In the wake of December's Target breach, credit unions are feeling uneasy. Some have chosen a proactive stance, reissuing cards for all members affected. Others have taken a wait-and-see approach, covering the fraud as it has occurred. Regardless of your risk management strategy, there are tactics you can employ to ensure that a breach of this caliber doesn't catch your members or your organization off guard in the future. What have we learned? What will we prepare for in the future? What will we do differently?
CO-OP Financial Services, in collaboration with the strategic consulting firm of Mitchell Stankovic and Associates (
Top 10 Tips
- Leadership. Create a Guiding Coalition: Member security is of the highest priority. This is an opportunity to demonstrate the importance of security at every level of the organization. Bring your team together and identify key stakeholders in the initiative. Empower them to make a difference by identifying areas of concern or recommending new processes.
- Finance. Manage Risk/Accrue for Fraud: This breach has been expensive. In the future, consider accruing dollars in the budget for this extended member service. Base this line item on your fraud history, membership numbers, cardholders and proactive stance. Similar to an allowance for loan loss, this will make emergency funds available, but you control these dollars and they can be applied directly to the bottom line if deemed unnecessary for the year.
- Technology. Examine Your Strategic Alliances: Debrief with the technology, electronic services, retail delivery and management staff to analyze the overall response and procedures, and follow up with strategic alliance partners/vendors. Determine the effectiveness of your fraud monitoring in regards to reaction time, anticipation of needs and turnaround. Define what needs to be improved in the future and if there is a serious concern about reliability.
- Technology. Engage Compliance: Anticipate the regulator response. Are there regulatory issues you'll have to address or documentation that will be required? Monitor CFPB alerts to ensure that your communication with members reflects its recommendations.
- Operations and Marketing. Communicate: Get employees engaged in the dialogue. Communicate powerfully and often. In a situation such as this, internal communication can be more important than external communication. Many CUs are doing an excellent job of delivering letters, reissuing cards, and extending services to their members. Don't forget to communicate extensively with your branches, call center, business development reps and others. Rely on remote locations to tell you how members are affected in their areas. It doesn't matter how well written your member communications are if your front line cannot articulate this message effectively.
- Operations and Marketing. Use Social Media: Social media is the perfect place to reinforce your member communications. You can post FAQs or lead people directly to your website for more information.
- Operations and Marketing. Cross Sell: Remember cross selling is merely educating your membership on your products and services. Why not educate members on the convenience of mobile banking and online banking? These services will help your members to be aware of their accounts on the go.
- Executive and HR. Document Your Protocol: Most of your data recovery and business resumption plans already contain information on disaster recovery, financial and otherwise. Use the content and procedures you followed with this breach as a template for future issues. Save member communications, cost analysis, and so on, so that in the future, managers immediately know the protocol for dealing with a breach.
- Executive and HR. Engage Human Resources: The Target breach occurred at the worst time for staffing and scheduling. For many, managing a limited staff meant relying on personnel in different departments to help cover. In a crisis situation like this one, don't be afraid to pay overtime for employees who help to reissue, return member communications, and lend a helping hand.
- Executive and HR. Reward the Staff: Reward the people who worked together to make a difference to members and collect stories that help you communicate internally the credit union difference.
Samantha Paxson is Vice President, Marketing, for CO-OP Financial Services, Rancho Cucamonga, Calif. (www.co-opfs.org). She can be reached at Samantha.paxson@co-opfs.org and 800-782-9042, ext. 3450.
