To the delight of some, and the dismay of others, technology touches every part of the credit union. To turn a blind eye is to invite chaos in a cooperative world.
Iowa-based CUSO TMG tracks a range of trends in the evolving world of payments and shared the latest technology trends via a webinar last week. Here are the highlights readers of CreditUnions.com won't want to miss.
No. 1: Blockchain Vs. Bitcoin
There’s a lot of buzz around bitcoin, and for good reason. Better known as digital currency, bitcoin is an application that runs on top of blockchain. At its essence, blockchain is a database that keeps track of those transactions.
Many industries, such as the music business, are looking at blockchain as a means of auditing goods and services that are exchanged. Toyota, as well as the diamond industry, are using this to track ownership, transfers, etc. It’s also growing popularity in the financial services industry as a means of currency transfer.
No. 2: Double Breaches
Discovering a breach is bad enough, but now a wave of double-whammies is hitting major companies. For example, Wendy’s has been attacked twice since early 2016. The fast food giant thought the issue was resolved but then experienced a second wave of comprises due to malware.
Financial institutions shouldn’t assume everything has been resolved after the first major sweep. Where’s there one bug, there might be a handful of others that follow.
No. 3: Open Banking APIs
A payment service directive was announced in Europe a while back and was recently updated to cover access to account information while reducing barriers to entry for new players. Seems great for rising fintech firms but not so much for established financial institutions.
Big question: Will it happen in the United States? Back in 2004, FIs in the U.S. attempted to standardize around a common dataset. The consensus now is it’s too early to tell with the new administration, and the country is not necessarily heading down that path any time soon.
No. 4: Global Impact Of EMV
Fraud trends have increased year-over-year. Despite the investment that has been made in EMV, it is not a silver bullet. However, there will continue to be a rise in counterfeit fraud until merchants fully adopt EMV.
The big difference now is that liability is shifting in the favor of financial institutions that have already made the switch. For example, merchants who moved to EMV have reported a 35% decrease in fraud. It’s a great case to switch for those on the fence.
No. 5: Breach Update
TMG experts on the line noted a wave of hotel breaches. Targets included Holiday Inn, Hilton, Hyatt, Trump, and Starwood properties. The thought process behind these attacks is that travelers are in vacation mode, which may prompt bad actors to target their destinations spots. All the more reason to help members stay vigilant when traveling locally or abroad.
Meanwhile, the Yahoo breach was also unique in that it compromised the largest amount of personally identified information in history including birthdates and security questions. The timing of the Yahoo breach was quite alarming for investors, too, since it happened during negotiations with Verizon. In the cooperative space, this implication could make or break mergers on the horizon.
No. 6: Mobile Holiday
E-commerce comprised roughly 21% of holidays sales in 2016, compared with 15% a year prior. More than 71% of Amazon's sales this past holiday season came from mobile traffic. This sector will likely only grow more with time.
Never understate reward options, and the Amazon credit card is no exception. Its 5% cash-back feature is a huge advantage that almost negates a pesky sales tax for some state residents. To stay competitive, credit unions should follow suit and revisit their reward programs.
No. 7: Consumer Electronics Show
The biggest topic at this year’s Consumer Electronics Show was the internet of things. Clearly, connecting cars, refrigerators, etc. to the internet has major implications. So, how do credit unions secure the internet of things for members who demand it?
Visa and Honda offer guidance. Together, they debuted an app that allows users to pay for parking automatically, which eliminates the hassle of manually reloading money into the meter. Another example is Carnival, which provides cruisegoers the flexibility to use their wristband to do several actions like entering their cabin, making payments, and signing up for activities.
On a global scale, this is a tall order since there’s a massive amount of variability across industries. The prize goes to the clever technology experts that can connect the dots and make integration as seamless as possible.