that an out-of-date core creates compatibility concerns as systems don’t match up.
For those in the credit union industry, efficiency is key. Utilizing old core software means that features and functionality won’t be as proficient as they could be—ultimately hurting productivity.
New software tends to offer users more options and more opportunities to customize to meet their specific needs. Older cores remain less flexible, meaning that the user interface isn’t as navigable or effective.
Inadequate Disaster Recovery
Without a plan in place, credit unions with old core software may find themselves in a real predicament when disaster strikes or their server crashes. Where will data be stored and will there be any potential data loss? How long will it take before data can be accessed? If the answers to these questions are: yes, there may be data loss, and it may take longer than even a few hours to access, credit unions can expect to have some very frustrated members.
Poor (or No) Customer Service
A solid support staff is key to any great business—software shouldn’t be any different. Old cores may have a limited customer service staff to rely on, or even worse, none at all. So where do credit unions turn for technical assistance? Old developers? In-house IT staff?
At the end of the day, an out-of-date core at your CU prevents you from providing an efficient tool to employees and offering a secure product to members. Having current core software is the bottom line—and it’s vital to the bottom line of your credit union. Not only is your data more secure and reliable with a current core, but credit union employees will be more productive and efficient with core software that runs smoothly. This ultimately translates into great service and improved member satisfaction, which is what it’s all about.
You know those times when you’re working on something real important? Your eyes are glued to that computer screen and your fingers are furiously clicking away at your keyboard as that ominous deadline approaches. It mocks your desperate plea for more time as it creeps up with undeterred determination. Then it happens.
The blue screen of death appears. You know what we’re talking about—your computer just froze and you haven’t saved in hours.
You pray that with a restart, a recovered document will appear. But what if doesn’t? Back to square one.
Yet, what if getting back to square one isn’t quite that simple? The same hopelessness can be felt among credit unions without an adequate disaster recovery plan, except they’ll have a lot of frustrated members to deal with, not just self wallowing because they didn’t hit save.
This could have been the case for Pocatello Teachers Federal Credit Union (now ISU Credit Union). This $17M CU started a June day just like any other—then their core software server stopped working unexpectedly and all access to the system ceased.
With the CU manager at lunch, the rest of the staff started gearing up to deal with the most pressing issues—hand-writing receipts and dealing with members who were understandably less than happy with the situation.
When staff reached Credit Union CEO, Melanie DeLashmutt, on her lunch break, her initial concerns centered on the potential loss of data and accommodating potentially irritated members. Turning to her data processor for help, she immediately called us.
DeLashmutt asked for our assistance with the situation. With a little diagnosis from our support team, it became clear that the server was the problem. CUDP then contacted the manufacturer, and although the system was under warrantee support, the manufacturer indicated that it still might take several days to diagnose and resolve the problem.
Unlike a frozen computer, how do you deal with the potential loss of an entire credit union’s data? What’s more, how do you deal with the challenge of putting a credit union’s business on hold for two to three days? Well, you turn to your disaster recovery plan and hope that the time, effort and money you put into it will now pay dividends.
Fortunately for Pocatello Teachers FCU, CUDP offers, as an available support feature, one of the very best disaster recovery systems in the industry for a very nominal cost. Even though Pocatello Teachers FCU operates an ‘in-house’ deployment of CUDP’s processing system, CUDP replicates all of their credit union’s data to two additional off-site locations, in real time. Once CUDP had been made aware of the situation, they quickly invoked the disaster recovery plan and setup an access to the replicated data at one of the off-site locations. Within 45 minutes of receiving the call, CUDP had established a secure connection for Pocatello Teachers to their replicated data and the credit union was back to business as normal without losing any transactions.
In retrospect, CEO Melanie DeLashmutt, stated “When our server crashed, I feared the worst—lost data, angry and frustrated members, irritated employees, etc. But CUDP had us up and running in less than an hour—with absolutely no data loss. It was really quite amazing!” DeLashmutt went on to add that in all her years in the credit union industry, she had never experienced anything like it.
Hit the save button for your credit union—invest in a comprehensive disaster recovery solution.
Late 2012 brought Hurricane Sandy to the shores of the east coast. This catastrophe made a huge impact on the New York area, causing people to lose power for days. Another consequence of this outage was the effect on the credit union branches in the area. Many members lost access to their accounts, and more than 14,000 did not get their usual paycheck deposits in time to pay bills. Truth is, these disasters can strike anytime, which is why it’s vital to be prepared.
Robert McGarvey of the Credit Union Times stated shortly after Hurricane Sandy that “every credit union needs a disaster recovery plan.” We couldn’t agree more, which is why disaster recovery is something that has been our focus from the very beginning. When we started developing our latest core processing software, we did it with the mindset that disasters are always an unexpected event, so the only way to be fully prepared is with an adequate disaster recovery system.
We knew that a DR system needed to be reliable, yet realistic in the face of disaster. Our CUProdigy system provides access to CU information within 45 minutes from any computer that can get an Internet connection. Once connected, every keystroke is replicated in five locations in real time. Between these backup sites, at least one location is more than 100 miles from the credit union, ensuring the safety and protection of your information.
To us, providing this type of reliability and dependability in a core solution is the only way to protect your credit union from those unexpected events. In the event that your credit union is disrupted, you and your members can rest assure as they can continue to make transfers, receive direct deposit, or make a change to their account. Since all of our backups are accessed through the browser, setting up a temporary teller station at a secure location is quick and easy. This type of security is what builds trust to members.
We are all familiar with the phrase, “You get what you pay for.” In other words, the more you pay for something, the better the quality should be. But is it true?
The answer to that question is typically, yes. However, are there some situations where you can get a lot, for less than you thought? If you answered no, then please read on.
When it comes to purchasing a core platform for a credit union, the expenses are always going to be of concern. Not only does the solution need to be purchased, but the hardware (servers, work stations, etc.) requirements can sometimes be as much as the software.
At CUDP we set out to change this. We built our CUProdigy core solution from the ground up with the credit unions in mind, and here’s how:
So, let me ask the question again: are there some situations where you can get a lot for paying less? The answer is yes. Our core solution is here to reduce your costs while still providing a high quality product that provides all of the functionality you need at your credit union. How’s that for a good deal?
Websites and mobile apps all around us continue to try and give us everything at our fingertips in the form of a “dashboard.” Developers know that we continue to strive for easier ways to do things with less clicks, so they continue to give us what we want. Our smartphones are a perfect product of this and they are predicted to pass up the human population by the end of this year! Smartphones continue to make it easier to do practically everything from a single device, without the need of a computer.
Why can’t we have something similar in the credit union industry that makes things like account information more accessible in one place? Member Screens do just that—give you everything (and more!) that you need to manage a member’s account information from one convenient place. Photo or ID verification is available immediately from the Member Screen, allowing for quick confirmation of the member’s identity. A full history is also available for the selected member with images of recent checks and receipts.
From the same Member Screen you can also perform multiple transactions, rather than having to jump to a different screen. With how much we all use the Internet, it’s always a welcomed addition when a site can migrate pages of information into one place. Less clicks and more information in one place is what we want! Instant access to create new accounts from the Member Screens is an additional bonus—again cutting down on the amount of clicks.
Like the rest of our credit union system, the Member Screens are completely customizable. Custom fields and account types can be created to fit your credit union’s solutions preference. The Member Screens can also be customized with a theme that represents your credit union’s colors and brand! This customizability allows you to make our cutting-edge software match your credit union’s technology needs.
This full set of features provides us with an all-in-one Member Screen that simplifies the process of managing a member’s account. With all of this at your fingertips it’s obvious that Member Screen is the next best invention in your credit union system.
Nowadays we’re all about SPEED! We all want to have the fastest car, fastest pizza delivery guy, and of course, the fastest technology. However, technology is where the lines blur, and sometimes we feel like speed is a need rather than a want.
We feel like we need the newest processor in our computers, tablets and now our cell phones as we eagerly await 5G data speed. While browsing the Internet we have adopted the same expectation. Will it ever stop? Moore’s Law states that the number of transistors in computers processors will double every two years. Moore’s Law has been correct as we continue to want and expect speed everywhere we go, but all of this comes at a price as this kind of rapidly processing technology requires an even bigger tunnel to pass data. (more…)
CUProdigy is in the unique position to help Credit Unions ‘Advance Beyond’ by providing a core processing platform that puts the member experience first. CUProdigy empowers credit unions with a comprehensive solution that is both robust and scalable.