The Long-Term Consequences of Credit Union Downtime

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Picture this: it’s payday and your members eagerly log into your app, anticipating the arrival of their hard-earned money. But instead of seeing the reassuring digits on their screens, they are met with an error message – unplanned downtime strikes again. 

Your call center and chat system are flooded with frantic messages from unhappy members trying to access their funds and resolve the issue for their employees. Consumers take to social media and suddenly a new hashtag featuring your credit union’s name is trending – and not the good kind. Business owners and accountants call and drop by your credit union, threatening to switch financial institutions if this happens again.

The Long-Term Effects of Unplanned Downtime on Credit Unions

In today’s increasingly digital world, where convenience is king, such technical glitches can have far-reaching consequences for credit unions and their members. However, there may be a glimmer of hope amidst this chaos. By exploring the long-term effects of unplanned downtime, we can uncover strategies to mitigate risks and ensure that payday remains a moment of celebration rather than frustration.

Losing Member Trust

Credit unions thrive on trust and rely on the loyalty of their members. Unexpected downtime can jeopardize this trust and harm the credit union’s reputation. If members encounter frequent interruptions, they might lose faith in the credit union’s capacity to protect their financial assets, resulting in a decline in membership and challenges in attracting new ones.

Increased Financial Losses & Costs

Unexpected downtime can lead to immediate financial setbacks as a result of disrupted transactions, lost business opportunities, and potential fines imposed by regulatory authorities. Over time, these financial consequences can accumulate and have an adverse effect on the credit union’s overall profitability.

To avoid and minimize unexpected disruptions, credit unions may have to allocate funds towards enhancing their infrastructure, hiring additional staff, or seeking external support. These additional expenses will increase the credit union’s operational costs over time. However, it is important to note that these increased costs are likely worthwhile to stay in business.

Compliance Challenges

Non-compliance with regulatory requirements can have serious consequences for credit unions, including legal and regulatory challenges, financial penalties, and sanctions. Credit unions may even receive additional scrutiny from regulators. It is crucial for credit unions to maintain the security and availability of member data and financial services to avoid these issues.

Member Attrition

Members (especially digitally-native members) are prone to leave a credit union that experiences downtime. Even one instance of downtime can lead members to flock to your competitors. Given that the cost of acquiring new members is often higher than retaining existing ones, the loss of members can result in substantial long-term expenses for the credit union.

Competitive Disadvantage

Credit unions that frequently experience unexpected downtime may struggle to compete against other financial institutions that provide more dependable and convenient services. This can hinder the credit union’s growth and ability to effectively serve its members.

Operational Inefficiencies

Unexpected downtime can throw a wrench into the daily operations of a credit union, causing potential data loss or corruption and resulting in suboptimal processes. Over time, this can hinder the credit union’s agility in responding to shifting market dynamics and meeting member needs.

Reputational Damage

The credit union’s reputation is at risk when frequent unplanned downtime occurs, making it difficult to regain trust. Negative feedback from members in-person and online (in reviews, on social media, etc.) and word-of-mouth can discourage prospects from becoming members.

Strain on IT Resources

Unplanned downtime puts a heavy burden on IT resources, demanding considerable attention and effort. As a result, the credit union’s ability to innovate and stay ahead in the competitive landscape is compromised, as valuable time and resources are diverted from strategic initiatives and technology enhancements.

Maintain Member Confidence with IMS

In order to address these long-term consequences, credit unions must prioritize the development of strong cloud-based infrastructure, disaster recovery strategies, and preventive maintenance. You will also want to consistently evaluate and test your systems and adhere to regulatory guidelines.

However, even then, downtime is still likely to happen, which is why credit unions need to maintain transparent communication with members to effectively handle downtime incidents. You will also need to consistently save system backups and implement a comprehensive disaster recovery plan to reduce the length of outages and lessen their consequences. 

Additionally, credit unions should explore the possibility of outsourcing backup and disaster recovery management to effectively utilize cloud resources and relieve the strain on internal IT teams. This is where IMS comes in. We provide backup and disaster recovery services exclusively for credit unions. Contact us today to learn how we can help you maintain your members’ confidence and reduce the long-term effects of downtime on your credit union. 

Climate Risks & Credit Unions: Prioritizing Resilience

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Climate risks, once distant scenarios or hypotheticals, have now become clear and present realities. From devastating wildfires to destructive storms, rising sea levels, and recurrent floods, these challenges pose serious threats to the business continuity of credit unions.

Credit unions have always been at the heart of the communities they serve, a local presence that taps into their financial needs. Unfortunately, this also leaves them vulnerable to climate impacts. These physical risks are closely linked with financial risks, and as we grapple with the destructive wake of environmental disasters, credit unions are called upon to support the recovery of these communities.

Diving Into Climate Risks

Reports suggest that climate-related events pose two distinct risks to credit unions: physical and transition risks.

Physical risks refer to the losses from acute climate-related disasters such as hurricanes, wildfires, and floods, and chronic, slower onset impacts like rising sea levels and increased temperatures. As these events have grown in frequency and severity, they have begun to dent the balance sheets of credit unions, especially those with a strong local presence.

On the other hand, transition risks result from the adjustment process towards a low-carbon and climate-resilient economy. They are triggered by substantial adjustments in climate policies, technological advancements, and shifting societal attitudes toward sustainability. These risks materialize as revaluations of assets and higher costs of doing business.

The Importance of Financial Resilience for Credit Unions

These multifaceted climate risks have supercharged the need for credit unions to recalibrate their risk assessment and management strategies. Integral to these new strategies is the role of financial resilience.

Financial resilience refers to the ability of credit unions to absorb the financial impacts of severe weather events and adjust their operations to withstand the transition to low-carbon economies. This level of resilience is crucial for credit unions to sustain their missions of serving their communities amidst the unpredictable tides of climate variability.

Building Climate-Resilient Systems in Credit Unions

Building financial resilience among credit unions begins with enhancing their understanding of climate risks and their potential impact. A comprehensive and robust risk management framework integrating climate-related risks is a starting point. This framework makes credit unions better equipped to anticipate, absorb, and recover from climate-driven events.

Trusted tools enabling the assessment of physical and transition risks would also help credit unions determine their climate vulnerability. This approach to climate risk management would not only ensure that credit unions maintain their operational continuity, but also that they can contribute optimally to the financial recovery of their communities.

Additionally, reliable disaster recovery solutions have become essential to counter the significant risks of data loss during severe climatic events. These solutions bring about a high level of data protection and ensure credit unions maintain the trust of their members through consistent service, even in the face of a disaster.

Deeper engagement with members regarding climate risks is another aspect of resilience. As credit unions operate on the principle of member services, aligning their strategies with the climate concerns of their clients would undoubtedly bring about cooperative resilience.

The rampant rise of climate risks may seem overwhelming, but the only way out is through. By integrating climate risks into daily operations, aligning with the sustainability goals of their members, and leveraging reliable disaster recovery solutions, credit unions are not just surviving the storm of climate risks but thriving amidst it.

Credit unions are transforming these substantial risks into extraordinary opportunities for resilience, growth, and lasting community impact. By proactively adapting and preparing for climate change, rather than merely reacting to it, credit unions are paving the way for a sustainably resilient future.

Unsurprisingly, in these trying times, building resilience against climate risk is more than a business necessity, it’s a vital part of credit unions’ commitment to their communities, their members, and to a sustainable future.

The Role of Disaster Recovery Solutions in Climate Resiliency

With the probability of climate-related risks becoming more rampant, safeguarding organizational assets, such as crucial data, has never been more essential for credit unions. 

Committed to fortifying credit unions’ resilience, IMS provides reliable disaster recovery solutions that ensure quick restoration after server crashes, human error, malicious activity, or natural disasters. The reliability and support from IMS’ disaster recovery solutions could be a valuable part of your credit union’s strategy to bolster financial resilience and effectively manage climate risks.

Discover IMS’ Disaster Recovery solutions and take a proactive step toward fortifying your organization’s resilience against climate risks.

10 Strategies for Boosting Credit Union Cyber Hygiene

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As we recognize Cybersecurity Awareness Month, there’s no better time to reflect on why cybersecurity matters to the credit union community. Today’s interconnected world means there are near-infinite possibilities for credit union growth and member engagement. However, it also presents vast challenges, especially regarding credit union cyber hygiene. Threats from cybercriminals targeting financial institutions are constantly escalating, posing significant risks to sensitive member data and financial operations.

This blog aims to empower credit union leaders and IT professionals with effective strategies to bolster their institution’s cybersecurity efforts. By taking a proactive approach, you can considerably reduce the likelihood of a breach and protect your credit union.

Credit Union Cyber Hygiene: Safeguarding Member Data

The stakes are undeniably high. Did you know that the annual financial risks due to cyber threats can range from $190,000 for small credit unions to $1.2 million for large credit unions?  

Business email compromise schemes are by far the costliest financial cybercrime. According to research, victims of email compromise reported approximately $2.4 billion in losses in 2021 alone. These numbers underscore the importance of robust cyber hygiene practices for credit unions. Beyond the financial impact, consider the cost to your institution’s reputation, the potential loss of members, and the operational disruptions.

These trends cannot be ignored, and while daunting, they serve as catalysts for every credit union to prioritize its cybersecurity posture and scale up its defenses. Let’s take a look at 10 strategies for boosting your credit union cyber hygiene:

1. Perform Regular Audits and Assessments

Implementing rigorous audits and assessments will help identify vulnerabilities in your credit union’s security infrastructure. Routine assessments ensure proper security measures are in place and protocols remain updated when changes are made to the IT environment. Also, continuously examining server and workstation logs can effectively identify suspicious activities.

2. Educate Employees on Cyber Hygiene

Employees often constitute the first line of defense against cyber threats. Training is crucial to equip them with knowledge and practical skills to recognize and prevent phishing attacks, ransomware, and malicious downloads. Encourage safe practices, such as strong password management, to mitigate risks arising from human error.

3. Develop a Comprehensive Security Policy

Develop a comprehensive security policy addressing the credit union’s IT infrastructure, user authentication protocols, and data classification. This policy should outline procedures for reporting security incidents, handling sensitive information, and monitoring third-party service providers to ensure they adhere to data protection standards.

4. Deploy Multi-layered Security Measures

Implementing a multi-layered security approach enhances your credit union’s ability to withstand various threats and attacks. Deploying a combination of firewalls, intrusion detection and prevention systems (IDPS), email filtering, and spam protection reinforces security measures and ensures the swift detection of cyber threats.

5. Keep Hardware and Software Up-to-date

Software and firmware updates are essential to patch vulnerabilities and exploit loopholes that hackers use to infiltrate networks. Implement a systematic approach to managing updates, establishing clear patch timelines, and prioritizing the most critical vulnerabilities.

6. Optimize IT Utilization

Cyber resilience in credit unions can be substantially improved through the diligent use of technologies. While certain programs or infrastructure such as Microsoft 365 can bring significant benefits to credit unions, there is always a need for a proper understanding of security recommendations and best practices.

7. Secure The Cloud

The transition to cloud computing offers significant benefits, such as cost-saving on data storage and streamlined operations. However, the security of digital assets in the cloud remains a top concern. Credit unions should securely configure cloud services, encrypt sensitive data, and restrict access to authorized personnel to mitigate cloud-related risks.

8. Monitor Vendor Security and Risk Management

Credit unions often rely on third-party vendors to provide essential services and support operations. It’s crucial to diligently assess vendors’ security standards and risk management practices to ensure they align with your credit union’s expectations. Regular vendor audits and thorough risk assessments will strengthen your institution’s overall cyber hygiene.

9. Implement Robust Authentication Practices

Implement strong authentication mechanisms such as multi-factor authentication (MFA) to bolster access security for members and internal employees. MFA provides an additional layer of security beyond passwords and significantly reduces the risk of unauthorized access to sensitive information.

10. Plan for Disaster Recovery and Business Continuity

The ability to quickly recover from a cyber attack or security incident is crucial to maintaining a credit union’s operations and reputation. Develop a comprehensive disaster recovery and business continuity plan that includes frequent data backups, off-site storage of critical data, and protocols for resuming operations in case of a breach.

Elevating Credit Union Cyber Hygiene with Virtual Private Cloud Services

Protecting your credit union from cyber threats is an ongoing and evolving endeavor, necessitating a comprehensive and proactive approach. Implementing these strategies will help to significantly improve your credit union’s cyber hygiene, reducing the likelihood of a cyberattack and mitigating its impact if it does occur. By continuously monitoring and evaluating your institution’s security posture, you can stay ahead of threats and protect sensitive member data, ensuring trust and confidence in your credit union.

Partnering with a leading IT service provider like IMS can significantly streamline your credit union’s path to robust cybersecurity. Our Virtual Private Cloud Services — including backup, disaster recovery, Infrastructure-as-a-Service, compliance, and more — provide a comprehensive solution tailored specifically for credit unions. Connect with IMS to explore how we can help safeguard and empower your credit union with our industry-leading IT solutions.

Silicon Valley Bank Collapse: 4 Takeaways

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Silicon Valley Bank is one of the most prominent financial institutions in the tech industry, providing banking services to startups and venture capitalists. Recently, the bank experienced a security incident that affected its clients’ sensitive information. This incident has raised concerns among Silicon Valley Bank’s customers and other businesses alike.

We will examine the key takeaways from the Silicon Valley Bank collapse and provide insights on how businesses can better protect their data. Whether you are a startup, investor, or any other stakeholder in the tech industry, it is crucial to understand what happened at Silicon Valley Bank and how to prevent similar incidents from occurring in your organization.

Let’s dive into what we know about this event so we can learn from it.

Silicon Valley Bank Incident Is Not an Indicator of Widespread Financial Collapse

Whether you are serving credit union members in the California markets, have clients who finance tech startups, or don’t have anything in common with SVB, your members may still be concerned.

So, we first want to look at the core issue behind the Silicon Valley Bank incident. By many accounts like this one from the Kenan Institute of Private Enterprise, SVB suffered from mismanagement of its balance sheet.

The Silicon Valley Bank assets were long-term in nature but their liabilities were mostly short-term in the form of demand deposits, which isn’t wholly unusual for financial institutions. But the nature of their business – having served mostly tech startups – meant that their assets were more sensitive to interest rate changes. And we saw some record-breaking interest rate changes in 2022.

SVB was operating with a larger-than-normal amount if uninsured deposits and, when hit with an unexpectedly high volume of withdrawals from these uninsured depositors in less than 24 hours, more than 90% of the bank’s total deposit base became a liability that was coming due immediately, so to speak.

There were several ways to mitigate these fluctuations, and in fact, most well-managed financial institutions (like yours) do just that. But because the nature of banking is often hard for your members to conceptualize – and personal finances alone are difficult to manage without proper education – you may have noticed your teams encountering more members with worries about the safety of their assets.

Because of that, we want to share some of the biggest takeaways banks and credit unions can glean from the SVB fallout.

Focus on Difference Messaging

The Credit Union Times recently shared an article about how CUs can re-educate members on some of the biggest differences between banks and credit unions.

Credit unions should share insights about how they accept deposits, and then nearly always turn around and reinvest those funds into local communities.

Leaning heavily into the non-profit nature of credit unions versus private banking services can help bridge the trust gap that has been created for banking members all over the United States. It’s important right now to instruct your front-facing staff members to take their time to reassure your members that their funds are safe.

Credit unions are, at their core, agents of growth and financial wellness for their members and the larger communities that they serve – sharing the regulatory and insurance-related protections your CU has in place will help members maintain peace of mind knowing their funds are safe, no matter what happens.

Warnings about Cryptocurrency from NCUA Were Warranted

Many professionals within the American banking system and industry had strong opinions about the NCUA and its recommendations for a cautious approach when it comes to cryptocurrency.

As a new form of trending currency as well as financial and investment opportunities, SVB worked closely among startups and crypto enthusiasts. While this in and of itself isn’t inherently incorrect, it’s also a big leap to endorse new assets and banking trends, especially since economic stability since the onset of the COVID-19 pandemic has been harder to predict.

Single-Sector Business Isn’t Dooming Any FIs

Yes, part of the problem with SVB was the lack of diverse business – it was a bank that catered to a specific market and industry. But you may be thinking, “Aren’t there many instances of banks and credit unions keeping their business concentrated on a specific industry or region?” and yes, there are.

So it’s important to note that SVB was concentrated in such a way that it only did business in highly volatile markets. It catered mostly to venture capital-backed startups in tech and healthcare, and only in the Northern region of California.

Similarly, the behavior of SVB’s clients differs from the average banking member base in America. SVB’s deposits often far outweighed the demand for loans, and that was coupled with the bank’s tendency to invest in securities with long-dated maturities. Then, when interest rates rose, these long-term bonds lost much of their value.

Essentially, their narrow focus, coupled with economic factors and underestimation of their need for liquid assets is what created a perfect firestorm for Silicon Valley Bank.

So how do you communicate this into a solid strategy for helping your credit union members? Remember that regulations and compliance with governing bodies is the bare minimum. You can always put extra precautions in place, especially in this post-COVID landscape.

Diversification in the industries your CU serves isn’t a cure-all for preventing bank failure. It is most certainly something to keep an eye on, but with strong financial management practices in place, you can communicate to your members that their funds are not in danger of disappearing with a simple economic shift or downturn.

Reliability and Trust are Indispensable

Bank and credit union members are looking for safety in the wake of SVB and other financial uncertainties. And if they can’t trust your financial institution to help them weather a crisis because you are the one creating that crisis for them, you may never be able to recover that trust once it’s lost.

Credit unions already have a leg up on big banks when it comes to providing a satisfying member experience. And your member experience should always be coupled with top-tier backend programs and protocols.

That’s why IMS offers IaaS (Infrastructure-as-a-Service) to help you reduce expenses by eliminating the cost and headache that comes with setting up and managing your own on-site data center.

Our IaaS offering is enterprise-grade and cloud-based, built to meet the needs of your organization as it grows and changes.

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 Benefits of Data Discovery

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Like any business, a credit union’s data is an important asset for its operations. But if you don’t have the ability or expertise to analyze that data and use it effectively, you’re just sitting in a library waiting for the books to teach you something without you ever opening one.

Data discovery is the process of analyzing your credit union’s data using visual aids and other tools that can help those in your business who are less technologically inclined understand the insights housed within that collection of data. The insights gleaned from good data discovery can help your credit union’s bottom line and your employee performance, and even member satisfaction.

There are many reasons why data discovery is essential to the growth and success of your credit union operations. Let’s talk about some of the biggest benefits of data discovery for your credit union.

You Can Better Understand Your Credit Union Data Logistics

One of the top benefits of data discovery is the knowledge you, your employees, and even your board of Directors will gain on the logistics of your credit union data.

Much like the concept of “the Internet,” how, why, and where your data is stored and used can be a difficult concept to grasp, even though you are likely using or interacting with that data every day.

With data discovery, you can understand where all your different data types are stored and who has access to them. This aids in security matters, as well as productivity. One of the easiest ways to lose momentum in a work environment is to not have the tools or resources you need to complete your tasks.

You can also know which data is being transmitted, how it’s being moved around, and over which channels in your technology network. Data quality starts with data inventory, and a good data discovery tool can help with both of those things.

Data Discovery Reduces Inconsistencies Caused by Multiple Information Silos

Your credit union likely stores and shares information across multiple information silos. Think of it as a filing cabinet system. While the information in these silos may be organized, they aren’t all housed in the same data unit.

These information silos can create serious data issues as you try to aggregate the data you have stored across them all. Inconsistencies in your systems can lead to issues with duplicate information, incorrect versions of dated data, and more. The ability to reconcile these information silos and the data within them is important to your credit union when it comes to keeping data up to date and consistent.

This is even more true now that we are in the age of remote work. If your information silos don’t sync up, you could have staff members or credit union members working off old or incorrect data.

Competitive Advantage Comes from Data-Driven Approaches

The biggest benefits of data discovery come from the competitive advantages you can glean from good data. The days of blanket marketing ads that target whole regions – and even countries – are long gone.

Your approach to data discovery is one of the most valuable tools you can use to grow your credit union member base, offer targeted and high-demand products and services, and teach your staff how to meet the needs of your members and the greater community.

Much like the data housed in information silos must be pulled together, so must your data discovery tool enable you to find the insights that help your credit union operations improve.

In many businesses, certain departments know more (or less) about different initiatives and workflows than others. When this occurs, your operations can lose productivity and even credit union members as you try to hunt down the data and insights you need to form a clear picture of your next steps. Data discovery is a great way to close those gaps in your data analysis.

Data discovery helps drive your understanding of your credit union’s competitive advantages. When you’re able to look at the big picture your full range of data makes, you can create solutions that not only benefit your credit union’s business but can also create differentiators in your market. Data discovery is what positions credit unions to better service specific people and communities than big banks and universal automation do.

IMS Data Archiver: The Key to CU Data Discovery Done Right

The IMS Data Archiver is a powerful data discovery tool that has been tailored to credit union needs. Simple and cost-effective, IMS Data Archiver can save you up to 80% of your primary storage costs, reduce backup times, and can help you manage unlimited file servers in a distributed environment with zero end-user disruption.

This tool includes several powerful tools, a few of which are:

  • Ransomware protection
  • Data life cycle management
  • Built-in data visualization tools
  • Multi-remote site management
  • Data compliance and e-discovery tools
  • Data compression and de-duplication

Check out the data discovery tool and other IMS protection and compliance services on our website or give us a call today.

Hidden Ways Your Credit Union Data Is at Risk

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The importance of protecting your credit union data can’t be overstated. Unfortunately, there are many ways your data can be stolen, corrupted, or lost. From less-than-vigilant password protocols to accidental deletions, malware, and more – each of these threats presents unique challenges and accesses specific vulnerabilities in your cybersecurity and other data systems and puts your data at risk.

There are also many undetected ways you put your data at risk. Many loopholes and vulnerabilities are often found after they’ve been exploited if you don’t know where to look or what to look for. Let’s discuss some of the hidden ways your credit union data is at risk.

Personal Device Usage

Personal devices are used for business projects and functions during working hours but are not company property. There are tons of different types of personal devices, and most of them are connected. This includes things like smartphones, laptops and tablets, smartwatches and accessories, and more.

When you allow your employees to use their own devices to carry out credit union business, you are putting your data at risk of being lost or stolen. Personal devices also aren’t held to the same security and update standards as your company-specific technology.

Device management is a major piece of post-COVID cybersecurity. Each device that connects to your credit union’s network is creating opportunities for breaches because it puts your CU and your member information in more hands, and not all of those hands will treat that data correctly. Whether the data is lost through malicious activities or unintentional employee mishandling, it’s important to think through the amount and types of devices that you want to be able to connect to your data and network systems.

Insufficient Backup Policies

Backups are diverse and indispensable tools for safeguarding your credit union data. But that doesn’t mean every backup works the same way.

When you are exploring and auditing your backup policies, it’s important to not only think about the time and convenience of the backup functions – making sure your backups are run regularly, capturing all your credit union data, and not hindering other network functions.

But it is also wise to think about how long it will take for your backups to restore your data. If an onsite server fails, do you know how long it will take for your offsite backups to restore it? Will it take a full 24 hours? Do you have adequate offsite backups?

The mistake here is installing backup software or protocols and then forgetting about it. These systems, though they should never fail, should be regularly checked to ensure that you are capturing all the data you need to be backing up. Business processes change, and IT protocols are always evolving.

IMS offers backup services tailored specifically to credit unions. That means these systems were built with your specific data types in mind. Your data backups are automated and your data is secured and stored offsite at an IMS data center.

Digital Supply Chain Weaknesses

The digital supply chain is essentially the network that is created throughout the supply chain to increase integration, dynamic processes, and predictive supply chain operations.

If you have third-party software that you used to create your credit union’s app, which then supplies products and services to your enrolled members, this is just one example of the different ways digital content and programming can intersect with and affect your cybersecurity and your credit union data. For example, a breach in 2021 involved the Kaseya supply chain. Kaseya offers remote management services that many credit unions in the USA use.

Understaffed and Overburdened IT Staff

Credit unions aren’t like big banks. Some are standalone small businesses with a handful of staff members that are diligently serving their communities. Other credit unions are large and can be run much like a corporation.

But right now, there are staffing shortages everywhere. The pandemic has caused what many are calling the Great Resignation, and that means more people than ever are overburdened at work.

And while this is a big hurdle to overcome no matter what industry or department you work in, IT shortages can be much more expensive than just the overtime and loss of productivity costs.

If your IT department isn’t able to keep up with all the day-to-day maintenance, employee and member requests, and other top priority items, something is going to eventually slip through the cracks.

The hiring shortages and issues aren’t going away quickly, and that means technology-based solutions should be your next step. Luckily, that’s what IMS has been doing for credit unions and credit union data for years.

Combat Known and Unknown Data Threats with IMS Today

IMS is the leading data management, backup, disaster recovery, and IaaS service provider for credit unions. Whether you are trying to increase protection from bad actors, unhappy employees, or unprecedented threats like staff mistakes and natural disasters, IMS can help.

Our private cloud services have been designed with credit union data in mind:

With these and other services, tailored specifically to your CU needs, IMS is the perfect solution to help assuage your data fears as we become increasingly reliant on technology and stored data solutions.