SourceMedia’s Card Forum 2018 taking place this week at the InterContinental Miami wasn’t bereft of buzzwords, as brands, processors, issuers, and the vendors who serve them work to advance their use of analytics and artificial intelligence while beating back bad guys.
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Check out these takeaways from the three-day Florida affair.
About AI: No conference with a tech component is complete nowadays without some fast-paced stage demos (think Finovate), and Card Forum was no exception.
One standout: IMPESA, whose founders showed off Layla, the Costa Rican fintech’s chatbot that uses AI to help credit card issuers and users get things done by voice. The midday Tuesday demonstration included talking into a phone to do things as simple as turning off a card to as complex as managing lists of subscribed charges (items charged every month, like Netflix or the cable bill). It was slick, it was easy, and it’s something that members are going to expect soon from their credit unions.
Millennial Matters: Leveraging loyalty has helped credit unions keep ahead of the overall industry. In a joint presentation, TransUnion consulting vice president Nidhi Verma and chief credit officer Tim Bates from BECU ($18.6B, Tukwila, WA) shared research that showed the edge now held by cooperatives.
Here’s a striking finding. Thirty-three percent of credit union credit card originations in 2017 were among people ages 18-29 and another 19% were among 30- to 39-year-olds. In 2012, those numbers were 19% and 22%, respectively. For big banks, the 2017 figures in those two age groups were 20% each. For regional banks, it was 12% for the younger cohort and 17% for the 30-39 crowd.
Across all ages, credit unions have higher credit lines, utilization, and average balances than national and regional banks across the risk tiers, and their members improve scores faster, the joint BECU-TransUnion study showed. In fact, outstanding balances at credit unions have grown by 8.4% a year in the past five years, compared with 3.8% for the industry.
A mature portfolio and that loyalty thing again seem to be helping credit unions outperform other card issuers across the credit score tiers when it comes to delinquencies, too, the study showed.
Feeling Secure: Maybe don’t. Besides pressures from bank and non-bank competitors, especially when it comes to fintech, credit unions also are attracting a lot of attention from a diverse array of crooks.
Just ask Tammy Behnke, credit union program executive for ProSight Specialty Insurance, a major provider of insurance for credit unions through Allied Solutions. According to Behnke, her credit union clients have seen a dramatic reduction in card-present losses since the widespread adoption of chip-enabled EMV cards; however, overall debit and credit card losses are soaring.
The culprits are many and so are their methods. Card-not-present fraud in its many forms remains rampant, and skimmers remain a big problem, Behnke said, especially at gas stations and isolated ATMs located away from the watchful eyes, human and otherwise, at the branch.
Meanwhile, breaches continue to add to the problems of account takeovers and counterfeit cards and time to learn a new term synthetic identify theft. A synthetic ID is one created by a combination of real and fake information or sometimes all fake, for that matter.
Then there’s staid old ACH. The opening of additional settlement windows has opened the door for crooks to exploit the faster movement of money and the gullibility of some credit unions that credit accounts before verifying the funds have arrived.
It’s like whack-a-mole out there, Behnke said.