Marketplace Newsletter

In this issue:

From Laura's Desk

LSC Update

Envisant

FIS

SRM

tHRrive HR

CMG Winter Report

CMG Article

CMG Upcoming Webinar

Kentucky Partners

Save The Date

Subscribe to Marketplace


 

From Laura’s Desk 

 With all that comes with closing out a busy work year, it’s easy to get swept up in chaos and lose sight of a thankful heart. This is the time of year to be appreciative for all we have and to reflect on the accomplishments we’ve achieved. 

  At the Kentucky League, our gratitude for your partnership is always top of mind. We realize that “Your Vision is our Purpose”. Many thanks!

 Here’s to wishing you a wonderful Thanksgiving Holiday with family and friends.

 If I can do anything to assist you, please feel free to reach out by sending me an email, [email protected] or calling me at (502) 855-8209.

 Sincerely,

Laura Parrish
VP, Association Services

Your Vision is My Purpose

 


      

LSC is now Envisant!  

The rebrand made its debut with a video announcement during the Illinois Credit Union’s 91st Annual Convention in front of more than 500 people. The new branding illuminates in a clear, distinctive way the mission and value LSC (now Envisant) brings as a service organization to more than 2,000 credit unions across the country.

Envisant starts with ‘envis’-the root of envision, which means ‘the cause to see.’ The suffix ‘-ant’ is ‘one who performs a specific action,’ such as a consultant. Envisant is here to help credit unions see the way forward. With dedication and experience, the Envisant team is able to be an effective consultant by envisioning a successful path and steering credit union partners towards it.

LSC was founded in 1969 to give credit unions the power to compete and prosper. This has come to include a comprehensive suite of credit, debit and prepaid programs combined with incomparable service. While the name has changed, the commitment to service and credit union success never will. This mission stands out in the new tagline, “Achieve your vision.”

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A perfect fit – How prepaid cards simplify the holiday season for members

 September 27, 2021by NAOMI ANDERSONLSC

 As the busy holiday season approaches, flexibility is a required skill for all of us. We tend to appreciate businesses and financial institutions that can be flexible alongside us and make life easier by meeting needs that can change at a moment’s notice. Below are some insights on how prepaid cards can help your credit union enhance its service and meet members’ needs for flexibility through this both joyful and stressful time of year.

While people are planning to spend more on shopping than last year, they are also looking to use their funds wisely as they make discounts and competitive pricing top priority (RetailMeNot). Prepaid cards are an excellent solution for budget-conscious members. With reloadable prepaid cards, members can:

  • Load funds as needed onto reloadable prepaid cards 
  • Shop where they want without worrying about interest rates or accidentally overspending. 
  • Stay on budget

Prepaid gift cards also allow members to easily gauge costs while sharing a popular gift. For credit unions, branded holiday gift cards can even help increase awareness.

A blend of shopping channels will be prevalent this holiday season. A survey by RetailMeNot reveals shopping plans are divided just about evenly between online and in-store. The same survey shows that about 25% of people plan to increase use of in-store and curbside pickup services for online orders. Mobile devices further complicate matters as they rise to almost 60% of online sales (Statista). 

With so many different ways to shop, a secure payment option that works seamlessly across channels makes life easier for your members. That is where tokenization matters. While prepaid cards aren’t connected to members’ bank accounts, tokenization is an important extra level of security. It helps safeguard prepaid card information and the funds loaded on these cards. 

Tokenized prepaid cards can also be added to mobile wallets on digital devices and used from there as both a quick way to pay on the go or even online. This encourages members to keep your credit union’s prepaid card top-of-wallet across payment channels.

Beyond shopping, reloadable prepaid cards with tokenization are great for holiday travel planning. The simple budgeting features work for expense-planning. With tokenization, members can also easily take them along in their mobile wallets while enjoying an added level of security.

Thanks to technology, the features and benefits of financial tools like prepaid cards keep growing to help credit unions meet the changing needs of their members. Whether the need is gift-giving, traveling, budgeting, or finding a way to shop easily across channels, prepaid cards deliver!

Yet, despite the benefits, updates in technology and services can sometimes feel like holiday packages piling up outside our door. Before we can say, “1-hour delivery,” it seems like a new payment channel or service is waiting to be crammed into already tight spaces. LSC is here to help. To learn how our team of prepaid experts can help relieve the burden of offering a prepaid program to your members, contact the LSC sales department at 1-800-942-7124.

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ONGOING GLOBAL CHIP SHORTAGES ARE DISRUPTING PAYMENTS. HERE’S WHY.

 Global chip shortages are already impacting the automobile and electronics industries. See why payments is facing similar issues as shortages continue and take action to protect your members.

 What’s happening?

 Industry experts say that 2022 should be considered the critical chip shortage impact year. We’ve seen how chip shortages have severely impacted the automobile and electronics industries, but industry experts are starting to predict a significant impact for payments as well. Let’s talk about why.

 Semiconductors are also used to create EMV contact-only and contactless chips. The EMV chips are embedded in credit and debit cards with billions of chip-based payment cards delivered globally each year. Chip shortages may affect the supplies of credit and debit cards, making new or replacement cards unavailable. That stands to impact not only consumers, but all businesses dealing with payments transactions across the globe.

 Why now?

 The issue is at the top of the supply chain and has surprised even the experts. While demand was expected to decrease during the pandemic, the reality is that it increased as consumers continued to make purchases and, in some sectors, even increased their buying. A more remote workforce translated into more demand for laptops and other electronic devices, while consumers finding themselves at home also spent more on home improvement, appliances and other domestic needs.

 Alongside the global chip shortage, we’re also seeing extended card manufacturing lead times, with some dates already moving into March 2022. Everything from demand for custom materials to capacity constraints and COVID-related staffing issues are to blame. In addition, increased wages are making the marketplace more competitive, which is also contributing to staffing issues.

 What does this mean for payments now and in the near future? In addition to the basic supply and demand logic, some of the underlying issues include higher tariffs, the logistics of moving product, including staffing for transit and shipping docks, and even drought in regions where wafers, which take a lot of water to produce, are manufactured. Suppliers aren’t able to staff for full production, further impacting the supply chain.

 What should you do?

 That sounds like a lot to worry about, so what should savvy credit unions know to weather the storm? Now is the time to start examining inventory to ensure you have a 12 to 18-month supply. If you’re not already there, start ordering now so there is no interruption in card issuance.

 How can FIS help?

 Forecasts are predicting increasing supply chain issues throughout 2022 and into Q1 2023, which is why we’re working hard to benefit the credit union community that relies on us. With the shifts and changes in the market, 3 ONGOING we know our customers are in jeopardy of running out of cards. We can use our buying power to get supplies and improve shipping for our credit union members.

 Our strategic partnerships mean we’re working directly with chip suppliers to minimize the impact of the shortage. We’re also working to certify and implement additional chip types to help you stay flexible, with a specific focus on contactless cards as the demand for contactless payments continues to rise.

 Don’t hesitate to reach out to your Card Protection client care representative to place your orders now. With demand continuing to rise, rush orders will be limited by capacity and materials, so now is the time to get ahead of the rush. Planning to convert to dual interface cards. Let your rep know now so that we can help secure available inventory.

 What’s next?

 It’s a quick-change market, and as shortages continue to arise, the experts at FIS will be sharing mitigation strategies, best practices and solutions—both immediate and long-term—to support our clients throughout these trying times. If applicable, stay in touch with your FIS reps, and don’t miss our ongoing bulletins for the latest updates and information. As embedded-chip credit and debit cards continue to be vital to daily transactions, working closely with FIS will help you stay as far ahead of the challenges as possible.

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How to Renew a Card Processing Contract

 Posted by: Ben Mrva 

 Every relationship – even long-term ones – needs an occasional tune-up.

Banks and credit unions that want to stay at the top of their game must change with the times, evaluate longstanding agreements with third parties, and incorporate cost savings whenever and wherever they can. Those efforts can free up funds to pursue growth strategies, including adding or expanding digital capabilities.

Periodic reviews can also help financial institutions determine if their providers are meeting the conditions of their contracts. A fresh set of eyes from an outside advisor can help evaluate exceptions, reduce processing fees, and negotiate potential marketing bonuses.

A Case in Point

Great Lakes Credit Union (GLCU) in Bannockburn, Illinois, benefited from such a review. With roughly 79,000 members and $1 billion of assets, GLCU had negotiated nearly a century’s worth of vendor contracts, including a card-processing relationship it had maintained for more than 25 years.

GLCU’s first project with SRM involved renegotiating its contract for debit and credit card processing. Initial talks began when Steven Bugg, the credit union’s president and CEO, was introduced to an SRM representative, who worked to understand the obligations and opportunities in GLCU’s contract.

SRM’s project managers went to work, conducting a top-to-bottom analysis and outlining areas that needed a further review to secure the most benefits.

“We are very pleased with the savings and additional income from the marketing allowance,” Bugg said. “All the work was on time – no delays or concerns. The contract was renegotiated so that it started earlier than the one expiring, giving us a head start on savings.”

The SRM manager also reviewed a secondary network for debit card contracts, uncovering previously unidentified information. It turned out there were potential differences between what was stated in the contract and what was delivered.

The finding prepared GLCU to renew its agreement with terms that would earn the most income. For verification’s sake, SRM reviewed a third agreement and negotiated further for additional savings.

“We may have done the initial leg work, but SRM uncovered funds left on the table,” Bugg said.

“Our team has come to rely on SRM to mediate our vendor relationships,” Bugg added. “Their negotiation skills can be very successful, whether it’s reviewing a new vendor contract or one that’s established and in place. We’ve seen significant, long-term improvements involving both types of agreements.”

The Bottom Line

Is the vendor delivering on their end? How can you be sure?

It’s easy to get complacent with long-term partnerships. Rather than settling into continuous contract renewals or modest adjustments, it makes sense to take time to thoroughly review – and renew – long-term relationships with critical vendors.

A relationship tune-up can uncover key insights that are well worth the time. For more information on this topic, check out the Eight Rules of Engagement for Vendor Negotiation Strategy. Or contact us to discuss your card processing contract.

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The Benefits of an HR Audit

 A periodic HR Audit helps to ensure compliance with ever-changing employment laws and workplace regulations. A well-structured HR Audit not only recognizes strengths and identifies opportunities for improvement in the HR function, but also reveals risk areas and provides recommendations and solutions.

 The benefits of an HR Audit / Needs Assessment are many:

  • Effective utilization of HR processes and programs
  • Compliance with employment practices
  • Due diligence review for shareholders
  • Upholding your credit union’s reputation in the community
  • Objective feedback on the dozen key areas within HR
  • Best practices that attract, inspire, reward, and retain top talent

 Contact tHRive for a complimentary consultation to learn more about this valuable service offered especially for your credit union! Follow tHRive HR, Inc. on LinkedIn… https://www.linkedin.com/company/65465103/admin/ to keep up with HR services, news and updates.

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CMG Winter Report

 The CMG Winter Report is ready for you to review. Thank you to our trusted partner!

 CMG 2021 Winter Report

  

 

Cost Conscious Consumers Moving to Digital Auto Refinancing

 By Amy Nelsestuen, CUNA Mutual Group

The consumer shift to digital, spurred by the pandemic, has often been characterized as meeting a need for speed and convenience. New research reveals that there are more and deeper factors affecting consumer behavior, and in many cases digital experiences are more a means to an end rather than the end goal itself.

COVID’s economic impacts caused consumers to become more cost-conscious, searching for ways to save money. Ability to pay bills and manage cash-flow effectively were among their top financial concerns in 20201. These worries contributed to the consumers’ shifting approach to their auto-buying experience.

Consumers in Charge

While the initial appeal of emerging digital experiences was speed and convenience, financially-impacted consumers discovered a new benefit – control. Auto shoppers could now apply for financing, quickly compare vehicle options, select add-on products in minutes, without the same stress, frustration, and slow pace that often came with a dealer experience.

Along with this new ability to control the process that had traditionally been managed by the salesman, the digital buying journey allowed the consumer to remain anonymous. They felt empowered to make a decision that’s right for them without the social pressure of working with a salesperson.

Rediscovering Refinancing

Similar to digital car buying experiences, the availability of refinancing information has become more transparent and reliable, offering the ability to shop digitally for options, link to educational resources, and quickly reach customer support. As consumers continue seeking ways to save and manage their money, many more are turning to vehicle refinancing and investigating digital options. In 2020, 16% more Americans applied for a vehicle refinancing than in 20192. This trend is significant for credit unions, who captured 69% of all refinances in Q1 of 20203.

This growing segment has different financial motivations including:

Monthly Payment: Consumers who focus on APR

Rewards: Consumers who want to take advantage of perks and loyalty programs offered by refinance programs.

Debt Reduction: Consumers who simply want to get rid of their loan as soon as possible.

Growing Competition

Given consumers’ growing preference to control the process, credit unions should be aware of emerging digital competitors looking to capture some of credit unions’ majority share of the auto refinance market, specifically:

Brokers

They are relatively new to the automotive space, but have been part of other lending verticals, such as mortgage, for quite a while. Automotive brokers essentially let the borrower take a back seat during the purchasing journey and line up all the details that matter most to the buyer before committing to a new loan. Brokers make little margin on refinance loans but often generate revenue from document fees and splits from selling protection products.

 

Refinance brokers have capitalized on the use of “auto refinancing” as a search term, utilizing this search engine data to market refinancing options to interested consumers.

Digital Affiliates

Affiliate websites, such as Credit Karma, myAutoloan.com®, and LendingTree allow consumers to compare rates and see which products are available to them. The affiliates profit by selling that consumer data back to brokers and earning an affiliate marketing fee. With consumers increasingly concerned about their credit score, often checking it monthly, affiliates also profit by selling this personal data and subtly marketing products to these consumers.

Although the desire to lower monthly payments continues to drive this industry, the lack of buyer education and advertising campaigns have kept this market relatively untapped.

Credit Union Auto Refinancing Strategies

Credit unions have typically gained market share when banks and other lenders have tightened their underwriting policies, considering a broader range of credit scores for auto refinancing. They have also focused on consumers looking for used vehicles and have been able to offer better pricing with lower rates than the competition.

Refinancing currently makes up a small percentage of the overall auto finance market. Three factors 1) the emerging cost-conscious, take-control consumer, 2) increasing digital access and 3) continuing low interest rates, are expected to grow the category in coming years.

To address this growth segment, credit unions may want to consider:

  • Marketing to auto buyers within the first two years of their original purchase
  • Focus refinancing messaging on payment savings versus APR reduction
  • Provide members with more control within the digital application:
    • Instead of simply declining an application, offer alternatives the member can consider
    • Automate conversations, allowing the member to ask a question without having to leave the application or wait for someone to help them
    • Pref-fill data to eliminate an often-tedious task

 

Conclusion

Be aware of your members approach to borrowing money. It’s a decision not based primarily on convenience – emotion plays an increasingly significant role, especially as effects of the pandemic continue. The digital process provides control, reduces stress, and makes them feel better about their decision. Strategies that help re- enforce that experience can go a long way to driving a credit union’s lending business.

 

1 CUNA Mutual Group Proprietary Research (CMG Quick Pulse Surveys, 2020). 2 RateGenius’ Annual Study Reveals: 2020 Savings on AutoLoan Refinancing Among Highest on RecordCrowdfund Insider, January 27, 2021. 3 State of Auto Refinance: 2021 Report, RateGenius, January 26, 2021. CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Life, accident, health and annuity insurance products are issued by CMFG Life Insurance Company and MEMBERS Life Insurance Company. Corporate headquarters are located in Madison, Wis.

CORP-3870414.1-1021-1123 © CUNA Mutual Group, 2021 All Rights Reserved

 


 

 

Upcoming Webinars

 To register for any of these webinars, please go to https://www.cunamutual.com/resource-library/webinars

Success Begins with a Plan

12/1/2021 11:00 AM CT

Hit the new year running when MGIC walks you through how to develop a business plan you can execute to increase your success in 2022. We’ll help you to prepare an elevator pitch that showcases your strengths, define and reach your market, turn leads into loans, and track and refine your plan so you can grow your CU’s mortgage loan business.

 REGISTER

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Thank you to our Kentucky partners!

 

 

Tom Cvinar, CEO

[email protected]
https://www.financialstandardsgroup.com/

 

 

Lisa Vincent
Creative Marketing, LLC
CU Marketing Magazine
502-552-9798
[email protected]

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In case you missed it…

RANSOMWARE PREPAREDNESS

Bad actors are constantly trying to inject malware through phishing emails, a vulnerability exploit, or misconfigured networks and systems. It only takes one wrong click to cause extended interruption of operations, reputational harm, and data loss. As a result, ransomware attacks continue to be one of the greatest threats to data security and business operations.

During this webinar, TraceSecurity Information Security Analyst Mitchell Bearry will discuss the threats posed by ransomware and the prescribed best practices and introduce TraceSecurity’s Ransomware Preparedness Assessment. Learn more about how your organization can be better prepared for a ransomware attack.

Link to the recording:

https://vimeo.com/646615104/d7fd435c45

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SAVE THE DATE!

Upcoming Webinars

 

KASASA Webinar

January 2022

Date: TBA

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