From a credit union's perspective, credit and debit card products can often seem like different animals, driven by separate back-end systems, with unique attributes and functionality.

From a member's viewpoint, they are woven together within the fabric of a greater financial picture. In fact, members view payments on a continuum, utilize debit and credit cards interchangeably, and expect swift, easy access to accounts and data anytime, anywhere.

Advancements in fintech are making this type of consumer experience possible. Here are at least three trends we see demanded by members, and essential for credit unions to meet.

The Perfect Digital Payment: Speedy and Seamless

For modern consumers, a fast payment processes “at the speed of mobile.”

With so much happening in mobile payments, it can be hard to determine how to proceed. As a start, every credit union should offer Apple, Samsung and Android Pay. While consumer use of digital wallets has yet to reach critical mass, many of your members are giving them a try. And research shows that once consumers load a default card into an app, more than 70% rarely change that card out. Getting into this market is an important step in securing “top of phone” status.

The same goes for mobile P2P apps. The popularity of Venmo speaks volumes about the future potential of this market. With so many major players both within and outside our industry offering P2P payments, this is a market in flux.

For credit unions, important new technology is emerging in this space. Early Warning's Zelle digital payments network promises to level the P2P playing field by seamlessly connecting virtually every bank and credit union account in the U.S., which, in turn, will allow consumers to send funds to just about anyone nationwide.

And, unlike Venmo, Zelle transfers process in real time, giving consumers the instant gratification they value – and expect. Integration with Zelle should be on every credit union's product roadmap.

Security: Critical to Cardholder Confidence

The importance of cardholder security cannot be overstated – and it is a true pain point in our field that fraud mitigation tools have not kept pace with the relentless advance of fraud. Members are rightly alarmed by breaches. The knee-jerk reaction has been to make card security so tight that today “false positives” (legitimate transactions wrongly blocked) far outrun real acts of fraud, leading to even more member frustration and, of course, millions of dollars of interchange lost.

Help is on the way in the form of machine learning, a key component of artificial intelligence that allows machines to automatically learn from data and adapt. Once available only to governmental organizations or the largest corporations, AI is becoming “democratized,” and attainable for the needs of credit unions.

Specifically from CO-OP Financial Services, machine learning will be put to work on behalf of credit unions in the fight against fraud in 2017.

For card payments, machine learning will be used to augment existing neural network-based fraud detection systems. These AI tools can precisely identify suspicious patterns and vulnerabilities across cardholder transactions, stop attacks in real time, reduce the incidence of false positives, and incorporate data into strengthening the transaction scoring model going forward.

We also recommend empowering your member in their own defense against fraud, by providing card controls and alerts applications that will help them better manage their cards.

Personalization: The Path to Engagement and Loyalty

A truly engaging payments experience is one that is as personalized as it is productive. Your members are bombarded with new card offers. Make it easy for them to stick with you, by making sure their cards are personally relevant to them and the community they live in.

Analytics tools can help you customize your card products, rewards programs and marketing messages by enabling a greater understanding of the member data at your disposal.

There is a truly exciting future just ahead for analytics, enabling credit unions to use these tools to predict member behavior better than ever before. Once again, the key is machine learning, which will give added power to mine and analyze data and give you even more insights into cardholder behaviors and values. Machine learning is also positioned to be put at the disposal of credit union call centers, to improve the customer experience for your cardholders.

CO-OP Financial Services and TMG Join Forces

To help credit unions deliver payments that are fast, seamless, secure and personalized, CO-OP has acquired long-term strategic partner TMG, the industry leader in full-service credit processing. The combined forces of CO-OP and TMG provide credit unions with a comprehensive, single ecosystem that will serve them well across the payments spectrum, bringing an integrated experience for all as the industry continues to grow and evolve.

This is a pivotal step forward on our own transformation journey, and we are meeting today's debit and credit trends with anticipation and optimism.

Todd Clark is President/CEO for CO-OP Financial Services. He can be reached at 909-948-2500.

Instant Insights /

Top-of-Wallet Strategies: A Member-Centric Approach to Debit and Credit

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