X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

<p>CU Times Editor WASHINGTON – BITS isn’t just for banks anymore, and credit unions better keep an eye on this financial tech group. Once known as “Bank Industry Technology Secretariat”, the organization changed its name to simply BITS to reflect that it isn’t just for banks, and it’s not a political entity, said Stan Hollen, the former president/CEO of The Golden 1 CU, who is the CUNA CU rep on the BITS Advisory Council. CUNA joined BITS a few years ago, as have a number of core processors in the CU space. BITS was formed for The Financial Services Roundtable (basically made up of the very largest of financial services companies in the country) to be a sort of braintrust for e-commerce. It has certainly evolved and is taking on some technology issues that are going to be critical for CUs going forward, said Hollen. Hollen recently attended a BITS Advisory Council meeting in Washington, and he said this group is on to some eye-opening stuff. “There’s a huge amount of things going on with BITS. As credit unions we need to be up to speed, because a lot of this work can wind up as standards credit unions will be following,” said Hollen. He said BITS has an initiative underway to look at establishing aggregation standards, essentially trying to move away from screen scraping to data transfers. Another issue is authentication. “They want standards insuring that electronically you’re dealing with who you think you’re dealing with,” said Hollen. One topic near and dear to Hollen is also on BITS’ plate, and is something Hollen said the average CU probably never thinks about – business method patents. The Golden 1 CU is one of the few CUs to ever be granted a patent. It received one for an indirect lending procedure it created. “There’s a large concern among large financial and banking providers and some of the large data processors about someone coming in and being granted a business method patent for things we may be doing but take for granted. They could hold out that patent as a gateway or barrier,” said Hollen. Hollen said there are more business method patents being granted now than ever before, as opposed to specific product patents which are more clear cut in dispute situations. The tragedy of Sept. 11 also came up at the meeting in the sense that the financial industry needs thorough crisis management policies and plans. “A really huge bank clears for many, many institutions. So it’s critical for all of us that they have back-up. Since 9/11 there’s more concern on how these critical systems are backed up,” he said. One BITS’ initiative that is always a hot-button in the CU tech space is outsourcing. Credit unions historically have outsourced more of their tech functions than banks. Hollen said BITS is looking out the risks outsourcing can have on financials, and looking at the vendor relationships, and what vendors need to have in place on their end to avoid mishaps. A sensitive issue BITS is looking at involves the ability for financials to share information on terminated employees who may have attempted to defraud the institution. “It makes sense, but there are a lot of legalities. You have to be careful with employment laws,” said Hollen. Other areas BITS is tackling include electronic signatures, and the role of insurance in e-commerce. BITS has an annual budget of about $5.5 million this year. It’s funded by dues. CUNA is an associational member of BITS. [email protected]</p>

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

 

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.