Credit unions are selling safety to their online members by using new multi-factor authentication tools to promote Internet banking.
Although the Federal Financial Institutions Examination Council and NCUA are requiring financial institutions to protect high-risk, online transactions using layered security, multi-factor authentication or other controls by the end of the year, some credit unions are taking the mandate as an opportunity to sing the praises of safe homebanking.
In fact, Pennsylvania State Employees Credit Union (PSECU) here is not only selling security to members-the $2.4-billion CU is guaranteeing it.
Security is a "big selling point" at PSECU's new homebanking site, launched in July and secured by two-factor authentication, said Kevin Doyle, information security manager at PSECU.
"One of the features of our new homebanking version is a security guarantee," Doyle continued. "We're pledging to reimburse funds to members if our systems are hacked, and their data is compromised. We hope the guarantee will increase usage and make members feel safe.
"Basically, we're using our two-factor authentication solution to promote our homebanking service," he said.
Andrew Voorhies, technology operations manager at $727-million Stanford Federal Credit Union in Palo Alto, Calif., added that members may be more willing to bank online in view of the credit union's authentication tool.
"Although strong authentication is a fiduciary responsibility first, we can use the tool to say that we have members' security interests in mind and to sell the Internet banking service," he said.
Credit unions are wise to make the most of layered authentication in marketing campaigns and to educate members about online security features, agreed Tripp Johnson, a senior director at Scottsdale, Ariz.-based Cornerstone Advisors.
"Credit unions can look at authentication as a positive or as just another regulatory burden," he said. "Those who treat it as a positive will see adoption creep up."
At the same time, Johnson urged credit unions to exercise caution when promoting authentication:
"When you advertise layered authentication, be careful," he said. "Members might wonder how safe your homebanking site was before you implemented the security."
As news of data breaches continues to hit the mainstream press, and Congress debates several proposals that would require businesses to notify consumers after data breaches, more and more consumers expect credit unions to step forward with strong security, asserted Chuck Bruen, CEO at $595-million First Entertainment Credit Union in Hollywood, Calif.
"Members are becoming more aware of security considerations, and online security is an area where credit unions could distinguish themselves-or get left behind," Bruen said.
Technology Credit Union in San Jose, Calif., confirmed that members are looking for safe sites.
"Our membership has high expectations that we'll be ahead of the curve in providing online account security," said Kathy Litman, vice president, marketing, at the $1.2-billion credit union.
"We've positioned the authentication solution as a huge security enhancement to protect member information," she explained. "Quite a few members have told us that they're glad we're on the ball."
In an attempt to be "repetitive and redundant," Tech CU promoted the authentication solution in the credit union's newsletter, account statements, brochures, telephone "on-hold" messages, e-mail messages and a website "splash" page, said Litman.
CUJ Resources
For info on this story:
* Pennsylvania State ECU www.psecu.com
* First Entertainment CU www.firstent.org
* Stanford FCU, www.sfcu.org
* Technology CU www.techcu.com
* Cornerstone Advisors www.crnrstone.com
