The Year Ahead
From mobile penetration pain points to digital-first platforms, credit union technology insiders are looking at 2017 much like they looked at 2016: focusing on security, integration and intelligent use of data. With NCUA’s recent changes to its field of membership and member business lending rules, however, there are plenty of new opportunities for CUs in the year ahead – provided they have the right technology. Credit Union Journal asked tech insiders for their predictions on how technology might play a role in the coming year. Here are their responses.
1 Billion Records Breached in 2017?
According to Kalle Marsal, chief marketing officer at Mitek, security issues should be a front and center concern for all credit unions in 2017. The San Diego, Calif.-based firm specializes in mobile capture and identity verification software solutions.

“We anticipate that more than one billion consumer records will be breached in 2017,” said Marsal. He referenced the September Yahoo breach announcement. The company conceded that personal information of at least 500 million users was stolen in a 2014 attack. “Systems that rely on personally identifiable information are increasingly vulnerable.”

Mobile Devices for Mortgage Apps and More
Marsal noted that credit unions also continue to have a significant opportunity with millennials and home loans – provided CUs can provide the right tech solutions for that demographic, which has a “strong desire” to apply for mortgages via mobile.Mitek predicts that millennials will originate more than $30 billion worth of mortgage applications through the mobile channel in 2017. The way they want to approach financial transactions, however, is not conventional. In late 2016, Mitek completed a survey of millennial consumer behaviors. More than 50% of respondents said they would like to approve purchases via a selfie on their smart phone opposed to a traditional password. “We have seen the success MasterCard has had with selfie pay and they will be rolling it out to 40 countries,” said Marsal. “There is an enormous unmet demand among millennials for using selfies in mobile commerce. We predict that more than $3 billion mobile commerce transactions in 2017 will incorporate selfies for authorization or authentication.”
Big Data and Fraud Detection
At Northwest Community CU in Eugene, Ore., CEO John Iglesias said his credit union will look to make better use of big data and fraud prevention tools in the new year.

"Not only do we want a greater degree of integration between our different financial platforms and products, we want to gain the advantage that analysis of data these platforms provides and do this securely," he said.

In 2016, Northwest Community CU took proactive security measures by implementing an in-house behavioral algorithm to "fine tune" its fraud detection.

"We use technology to apply pattern matching in a broad scope, highlighting the behaviors that most frequently surface in fraud," said Iglesias. "This in turn helps us on the innovation side of advancing our protective capabilities in all areas of service and prevention is the ultimate efficiency."

NW Community will also be putting infrastructure measures in place at its facilities to improve service and functionality.

"In 2017, we will be rolling out a new fiber-based network throughout the enterprise. This fiber network will greatly increase bandwidth to all of our locations and will also increase our network reliability," said Iglesias. "We are also deploying a new telepresence to advance collaboration, deploying new cash recyclers, revamping our public website and e-banking platforms and making investments at our DR [disaster recovery] site."

Additional Cybersecurity Investments
Cyber security and fraud are also leading concerns for the digital-first leaning Alliant Credit Union, explained Senior Vice President of Operations and Technology George Rudolph.

"Financial institutions will have to continue to put more focus and resources on cybersecurity and fraud," said Rudolph. "And to this point, we will be furthering our cybersecurity maturity and making additional investments."

Currently, Alliant CU's technology department supports 80 employees. In 2017, Rudolph said, the department will add 14 new hires. In total, the CU has approximately 450 employees.

"This represents an investment in cybersecurity, but also a shift toward being a digital-first credit union, which is part of our long-term strategy," said Rudolph who added that the CU launched its own mobile banking app in 2016. "We also plan to redevelop all of our existing proprietary online banking and new membership applications in 2017."

Make Lending Simple Again
Simplifying the lending process for members is a trend that Symitar’s President Ted Bilke forecasts in 2017. The San Diego, Calif.-based firm provides core technology solutions for credit unions.

“Our customers are asking for a more simplified lending process through all the digital channels,” said Bilke. “They want their members to quickly and easily get a loan. And we are starting to see a variety of technologies that can reach that goal of getting the loan in a couple of clicks.”

New lending technologies, he explained, use business analytic tools to pre-qualify members. These solutions are specific to a member’s history and financial track record. The goal is to allow CUs to confidently approve small dollar loans (e.g., $500 to $1,000) swiftly. Speed to market on these technologies, however, could be hampered.

“The challenge is using data, such as average balance or length of relationship (with the CU), opposed to using a FICO score,” said Bilke. “For some credit unions this will be at odds with what they have done historically.”