2023 Lending Trends for Credit Unions to Watch

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The lending landscape (especially when it comes to digital lending) is constantly shifting, making it hard for credit unions to keep up. As we look ahead in 2023, there are several emerging trends within the credit union industry that credit unions should be aware of.

From new technologies to more traditional methods of attracting and retaining members, understanding the most up-to-date lending trends will help ensure the success of your credit union in 2023.

For credit unions, staying ahead of the curve can make all the difference. Understanding the 2023 lending trends is key for any credit union looking to take its lending operations to the next level.

2023 Lending Trends Landscape

According to a recent forecast from CUNA Mutual’s Trend Report, banks and credit unions should expect a “mild recession in the second half of 2023 as consumers’ excess savings dries up.”

It wouldn’t be surprising if we see the Federal Reserve raise interest rates another 50 to 75 basis points to reduce the pressures of inflation in the coming year.

There are several factors that make a recession likely this year, including these higher interest rates as well as lower prices on stocks and homes and very “satiated consumer demand for many durable goods.”

2023 Credit Union-Specific Lending Numbers

In November of 2022, that same report from CUNA Mutual stated that throughout the third quarter of that year, credit unions with assets that totaled more than $1 billion reported a 20.3% increase in loan balances, and those credit unions with assets fewer than $20 million reported a smaller loan growth (6.9%) in the same period.

The report states that overall credit union loan growth is expected to rise to 8.0% during the 2023 calendar year.

Auto Loan Trends

In the past few years, the price of used cars has risen due to the shortage of new cars coming into the consumer markets. But as that shortage shrinks and more new cars become available, used car prices will see a small decline this year, CUNA Mutual reports. This creates a great opportunity for members looking for 2023 lending trends that help them make the most of their car payments.

This fluctuation will continue at least through the rest of this year, with hopes that prices and inventory will normalize in 2024.

Home Loan Trends

When you think about the word “recession,” many of us remember the housing crisis in 2007 and 2008. During that time, many people lost equity and their homes altogether because certain mortgage lending practices ended up far overextending the loan recipients as more and more layoffs took hold around the country.

And while we will likely see a mild recession this year, the housing market isn’t nearly as unstable as it was back then. There are rising numbers of consumers and credit union members with delinquencies and unsecured loans, but even amidst these uncertainties, 52% of Americans are optimistic about their financial future in 2023.

And as younger Millennials and Gen Z continue their trend of being debit-loving, credit-averse individuals, it’s easy to see why they carry the highest levels of optimism. They work diligently to stay within their means whenever necessary, rather than extending lines of credit in hard times and struggling to decrease those debts over time.

The Rise of the Union

Amazon, Starbucks, and more – 2022 gave us a lot to consider when it comes to how Americans feel about unionization. These movements, coupled with the economic downturn, rising prices, and stagnant wages have created a perfect climate for more union efforts to take hold across industries.

Because of this, it’s important to focus on employee rights and protections as you move through 2023. There are too many open positions at your competitors and other community businesses for you to let employee relations suffer this year.

Even if you run a business in an “at will” state, there are likely several employee protections under the Fair Labor Standards Act that could affect how you manage, hire, and terminate employees in the near future.

Employee changes can directly affect the efficiency and success of your loan programs, among other things. This is why online initiatives like digital lending practices and web loan applications are becoming so popular from the credit union as employer perspective.

Data, Data, Data: Information as Investment in the Future

With rising cybercrime and distrust in institutions that hold personally identifiable information (PII), your data, both its usage and storage of it, are going to become more and more important.

Many people are sharing posts and videos about how their personal information, photos, and other data are being used without their consent based on a corporation’s terms and conditions or their privacy policy.

Because these policies are often lengthy and hard to understand, few people read them. And that gives your credit union members pause – they don’t want their personal information being used without their knowledge, and you don’t want your credit union not to be in compliance with the latest state, local, and federal edicts as well as other banking regulators regarding your business’s usage, storage, and protection of this data.

When you are thinking about your data in 2023 and beyond, we’d recommend you ask yourself the following questions.

Who has access to your members’ data? This includes third-party vendors, employees, credit union branches, and sister or partner locations.

Why do these specific people and entities have access to sensitive and member banking data?

How long do they need access to this data?

What precautions are in place to safeguard this data? This can include multi-factor authentication, levels of clearance, automatic timeouts, temporary access, retiring disparate legacy banking systems, etc.

Navigate 2023 Lending Trends and More with IaaS from IMS

Just like you can’t hop on any viral trends without a social media account, your credit union can’t navigate financial industry trends with ease or optimize lending services unless your data storage and security are in place and functioning properly.

That’s why IMS offers infrastructure-as-a-service (IaaS) to help you create and configure the resources you need to store and protect your data in secure, offsite servers. 

9 Top KPIs for Credit Unions

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Credit unions are an important part of the financial services industry. As such, it is important to measure their performance and progress in order to maintain a high level of service and meet customer needs.

In the highly competitive world of credit unions, it is essential to measure performance using Key Performance Indicators (KPIs). Every organization should have KPIs specific to its organizational objectives, but there are certain KPIs that are important for all credit unions.

We recently discussed the essential network performance metrics for the financial industry. In this article, we will discuss the top KPIs for credit unions in order to provide guidance on how to measure success. We will examine how these KPIs can be used to assess operational efficiency and financial performance.

Why Are KPIs Important to Credit Unions?

KPIs, especially those that monitor sales performance and financial performance, can be great data to use and apply to your credit union’s current growth and opportunity initiatives.

But they offer more than just options for CU growth, KPIs are commonly used to:

  • Create a Culture of Learning – These metrics can help your departments and staff members collaborate and learn as they dive into KPI analysis.
  • Measure Goals – Business goals are complex. Familiarity with a KPI report that tracks your sales, marketing, or digital banking initiatives offers great insight into how you are measuring up against the goals you’ve set for your CU this year.
  • Improve Operations – Business goals and initiatives evolve over time. But your KPIs can help you with consistent measurements throughout every ebb and flow. Seeing financial systems and their cycles over time can create true operational efficiency. This is more powerful for the success of your credit union than reactionary measures or growth campaigns will ever be.
  • Provides Quantifiable Feedback – Credit union leaders know all to well the struggle of finding out “why” a certain product, service, or initiative was so successful (or so underwhelming). KPIs create data that tracks the state of your operations as you grow and change, and this can offer important feedback when you study the trends shown within your KPI reports. Now that you’re familiar with the importance of KPIs for credit unions, let’s look at some of the big ones your CU should be tracking.

Overall KPIs for Credit Unions

Your credit union has likely experienced some big changes in the last few years. And with those changes come other opportunities and obstacles you must address in order to continue growing as a business. Here are some of the top overall KPIs for credit unions.

Loan growth is the percentage change from period to period of your loans outstanding. While you can certainly drill down into the different types of loans and other lending products and services your credit union offers, keeping track of the overall trajectory of your lending programs is important.

Member growth is the percentage change of total credit union members from period to period. As big banks continue to try and use technology to wow their customers, your membership growth opportunities are going to come mostly from digital banking and customer service differentiation.

Return on assets is the annual net income divided by your average total assets. ROA is a top indicator of profitability in any business. This should, for credit unions, be more of a guide rather than an absolute indicator of success. Many credit unions are not working solely towards profitability – there are other factors and goals that may lead to less profitability but more community outreach and recognition within the geographical areas you serve.

The average member relationship is the average value of assets (loans, deposits, etc.) that an individual member has with your credit union. This KPI can be determined by analyzing your pricing strategy, underwriting policies, product mix, and more. This can also be affected by environmental factors, including the current job market and the economic environment of the areas you serve.

Digital KPIs for Credit Unions

62% of all consumers consider mobile banking apps an essential service, and nearly 3 out of 4 consumers use them as their primary form of money management. Digital banking becomes more important every year, and your credit union serves a very loyal member base (if you’ve done things right for them). That means digital banking KPIs are just as important as the traditional ones we mentioned above. Here are some of the top KPIs to watch.

Return on investment of your online platform should likely be at the top of your digital KPI monitoring. This shows you the relationship between the total amount of resources used for the platform and the total returns you’ve made from it. Upselling and cross-selling will be the drivers of most of your gains here. You can also use the reduction in cost you’ve realized since moving from paper or in-person products and services to digital solutions. It’s a great way to see the overall value of your digital programs, for your credit union and for your members.

Active clients is another strong KPI to track – this one shows you how many members are downloading and regularly using your digital applications and online banking services.

There are also several conversion-based KPIs that can help you monitor the effectiveness of your online programs. 

Number of conversions is just the total number of users who have begun the process of onboarding to digital banking apps and solutions. 

Conversion ratio is the number of members who complete the sign-up and onboarding process, and conversion time is how long the whole process takes per member. 

Abandonment rate is the number of members who have chosen not to complete the process.

These conversion KPIs can tell you a lot about which areas in your digital banking platform are performing well and helping your members the most, and which areas need to be improved upon to decrease the number of members who abandon the process altogether.

Your Data Is a Gold Mine – Keep Things Organized and Safe with IMS

The more you can use your data and the top KPIs for credit unions to glean insights on what your members, staff, and community need, the more opportunities you’ll find for growing your credit union services and membership base.

IMS offers a host of virtual private cloud services created specifically for credit unions like yours. From backups and data discovery to compliance, anomaly detection, and IaaS, we’re working hard to keep your data safe, secure, and organized. Reach out to us today or check out our website to learn more about our services.

Green Finance as a Growth Opportunity for CUs

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As the world grapples with climate change, we’re seeing a growing demand for green finance solutions. This is an opportunity for credit unions to capitalize on this growing market and benefit from potential growth opportunities.

By embracing green finance, credit unions can increase their profile as responsible lenders and be part of the fight against climate change. Green finance involves offering financial products that support environmental sustainability and combat climate change – such as renewable energy investments or financing eco-friendly projects.

This type of finance also has the potential to generate significant returns by investing in businesses that prioritize environmental responsibility. Credit unions can take advantage of these economic opportunities while simultaneously helping to create a greener future.

Inflation Reduction Act Spurs Green Finance in 2023

Recently, community development financial institutions (CDFIs) and minority depository institutions (MDIs) will be using provisions from the Inflation Reduction Act to expand their green lending.

This is just the latest in a number of green finance initiatives that we are likely to see grow in 2023 and beyond. But what is green finance and how can you leverage these initiatives at your credit union to create the growth you can feel good about?

The Future of Banking

As interest rates climbed and then plateaued in 2022, so does short-term profitability. But if the last few years have taught us anything, it’s that nothing is certain even in the short term.

This is where green finance makes its move.

So much of the financial forecasting we previously relied on has garnered mixed results as of late. Because of this, credit unions and banks are looking for ways to diversify their services and appeal to members who have their eyes on the future.

In McKinsey’s “Global Banking Annual Review 2022,” analysts go through some of the major factors driving banking into a “new era.” The review recommends for banks and credit unions to evolve from “more traditional business models to more future-proof platforms.”

These future-proof business models include focus areas like differentiated customer relationships, new customer access, and revenue sources, and innovation based on truly entrepreneurial endeavors. But one of the biggest ways to future-proof, according to McKinsey, is to target “environmental transformations.”

These transformations are led by the growing need for sustainable and green finance initiatives.

CU Growth & Green Lending

According to the 2022 McKinsey report, “the volume of sustainable syndicated loans, including green loans and sustainability-linked loans, totaled $683 billion in 2021, up by more than 200 percent from 2020.” The volume of sustainable bonds was up by 80% from 2020.

Financial industry changes are often valued below many other industries, and that is partially due to the net losses that are recorded by certain subsections of the industry overall. Despite all that, sustainable debt markets fared better than the overall debt markets. This upward movement is not likely to slow in the coming years, as initiatives around the globe are harnessing green finance as a way to expand sustainable initiatives.

These initiatives also help credit unions share in the investment and building of resiliency in the communities they serve. As consumer behavior and green initiatives gain traction, it also creates opportunities for credit unions to be on the front lines, supporting and financing those changes in areas that need it the most.

Why CUs Should Promote Green Lending Now

The McKinsey report goes on to talk about how the growing market for green finance also shows that few banks and credit unions have the short-term ability to finance some of the largest green initiatives that are gaining popularity including infrastructure, green hydrogen, green fuels, biomass, and carbon capture and storage.

But this creates a unique opportunity for credit unions, especially those in IRA-qualifying spaces, to start working with local community initiatives and small businesses on loans for these great green ideas.

Solar and wind power have been the topic of green finance and green lending for several years, even in areas that are not densely populated. These areas, where many credit unions thrive, will see an uptick in interest for these renewable energy resources, and that is a great opportunity to start working on offering sustainable loan packages and other programs that speak to this interest in businesses and infrastructures going green.

As more and more businesses and governments lean towards these green initiatives, it’s important that your credit union already has the infrastructure and capacity to serve this audience in the near and distant future.

Use Your CU Data to Pave the Way Forward with IMS DataArchiver

Data discovery is a great way to see what your credit union history looks like when it comes to green finance initiatives. The IMS DataArchiver is your SaaS solution for exploring rapidly growing amounts of data from on-premise storage to cloud storage and everything in between. It protects your data and also gives you helpful tools for finding specific data types with data visualization and e-discovery features. 

Essential Network Performance Metrics for the Financial Industry

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Cybersecurity is a major concern for companies across all industries, especially in the financial sector. The financial industry is facing a unique set of challenges. With vast amounts of sensitive information being exchanged, organizations must take extra precautions to protect their data. To ensure that their networks are safe, financial institutions should be aware of key performance metrics.

Let’s discuss the top network performance metrics for the financial industry and why they’re important for organizations to understand.

Network Performance Metrics to Watch: Bandwidth

There are many instances when you hear phrases like “we don’t have the bandwidth for that.” Often, this conveys a sense that whatever solution or course of action you’ve proposed, the current infrastructure of your credit union can’t handle it. This is what makes bandwidth one of the essential network performance metrics for the financial industry.

Bandwidth is the term used to describe the rate of maximum data transfer in your network over a certain amount of time.

The goal is to monitor and optimize your network’s bandwidth without going over the limit.

If your favorite retail store encounters a bandwidth problem that leads to downtime on its website, it can regain the trust of customers with sales and smart marketing. But credit unions are financial institutions, something that people rely on 24/7. Downtime and bandwidth issues for you can mean the loss of lifelong members.

People want infinite and unlimited access to their financial accounts. They want faster funds transfers, instant deposits, and payment options. This doesn’t leave much room for error. In fact, it makes it more crucial for your credit union to ensure that you have the bandwidth to handle whatever may come. And in these uncertain financial times, there are so many variables that your members will look to you to plan for and protect them from.

Level of Preparedness

Level of preparedness is a network metric that helps you determine how many of the devices on your network are fully patched and up to date. This is an important metric for credit unions and other businesses in the financial sector because it can help you detect and eliminate vulnerable devices and services.

Scanning for and managing vulnerabilities can also greatly reduce security breaches and lower IT and other costs.

Security Incidents/Intrusion Attempts

How many times has an attacker gained access to your information, assets, and/or network? How many times has an attacker attempted to access these items? Those numbers tell a story.

Of course, no cybersecurity effort should be without a thorough and frequent look into security incidents and intrusion attempts. Keeping an eye on these numbers allows you to recognize vulnerability trends more quickly.

Effective network performance keeps your vulnerabilities low. This means your analysis of security incidents and intrusion attempts should yield consistent results over time. That is, your numbers will stay consistent if your IT operations continue to evolve to protect your data from the latest threats.

If your IT program isn’t keeping things secure, time is of the essence. And it saves you time to keep yourself and your credit union leadership teams apprised of the number of incidents month to month and year to year.

Packet Loss

Packet loss measures the number of data packets lost during a transfer between two destinations in your network. Packets are the tiny pieces of data that are being sent and received over digital channels. This includes everything from downloaded files to email correspondence and more. There are many things that cause packet loss from software issues to network congestion or router problems.

Here’s a helpful tutorial on how to test for and fix packet loss issues.

Unidentified Devices on Internal Networks

Though most people imagine a hacking or breach attempt as having originated from “outside the castle walls,” it’s important to remember that every employee and member who accesses your network has the ability to corrupt it.

Employees can introduce viruses and other malicious code via their personal devices and habits. This can lead to issues as you are working toward building an efficient IT network.  

Company vs. Peer Performance

A high-level KPI to watch for in the list of network performance metrics for the financial industry is company versus peer performance. An efficient IT network, especially in the financial sector, should be able to keep performance above the average level for your industry.

You can compare a range of basic network metrics, including many of the ones we listed above. There are several reporting companies that have industry averages available online for you to compare against.

This is a metric that is more important when it comes to positioning your success in the industry. In essence, you won’t need this metric to improve specific cybersecurity efforts. But you will need these comparisons to show your board members and other credit union leaders that you are aware of the industry standards and are working toward and achieving those levels at the time you report to these governing bodies.

Network Connection

Checking connection is a big performance metric for ensuring optimal network performance. This metric shows you the connectivity between all the devices, nodes, and systems in your network.

You can use this metric to find and minimize service interruptions before they cost you customers and important data or operations.

IMS uses the premier backup solution for credit unions. This allows you to keep your credit union data up to date and stored securely at an offsite IMS data center. In addition to backup and recovery, this Rubrik backup solution also includes continuous data protection, ransomware recovery, replication and disaster recovery, virtualized environments, and Windows and Unix protection.

Learning from the Digital Experience at Top 100 Credit Unions

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Credit unions are a popular financial institution for many, yet the digital experience offered to their members can vary greatly. There are lots of insights and ways credit unions can use the digital experience at the top 100 credit unions to augment and transform their own offerings and operations.

Recently, Finalytics.ai released its 2023 Credit Union Digital Experience report, which they call the “annual deep dive into the largest credit unions in America by asset size, to analyze digital experiences across the industry.”

This report evaluates credit unions based on several items, including website, online account origination, analytics, member experience as a whole, cybersecurity, and privacy offerings. We wanted to take a look at these findings and see what trends are emerging.

In the modern-day, digital experiences are becoming a cornerstone of the financial industry. Credit unions have been taking advantage of these advancements to better serve their members. By analyzing the strategies implemented by these successful organizations, we can gain insight into how credit unions can create an effective digital experience for their members and improve overall customer satisfaction.

Let’s examine what we can learn from the digital experience of the top 100 credit unions in terms of user-friendliness, accessibility and services offered.

Overall Digital Experience Winners: Here’s How They Did It

The top 5 credit unions when it came to overall credit union digital experience, were VyStar Credit Union, Alliant Credit Union, CommunityAmerica Credit Union, Wings Financial Credit Union, and Redwood Credit Union. In general, each of these institutions enhanced their members’ digital experience by providing them with the features, aesthetics, and overall experience they preferred.

CU UX (User Experience) Needs to Be Optimized

Finalytics.ai ranks the different categories on a scale from worst to best with scores from 1 to 5. The average user experience (UX) score was 2.31 out of 5, which shows a marked need for improvement across the credit union industry.

In order to improve your own credit union’s UX, product-focused primary navigation is a must. Though this seems like a no-brainer, Finalytics.ai found that slightly more than half of the credit unions studied actually had their products listed in their primary navigation – the website menu.

Members and prospects are often coming to your website for solutions, not philosophies. While your mission and community outreach are hugely important to your brand image, your CU website should cater to those looking for product- and service-based solutions to their current problems and questions.

Think of it this way: if you opened your favorite navigation app or website and had to click through three or four tabs before you could enter in your destination address or name, you’d likely find a new navigation app, right? The same is true for your members: if they need a loan, they want to be able to navigate to your home page and see a tab that will take them to the loan types you offer, or even a digital loan application form.

The member journey should be one that is reflected in the UX of your website. It spans multiple channels, touchpoints, and sessions – this means your online presence needs to help guide them through that journey with as little friction as possible.

Personalization Matters

We’ve talked here and on our sister site’s blog about the importance of including personalization at all steps in the member journey, and the Top 100 credit unions report agrees, naming it a top growth trend.

Only 7 of the top 100 credit unions in the nation are ranking on a deeper level for personalization, and only 21 had some level of personalization included in their online presence.

Along with personalization, segmentation of credit union audiences was also lacking. Those segments (which can include different audience targets and even primary navigation that helps those looking for Business Personal, and Wealth Management insights and products) were considered “well-defined” in just 30% of the website content analyzed by Finalytics.ai.

The Role of Security in the Digital Experience

Part of a credit union’s digital transformation strategy in 2023 and beyond will need to include the way we talk about and protect our members’ data and information. In the Finalytics.ai study, they found that security and privacy content consists of two primary areas: the credit union side (what they’re doing to protect their member information) and the user side (what your members can do to protect their own information).

One way to improve this score, Finalytics.ai found, was to increase the visibility and access to information pertaining to cybersecurity and personal data and banking best practices. If your credit union doesn’t already have a dedicated and highly visible area for users to find tips, tricks, and instructions for safe ways to use your apps, website, and other mobile or online banking offerings, it’s worth the investment to create those resources for your members.

It’s also important to communicate often and stay consistent with your messages to members about the state of your cybersecurity and other digital transformation strategy items. Transparency and honesty can often close the rift for prospects: if you can show your members and potential members that your credit union is committed to offering a similar level of protection that big banks can, it goes a long way in building trust in your brand.

Keeping the Momentum Going

Trust is the key to member satisfaction, and that means being intentional and transparent with your credit union’s offerings and operations this year.

Some exciting and positive findings in the Finalytics 2023 Credit Union Digital Experience Report include growth in all of the following: loans outstanding (16.2% increase year to year), shares and deposits (up 8.1%), and net worth (10.8% growth).

Finalytics.ai also had some insights into the top digital services members value and desire the most, which include:

  • Remote deposit capture
  • Digital cards that can be issued directly to a digital wallet
  • P2P payments
  • Digital wallets
  • Cardless cash withdrawals

With all that emphasis on increasing digital access and solutions, you’ll need powerful data and security solutions, and IMS has you covered.

With our IaaS (Infrastructure-as-a-Service) solutions, you can configure resources to meet your CU needs. You can skip the pricey setup and installation of an in-house data center and trust your members’ data to our self-service, enterprise-grade cloud IaaS that was built to meet your credit union’s dynamic needs.

2023 Credit Union Cybersecurity Predictions

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As technology advances, so does the need for heightened credit union cybersecurity measures. When it comes to cybersecurity, credit unions must stay up to date with the latest threats in order to keep their members safe and secure.

As the world of technology continues to evolve, so do the challenges of keeping our data secure. Credit unions in particular face a unique set of cybersecurity threats that must be anticipated and prepared for. We will discuss how credit unions can leverage digital transformation to protect themselves and their members from malicious cyberattacks as well as explore emerging technologies that may be used to combat potential threats.

In this article, we will take a look at what experts predict are some of the major credit union cybersecurity predictions for 2023.

Credit Union Cybersecurity Will Be a Top Risk Management Concern

According to a recent NCUA article, the top 4 risk factors affecting the financial industry in 2023 include interest rate risk, liquidity risk due to inflation concerns, credit risk due to housing and loan market concerns, and cybersecurity risks due to geopolitical issues and growing dynamic threats.

In July 2022, NCUA approved a rule that requires credit unions to notify NCUA no later than 72 hours after they reasonably believe a reportable cyber incident has occurred. They have created and optimized their ACET (Automated Cybersecurity Evaluation Toolbox) and offer many free resources and checklists to credit unions aiming to adjust and evaluate risk management concerns for the new year.

“Passwordless” Solutions Are at the Forefront of Financial Cybersecurity Solutions

“Passwordless” solutions like MFA (multi-factor authentication) will continue to be a powerful tool in every credit union’s cybersecurity best practices toolkit. As the use of cloud computing and hybrid work and customer service solutions rises, so does the need to ensure all data, no matter where it is stored or sent, is protected by more than a password.

Password auto-fill options like the Google Smart Lock system continue to be popular in both personal and professional settings, and that can create rifts in security. But with MFA, those rifts can often be closed or avoided completely due to the hacker’s need to have more access and devices in order to complete the authentication process.

Because apps and cloud usage have exponentially expanded the attack surface for credit unions, these new technologies require advanced solutions that look much different than the ones that previously governed in-house servers and networks.

Phishing & Email Attacks Among Top Cybersecurity Threats for 2023

A recent article from Forbes outlines the top 5 scams that businesses should be watching for in 2023. They include:

  • Business email compromise (BEC): this includes the use of fake email accounts to harbor or spread threatening software and includes phishing attempts, ransomware, and more.
  • Malware and Ransomware: due to the current geopolitical climate surrounding the conflict between Ukraine and Russia, many political cybersecurity experts believe Russia will use its resources to continue launching ransomware attacks against those governments and entities that do not agree with its current political agenda.
  • Crypto Scams and “pig butchering” scams: Named for the phrase “raising a pig for slaughter,” these attacks start with a friendly message that entices the recipient to create an online relationship with the sender (hacker). As that trust grows, the hacker will then start questioning the recipient about their interests in crypto in an effort to get them to buy into a website that is reputed to have made someone a lot of money, only for that crypto to be stolen from the recipient’s accounts.
  • Cybercrime cash-out process innovation: This is an evolving scam that started with hackers and bad actors asking unsuspecting and uneducated individuals to send gift cards or cryptocurrency in an effort to get around the “cash-out,” where payments that surpass $10,000 and other high-value transactions can be tracked and flagged for suspicious activity.
  • Scamming as a Service: Virtual marketplaces in underground websites are creating and selling end-to-end services that “enable low-skill threat actors to fill their carts and pay with crypto,” Forbes says. These services include full sets of stolen credentials, ready-to-deploy ransomware, phishing, other attacks, and more. Even the bad guys love a good package deal.

Multi-Year Strategic Plans Work Best for Cybersecurity Success

Because cybersecurity threats are ever-changing, credit union and financial industry leaders must be prepared to put their money and their time into multi-year strategic plans. Cybersecurity is a complex beast, and everything and everyone that interacts with a network can create potential threat opportunities.

A mix of internal and external threats are often already beginning to make their way through secure areas, files, and devices throughout the year, and an improvement in key performance metrics, like a decrease in ransomware or phishing attempts, is no reason to ease off or to decrease your institution’s budget for cybersecurity personnel, services, and software.

Organizations with Cybersecurity Network Architecture Will Reduce Financial Security Costs By 90%

Does that sound too good to be true? It’s a certainty by 2024, according to Gartner’s cybersecurity predictions for 2023-2025. Those organizations that switch to a more holistic cybersecurity approach that encompasses not just their devices and network, but all technology that has access to or is integrated with it, are expected to see a 90% reduction in the final costs of security incidents.

Credit union cybersecurity threats are serious and should be caught early to minimize damage and data theft. That’s why IMS offers Polaris Radar, an anomaly detection software that enables your system to recover more quickly and easily from an attack on your credit union network security. Don’t get caught unawares, especially when your members’ personal and financial information may hang in the balance.

3 Unique Challenges Small Credit Unions Face

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There are just over 5,200 credit unions in the United States, as of 2021. And more than 65% of those are classified as “small credit unions.” According to the NCUA, these are credit unions that have less than $100 million in assets.

In much the same way that any small business will have vastly different challenges than corporations, conglomerates, and other big business operations, there are also unique challenges for small credit unions. Let’s talk about some of the biggest challenges and share some ideas and opportunities small credit unions can take advantage of in the near future.

Challenge #1: Growing Your Member Base

Many small credit unions are struggling to grow their member base in recent years. This is due to several factors, including the COVID-19 pandemic, increasing technology and innovation, inflation, supply chain issues, rising costs, and the rise of digital banking.

Credit unions often serve a small or specific demographic, industry, or geographic area, and that makes it hard to increase membership. But there are many ways to incorporate growth-focused solutions into your credit union’s current programs.

The first thing you can do is differentiate. We are seeing member satisfaction drop and consumer complaints increase. Larger businesses and big banks all have the same problem – there’s no human element, and they often lack that personal touch that small credit unions are known for.

You can differentiate by updating your credit union’s brand imaging, colors, or even the name of your credit union. You can also leverage community outreach, sponsorships, and member experience. Authenticity and true connections to your members will be more powerful than a catchy slogan and empty promises. Your members and prospects want real, high-quality experiences with the brands they endorse, from the clothes they wear to their subscriptions, healthcare providers, and financial institutions.

Marketing is also another powerful tool you can leverage as you work to grow your member base. Because yours is a financial institution that works to integrate itself into the communities it serves, you can often highlight real members and real problems your communities are facing. Offer discounts and complimentary services for members who are willing to share their experience with your credit union on their social pages. Create video, caption, photo, and other contests and have your members create your marketing content for you – they’ll have the chance to be highlighted (and win or earn the contest prizes) in exchange for their true and relatable stories about how your credit union helped them realize their entrepreneurial dreams, or how your community outreach efforts made for a positive holiday experience for families in the area.

Marketing can no longer be a sporadic or piecemeal effort for small credit unions. You have all the promotional power that big banks do, and you can scale the costs to work with your budget while making real progress in capturing market share.

Challenge 2: Market Share

A third way to grow that member base and capture market share is to lean into the community you have and take a chance on some of the small businesses that have been turned down by other big banks and credit unions. Small credit unions can often offer solopreneurs and side hustlers small loans and financial assistance that can help them meet their goals and grow their businesses.

If a member just barely misses being able to qualify for one of your loans, sit down with them and try to get a clearer picture of what their financial situation looks like. There are opportunities here, and having a more personal approach not only increases your loan numbers, it also creates a valuable relationship and often means the member will work even harder to ensure they can fulfill their loan requirements. Positive reinforcement is a great way to build brand image and reputation, as well.

Challenge 3: Innovation & Technology

Another big hurdle for many small credit unions is the ability to innovate and implement the latest technology. This is one of the top challenges for small credit unions because often, to get these new technology offerings, you have to pay a premium. However, as social media marketing and app development have become easy to create based on existing templates or freelance work, the playing field on this front has been all but leveled.

Now it’s up to your credit union to stay on top of the latest innovations in banking, fintech, and the like to ensure that you are offering your members the latest and greatest in financial management and digital tools.

IMS: Scalable Private Cloud Solutions for CUs of All Sizes

IMS has positioned itself as a unique cloud-based partner for credit unions of all sizes. From disaster recovery to data analytics, our Private Cloud services are tailored to CU needs. We use the latest technology and best practices to ensure your data and your members’ data are stored, backed up, and easily recovered.

We’ve made a name for ourselves in the credit union industry, and our goal is to serve your CU with the best technology and support on the market. Check out all of our private cloud services today.

Banking Trends: Digital Credit Union Services Poised to Dominate in 2023

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Just as 2022 was poised to increase stability and purchasing power after a few years of pandemic-fueled volatility, we saw record highs in inflation rates, as well as ongoing labor and supply shortages.

With this potential for continued turmoil as we move into the new year, we wanted to talk about some of the banking trends we see gearing up for a big year in 2023. From multi-cloud banking to analytics and other technology upgrades, here are some of the most touted digital credit union services poised to dominate in the coming months.

Application Modernization & Repatriation

The last several years have brought about a renaissance for credit unions to suddenly have embraced more modern digital solutions and technology. The use of apps is not a new practice, but the digital credit union services that are being hosted or run through these apps may have changed drastically for your credit union since 2020.

And the theme for 2023 in digital banking trends seems to be “renewal.”

Many credit unions and financial institutions are heading back to those recent digital upgrades and auditing or augmenting them for their current member needs. Many technologies were implemented hastily, in an as-is fashion. “We’ll go back after the pandemic and improve them,” we said.

Now is that time. Are your credit union apps and other digital services optimized for 2023? There are several ways to examine this.

The first is to take a look at how many updates have been pushed through to those technologies and what those updates were for: did you improve usability? Security? Have you fixed any bugs or slow-loading pages in these online or mobile solutions? Now’s the time to take a look at what value your newly implemented technologies still hold for your members.

A 2022 report showed that 99% of financial services organizations are modernizing apps in the next year.

Another app-focused trend in regard to digital credit union services includes app repatriation. App repatriation (and cloud repatriation as a whole) is the practice of reclaiming apps (or other data and software) from a public cloud and putting it back onto local servers.

This is being done partially due to rising costs in cloud computing and software, and also because these apps perform more efficiently when hosted on local networks instead. Though there are several drivers in the move to repatriate apps, it’s continuing to gain momentum as an industry practice as we head into 2023.

Multi-Cloud Banking

As some financial institutions are moving certain data and apps out of the cloud, many others are working through the kinks that come with multi-cloud banking integration.

Data privacy and accessibility are the main drivers for the move to multi-cloud banking. With a multi-cloud approach, your credit union can benefit from vendor diversification, improved performance, and cutting-edge updates and capabilities.

According to Data Science Central, the top benefits of multi-cloud banking include:

  • Operational consistency
  • Regulatory compliance
  • Data security
  • Adaptability

Balancing Security & Performance

The importance of maintaining great cybersecurity solutions for your credit union as well as optimizing member performance can sometimes leave your CU’s leaders feeling like this is one balancing act that you can’t ever get 100% right.

As we move into the new year, digital credit union services are being audited for their security and their user-friendliness, though these two practices are often at odds with each other.

Two-factor authentication is always going to be safer than using a simple username and password, but it also makes the member experience a bit more frustrating. Straddling both worlds is tough, but digital transformation is all about creating forward momentum with the best digital solutions. In fact, one-third of decision-makers in the banking industry say they would trade some of their security for a small (less than 25%) increase in performance for member-facing technology!

Implementing low-friction tools like IMS’s backup, disaster recovery, and compliance solutions can help keep your vulnerabilities low and your members happy with their low-friction experience.

Emphasis on Analytics

If data is the key, then analytics is the house that it unlocks. There are tons of possibilities for insights and growth in each data set, depending on how you choose to arrange and analyze it.

There are tons of digital credit union services that would benefit from your own credit union’s deep dive into what your member and operations data can tell you. Big banks can often follow larger trends with ease, but your CU’s member base may have specific needs that aren’t being met – you may be literally sitting on opportunities that you haven’t discovered yet – and they’re just hidden in your data, waiting.

Advanced analytical tools can assist you with data discovery, compliance, visualization, and more. There are many data opportunities that can be turned into profitable insights, help you streamline your internal reporting, improve lending assessment processes and accuracy, and even identify more risk indicators.

You can improve your credit union’s loan performance by leveraging industry insights with the data from loans you are approving, collecting on, and rejecting.

Up Your Analytics Game for the New Year with Data Discovery from IMS

Simply possessing data doesn’t help your credit union. Your ability to analyze and interpret that data, however, can offer a comprehensive and insightful look into member behaviors, issues, and preferences.

IMS offers data discovery help through the IMS DataArchiver, a data management system delivered as a SaaS solution for your New Year’s goals. It offers on-premise and IMS cloud storage, ransomware protection, data compression and de-duplication, all within a customizable, user-friendly UI.

A new year often means new technology opportunities. What are you waiting for? Reach out to us today!

Top 4 Disaster Recovery Concerns and 2023 Cybersecurity Trends

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2022 has almost come and gone already. Your credit unions are gearing up for holiday promotions and member requests, and before you know it, you’ll be writing “2022” on your transaction records and deposit slips and then crossing it out because you forgot we’re in 2023 now!

We all make mistakes, and some are inevitable, that’s why we wanted to shed some light on the most common disaster recovery concerns as well as highlight some of the biggest 2023 cybersecurity trends.

Mobile Banking is a Big Target

Because your members are doing more and more of their financial housekeeping from their smartphones, there are several reports that mobile banking malware attacks are on the rise – seeing an increase of more than 50% since 2019.

Today, the majority of fraudulent transactions are being initiated from mobile devices, and that includes things like malware, data tampering, phishing attacks, ransomware incidents, and data loss.

Mobile banking will likely remain a top concern for your credit union branches (and for financial institutions as an industry) through 2023 and beyond.

Enhancing the Digital Experience

The work-from-home and remote solutions culture is still going strong in 2022 – expect to see an increased fluidity with which people are completing their work, personal appointments, shopping, finances, and so much more.

This includes optimizing your member-facing digital and mobile assets and services, as well as increasing the efficiency of your employee offboarding. Getting non-employees off your servers and out of your access windows is arguably more important than getting them the access they need at onboarding.

Without access, a new employee’s productivity is slowed, sure, but without timely access revocation, your former employees can slow the productivity of your entire staff.

It’s no longer about training new hires faster, it’s about keeping the incoming and outgoing access requests efficient to minimize gaps in your access security.

Endpoint Security Will Continue to Be Big

One of the most common 2023 cybersecurity trends and disaster recovery concerns includes endpoint security. All these remote and mobile access points mean your credit union’s network has never been more vulnerable from more angles. The IoT (Internet of Things) creates more opportunities for people and businesses to connect, but that same connection can be used to exploit your credit union’s network vulnerabilities.

We’ll see bigger pushes for remote and virtual desktops, increased endpoint security, and more. Data and productivity protection will become top-priority items.

Downtime is something that many of your members are not going to tolerate – and that means using your resources to create big bank solutions on small business and independent credit union budgets.

To help determine your direction for 2023 cybersecurity success, the latter part of 2022 and the first part of 2023 are the perfect windows of opportunity for your credit unions and branches to do some thorough vulnerability assessments.

Including MFA (multifactor authentication) and other access, controls should be educational and operational frontrunners – keeping the right people in and the wrong people out can decrease your chances of a data breach substantially.

Cloud-Based Business Continuity

Too much of your endpoint management and security resides outside the walls of your credit union branches. There are so many branch-sharing initiatives and other remote and mobile banking trends that will continue to raise disaster recovery concerns and top the charts for 2023 cybersecurity trends.

Because of this, your solutions should follow a hybrid model. Storing all your important data and programs in a single location (whether onsite or not) can create vulnerabilities in your disaster recovery strategy.

Cloud-based solutions like those offered at IMS can help diversify your data and create more avenues from which to recover, should your credit union start 2023 with an unexpected breach or data loss attempt.

For some great resources on disaster recovery, check out the Disaster Recovery Journal’s recent article, “Are People Top of Mind in Your 2023 Business Continuity Strategy?”

Need Help with Your Disaster Recovery Plan?

To help address your disaster recovery concerns and set you on the right track to tackle any 2023 cybersecurity trends, our team at IMS wants to offer you an all-inclusive backup service with disaster recovery, too!

Just like your credit union’s main goal is to educate and serve your members, IMS is here to support credit unions with unique and tailored solutions that fit into your CU’s operations. We don’t send you solutions that you have to adjust your credit union network and IT operations for, we are all about filling IT and cybersecurity gaps for CUs large and small.

It’s time someone helped take care of you – reach out to IMS today and let us know how we can help!

National Cybersecurity Awareness Month 2022: 4 Major Takeaways

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October was National Cybersecurity Awareness Month, and we wanted to share some of our favorite insights we found throughout October. The importance of cybersecurity should include several focus areas.

Your network health and security should be a priority all year. As threats evolve and emerge, so should your cybersecurity strategies. It’s easy to feel overwhelmed about the state of your credit union’s security, but there are so many tools and experts ready to elevate your networks and provide you with powerful solutions.

The Human Element is Paramount

The theme for the 2022 National Cybersecurity Awareness Month is “See Yourself in Cyber,” which focuses on the human element of cybersecurity strategy. Because you can have the best protection and tools for your network, but more than 90% of cyberattacks are initiated (usually unintentionally) by human error.

From tellers to your CEO, and IT professionals to branch managers, the human element of cybersecurity is made up of everyone using your networks. And because credit unions are responsible for holding the life savings and other monetary assets of their members, it’s important to have all your employees trained on the most up-to-date cybersecurity practices.

Teaching your employees about the importance of cybersecurity includes showing them how to secure their everyday operations (with passwords, multifactor authentication, logging off computers instead of leaving them running or unlocked, etc.), how to recognize malicious content, emails, and more, as well as informing them how to report and react to cybersecurity breaches when they occur.

Learn about Your Members’ Habits, & Correct Them If Necessary

“Think before you click” is another way to underscore the importance of cybersecurity, especially after National Cybersecurity Awareness Month. It’s a catchy phrase that packs a punch.

Many of your members are using their credit union information in third-party payment apps and on a host of diverse retail websites. The current “Tiktok made me buy it” trends have sparked innumerable spam accounts that are pretending to carry products that have gotten popular on social media and other platforms.

Your employees and members aren’t IT experts, but you can give them the tools to help recognize when and where they should be sharing credit union account information, or personal information in general.

Check to ensure that websites are PCI compliant, and teach your members how to recognize warning signs and scam accounts, emails, and sites.

Passwords, Passwords, Passwords

Weak passwords are often the downfall of an individual or credit union network. Sharing passwords, keeping them taped to your computer monitor at work or at home – we’re all tired of changing our passwords and finding out that we need uppercase, lowercase, special character, and minimum character length requirements.

But all these elements underscore the importance of cybersecurity: it’s in the details. Strong passwords are a great primary line of defense for several reasons. When you add each of these infuriating characteristics to your passwords, it would take a hacker nearly two decades to figure out what it is and leverage your data and networks in their favor. With that kind of security, it makes the hassle of creating these complex passwords worth it.

Update Your Software

The cyber threat landscape is always changing, and your software should be updated to keep up with those changes.

Cyber attacks aren’t growing because people refuse to put safeguards in place, they’re growing because more people than ever are carrying out core business and personal functions completely online, and the tools you had in place last year or even last month are already being circumvented by the latest threats.

Many credit unions (and businesses in general) hate losing productivity to time-consuming updates, but the importance of cybersecurity often lies most heavily in the preparation, not the reaction.

Here are a few tips:

  • Try to schedule disruptive or in-depth updates for downtime – stay away from business hours if possible.
  • Remind your team and your members early and often if you have updates that will render parts of your system unavailable for any amount of time.
  • if possible, turn on automatic updates – this prevents you and your employees from missing or skipping an important software patch or update.
  • Evaluate your software regularly – are there other products that could do things better or more efficiently? Look into them or create a review program to ensure your current solutions are the best solutions for your credit union.
  • Listen to IT department recommendations – costly mistakes can be made if you dismiss your resident cybersecurity experts. They’re not being alarmist, they’re telling you what will happen if you don’t take preventative action.

It’s Not “If,” It’s “When” – Why Your CU Needs Cloud-based Backups

Automated and unattended, IMS’s Rubrik backup solutions allow you to prepare for the worst without co-opting crucial hours of your management and IT teams’ time. Securing your data when there is a breach or data loss incident can be quick and easy.

IMS Rubrik includes backup and recovery, continuous data protection, ransomware recovery, replication and disaster recovery, virtualized environments, as well as Windows and Unix protection.

Reach out to us today to learn more about our solutions and the importance of cybersecurity.