Ransomware Recovery: Strategies for Ensuring FI Business Continuity

 

In December 2023, a devastating ransomware attack targeted the cloud services provider Ongoing Operations, causing a widespread outage that impacted numerous credit unions. This incident served as a wake-up call for financial institutions and credit union leaders, highlighting the urgent need for robust business continuity strategies in the face of evolving cyber threats. Today we will explore the key steps credit unions can take to establish business continuity in the aftermath of a ransomware attack, ensuring the resiliency and security of their operations.

Understanding the Impact of a Ransomware Attack and the Importance of Business Continuity

A ransomware attack is a malicious cyber attack in which cybercriminals infiltrate a network, encrypt data, and demand a ransom payment in exchange for the decryption key. The consequences of a successful ransomware attack can be severe, ranging from financial losses and operational disruptions to reputational damage and legal liabilities. For credit unions, the impact of a ransomware attack can be particularly devastating, as it can compromise sensitive customer data and disrupt critical financial services.

The Ongoing Operations Ransomware Attack

In December 2023, the credit union industry experienced a major ransomware attack targeting Ongoing Operations, a prominent cloud services provider. This attack resulted in a widespread outage that affected numerous credit unions, causing disruptions to online banking services, member communication, and internal operations. The incident served as a stark reminder of the vulnerabilities faced by credit unions in the digital age and the need for proactive measures to mitigate the risks associated with ransomware attacks.

Building Resiliency Against Ransomware Attacks

To establish business continuity in the aftermath of a ransomware attack, credit unions must adopt a multi-layered approach that encompasses robust cybersecurity measures, comprehensive backup and disaster recovery solutions, and proactive incident response strategies. Let’s explore these key elements in detail.

1. Strengthening Cybersecurity Measures

Effective cybersecurity measures form the foundation of any business continuity strategy. Credit unions should implement a comprehensive set of cybersecurity controls to protect their networks, systems, and data from ransomware attacks. These measures may include:

  • Endpoint Protection: Deploying advanced endpoint protection solutions to detect and block malicious software before it can infect the network.
  • Network Segmentation: Implementing network segmentation to isolate critical systems and data from potential threats, limiting the spread of ransomware.
  • User Awareness Training: Conducting regular cybersecurity awareness training programs to educate employees about the risks associated with phishing emails, suspicious links, and other common attack vectors.
  • Patch Management: Keeping systems and software up to date with the latest security patches to address known vulnerabilities that can be exploited by ransomware.

By strengthening their cybersecurity measures, credit unions can significantly reduce the risk of a successful ransomware attack and enhance their overall resiliency.

2. Implementing Anomaly Detection Systems

Anomaly detection systems such as IMS’ Polaris Radar play a crucial role in early detection and prevention of ransomware attacks. These systems use advanced machine learning algorithms and behavioral analytics to identify abnormal patterns and activities that may indicate the presence of ransomware or other malicious activities. By monitoring network traffic, user behaviors, and file activity, anomaly detection systems can quickly detect and respond to potential threats, minimizing the impact of a ransomware attack.

3. Backup and Disaster Recovery Solutions

Having robust backup and disaster recovery programs is essential for establishing business continuity in the aftermath of a ransomware attack. Credit unions should implement regular, automated backups of critical data and systems. These backups should be stored in secure, offsite locations to ensure their availability in the event of a ransomware attack or other data loss incidents.

Additionally, credit unions should regularly test their backup and disaster recovery processes to ensure their effectiveness and reliability. Conducting mock recovery exercises can help identify any gaps or vulnerabilities in the backup strategy, allowing credit unions to make necessary improvements and adjustments.

4. Incident Response and Recovery Planning

In the event of a ransomware attack, a well-defined incident response plan is crucial for minimizing the impact and restoring normal operations as quickly as possible. Credit unions should develop a comprehensive incident response plan that outlines the roles, responsibilities, and communication protocols for responding to a ransomware attack. This plan should include:

  • Incident Identification and Reporting: Clearly defining the process for identifying and reporting a ransomware attack to the appropriate stakeholders, including internal IT teams, management, and external incident response partners.
  • Containment and Mitigation: Outlining the steps to contain and mitigate the impact of the ransomware attack, such as isolating affected systems, disconnecting them from the network, and implementing temporary measures to restore critical services.
  • Communication and Notification: Establishing communication channels and protocols for notifying affected parties, such as employees, customers, regulatory authorities, and law enforcement agencies. Timely and transparent communication is crucial for maintaining trust and managing the reputational risks associated with a ransomware attack.
  • Recovery and Restoration: Detailing the procedures for recovering encrypted data, restoring affected systems from backups, and implementing additional security measures to prevent future attacks.

By having a well-prepared incident response plan in place, credit unions can minimize the downtime and financial losses associated with a ransomware attack, allowing them to recover and resume normal operations swiftly.

Securing Business Continuity: Resilient Strategies

In today’s digital landscape, credit unions face increasing threats from ransomware attacks. Establishing business continuity in the aftermath of such attacks requires a comprehensive approach that combines robust cybersecurity measures, effective anomaly detection systems, reliable backup and disaster recovery solutions, and well-defined incident response and recovery planning. By prioritizing resiliency and taking proactive steps to mitigate the risks associated with ransomware attacks, credit unions can protect their operations, safeguard sensitive data, and maintain the trust of their members.

At IMS, we understand the importance of establishing business continuity in the face of evolving cyber threats. Our comprehensive suite of anomaly detection, backup, and disaster recovery solutions are designed to help credit unions increase their resiliency and protect against ransomware attacks. Connect with us to learn more about how IMS can support your credit union’s business continuity efforts.


Risk Management Strategies for Credit Unions

 

With fintech and general technology evolving at their current pace, credit unions must adopt effective risk management strategies that can safeguard their stability and promote growth. The economy’s uncertainty and volatility have transformed how the financial industry perceives risk, making it imperative for credit union boards and management to proactively identify and plan for potential risks. Today we’ll be exploring the importance of risk management for credit unions, examining the internal and external risk factors they face, and discussing strategies to effectively manage these risks.

The Importance of Risk Management for Credit Unions

In the past, credit unions relied heavily on financial projections to guide their operations. However, in today’s economy, financial projections alone are no longer sufficient to ensure the success of credit unions. To mitigate potential hazards and protect their business goals and objectives, credit union boards must have a comprehensive understanding of both short-term and long-term risks. While long-term risks are crucial, it is essential not to overlook the potential impact of short-term risks, as they can escalate into significant challenges over time.

Credit unions face a wide range of risks, each posing unique challenges and requiring careful consideration and proactive management. By being equipped with the knowledge of these risks, credit unions can develop risk management plans that minimize their impact when they occur. This proactive stance not only safeguards the credit union’s assets but also strengthens its overall stability and growth.

Internal and External Risk Factors for Credit Unions

To manage risks effectively, credit union leadership should first identify and understand internal and external factors that could impact their financial stability and operations. Recognizing these risk factors allows credit unions to develop targeted risk management strategies to mitigate their potential impact.

Internal Risk Factors

  1. Credit Risk: This risk arises from borrowers or members failing to repay their loans or debts, leading to asset quality deterioration and financial losses.
  2. Operational Risk: Inadequate or failed internal processes, human errors, technological failures, fraud, and other disruptions can result in financial losses or damage to the credit union’s reputation.
  3. Compliance and Regulatory Risk: Credit unions must adhere to numerous laws, regulations, and industry standards. Failure to comply with these requirements can lead to penalties, legal actions, or reputational damage.
  4. Liquidity Risk: The risk of not having sufficient liquid assets to meet short-term obligations, which could impact the credit union’s ability to function effectively and serve its members.
  5. Interest Rate Risk: Fluctuations in interest rates can affect profitability and the value of assets and liabilities, as credit unions often have a significant portion of their assets and liabilities tied to interest rates.
  6. Strategic Risk: This refers to the risk associated with the credit union’s strategic decisions, such as entering new markets, introducing new products, or expanding services.
  7. Reputation Risk: Negative publicity, customer dissatisfaction, or public perception issues can damage the credit union’s reputation and erode member trust.

External Risk Factors

  1. Economic Conditions: Changes in the broader economic environment, such as economic downturns, inflation, or recession, can impact borrowers’ ability to repay loans and affect the credit union’s financial performance.
  2. Market Risk: Fluctuations in financial markets, including interest rates, foreign exchange rates, and stock prices, can impact the credit union’s investment portfolio and overall financial health.
  3. Regulatory Environment: Changes in laws, regulations, or policies can impose new compliance requirements or restrict certain activities, affecting the credit union’s operations and profitability.
  4. Technological Advancements and Cybersecurity: While technological advancements can enhance competitiveness, they also introduce new cybersecurity threats and vulnerabilities that credit unions must address. Boosting cyber hygiene can help mitigate this risk.
  5. Competitive Landscape: Credit unions face competition not only from other financial institutions but also from emerging fintech companies, which can affect market share and member acquisition.
  6. Natural Disasters and Catastrophic Events: Natural disasters or catastrophic events can disrupt operations, damage physical assets, and affect the credit union’s ability to serve its members.

Understanding and effectively managing these internal and external risk factors is crucial for the long-term success and sustainability of credit unions. Credit union leadership must work closely with management to develop robust strategies that mitigate these risks and ensure the credit union’s stability and growth.

Key Risk Management Tactics for Credit Unions

To effectively address potential risks, credit unions can employ various risk management tactics. These tactics aim to identify, analyze, and prioritize risks, as well as develop proactive measures to prevent losses and recover from any adverse events. Here are some key risk management tactics for credit unions:

  1. Utilize Available Data for Decision Making: Credit union boards should leverage historical data to make informed decisions related to risk management. Analyzing past risks and their impacts provides valuable insights for managing future risks.
  2. Track Key Risk Indicators (KRIs): Tracking KRIs allows credit union boards to identify early warning signs of risk exposures. KRIs are metrics used to manage risks and assess the potential consequences of those risks.
  3. Employ Technology to Manage Regulatory Compliance: Credit unions can streamline their risk management processes and optimize staff allocation by utilizing technology. This helps ensure compliance with regulatory requirements while reducing manual, time-consuming tasks.
  4. Proactively Manage Collections: Investing in technology to streamline the collections process can make it more effective and efficient. Offering self-service options for borrowers can improve response rates and minimize credit risks.
  5. Leverage Data Insight: Data mining programs can help credit unions maximize the value of the data they already collect. These programs provide insights into how to better respond to members’ needs and address potential risks.
  6. Stay Vigilant of Regulatory Changes: Credit union leadership needs to stay informed about changes in laws and regulations that may impact their operations. Maintaining compliance is essential to avoid penalties and legal actions.
  7. Collaborate with Other Financial Institutions: Sharing resources and collaborating with other financial institutions can help credit unions stay competitive. This is particularly beneficial when retaining repossession agents or dealing with shared third-party vendor services.
  8. Optimize Risk Services: Utilizing predictive modeling, insurance tracking, location services, and loss mitigation can help credit unions reduce risks and plan for the future.

By implementing these risk management tactics, credit unions can enhance their ability to identify, assess, and mitigate potential risks, ensuring the long-term stability and growth of their operations.

The Benefits of a Risk Management Plan

A well-developed risk management plan offers numerous benefits to credit unions. These benefits include:

  1. Resource Protection: Risk management plans help protect valuable resources such as people, property, assets, time, and income. They ensure that credit union facilities and environments are safe for staff, customers, and visitors.
  2. Strengthened Stability: Risk management plans safeguard people, the environment, and credit union assets from harm, thereby strengthening the overall stability of operations.
  3. Reduced Legal Liability: A competent risk management plan can reduce legal liability and the threat of potential litigation. By identifying and mitigating risks, credit unions can minimize the likelihood of facing legal challenges.
  4. Cost-Effective Insurance: Risk management plans allow credit unions to work with insurance companies to define their insurance needs while keeping premiums as low as possible. This ensures cost-effective insurance coverage without compromising on protection.

Credit unions face various risks from both internal and external sources, and it’s crucial to prioritize risk management for their long-term success. As credit unions address these challenges, considering backup and disaster recovery solutions becomes essential to secure and maintain their operations. 

IMS offers specialized backup and disaster recovery services for financial institutions, providing local backup options and secure off-site replication. This ensures that credit unions are safeguarded against potential disasters or cyber threats, allowing for quick and efficient recovery to minimize disruptions. 

Adopting sound risk management strategies is key for credit unions to navigate the complexities of the financial industry. Let’s talk about how our solutions can help proactively manage internal and external risks, and empower your credit union to thrive in an ever-changing financial landscape.


How Artificial Intelligence is Transforming Credit Unions

 

Artificial intelligence (AI) has become a part of our daily lives. More often than not, the average consumer isn’t even aware of how deeply integrated it already is. From voice assistants to recommendation algorithms, AI is making its mark on industries and influencing customer expectations. Financial institutions, including credit unions, are also adopting AI to meet these changing demands and stay competitive. Let’s explore how credit unions, even with smaller budgets and teams, can effectively leverage AI to drive success in the digital age.

The Importance of Artificial Intelligence in Credit Union Operations

As credit unions navigate the challenges of the modern financial landscape, AI offers a host of benefits. By harnessing the power of AI, credit unions can streamline operations, enhance member experiences, and make data-driven decisions that drive growth. Take a look at some key areas where AI can make a significant impact on your credit union:

1. Personalized Member Experiences

AI-powered technologies, such as chatbots and virtual assistants, enable credit unions to provide personalized and efficient member experiences. These intelligent systems can handle routine member queries, assist with account management, and even offer financial advice tailored to individual needs. By leveraging AI, credit unions can deliver exceptional member service, building trust and loyalty in an increasingly digital world.

2. Fraud Detection and Prevention

Fraud detection and prevention are key concerns for credit unions. AI algorithms can analyze vast amounts of data to identify patterns and anomalies that indicate potential fraudulent activity. Machine learning algorithms can continuously learn and adapt to new fraud patterns, enhancing the accuracy and efficiency of fraud detection systems. By leveraging AI in fraud prevention, credit unions can safeguard their members’ assets and protect their reputation.

3. Risk Management and Compliance

Credit unions face various risks, including credit risk, compliance risk, and reputational risk. AI-powered risk management systems can analyze extensive datasets, identify potential risks, and provide proactive solutions to mitigate these risks. Additionally, AI can help credit unions stay updated with changing regulatory requirements, ensuring compliance and avoiding penalties. By adopting AI-based risk management solutions, credit unions can enhance their strategic decision-making processes and protect their long-term sustainability.

4. Data Analysis and Decision-Making

Data analysis is crucial for credit unions to gain insights into member behavior, market trends, and operational efficiency. AI-powered analytics tools can process vast amounts of data quickly and accurately, uncovering meaningful patterns and trends. This empowers credit unions to make data-driven decisions, tailor their products and services to member needs, and identify new growth opportunities. By leveraging AI in data analysis, credit unions can stay ahead of the competition and drive business success.

Overcoming Challenges: How Credit Unions Can Embrace Artificial Intelligence

While AI offers immense potential for credit unions, there are challenges to consider, such as limited budgets and resources. However, with a strategic approach, credit unions can effectively embrace AI and compete in the evolving digital landscape. Here are some strategies to consider:

1. Collaborate with Fintech Partners

Credit unions can collaborate with fintech partners specializing in AI solutions. These partnerships can provide access to cutting-edge AI technologies without the need for significant upfront investments. By leveraging the expertise of fintech partners, credit unions can navigate the complexities of AI implementation and ensure successful integration into their operations.

2. Start Small and Scale

Implementing AI solutions can be overwhelming, especially for credit unions with limited resources. It’s essential to start small and focus on specific use cases that align with the credit union’s goals and member needs. By starting with manageable projects, credit unions can gain valuable experience and gradually expand their AI capabilities.

3. Invest in Employee Training

Successful AI implementation requires a workforce equipped with the necessary skills and knowledge. Credit unions should invest in training programs to upskill their employees and build an AI-ready workforce. This investment not only enhances the credit union’s AI capabilities but also empowers employees to embrace and leverage AI technologies effectively.

4. Prioritize Data Security and Privacy

As credit unions adopt AI, ensuring data security and privacy is paramount. Credit unions must comply with data protection regulations and implement robust security measures to safeguard member information. By prioritizing data security and privacy, credit unions can build trust with their members and maintain a strong reputation.

Keep Sensitive Data Safe Alongside AI Implementation with IMS 

As credit unions embrace the boundless potential of artificial intelligence to personalize member experiences, fortify against fraud, and navigate intricate risks, they require a strategic and resilient safeguard. 

IMS’s Polaris Radar provides a crucial layer of protection through its advanced anomaly detection service, ensuring rapid recovery and bolstering credit unions’ security posture. This isn’t just about adopting AI — it’s also about securing your credit union with cutting-edge resilience. Connect with IMS to learn how our anomaly detection services can empower your credit union in providing secure, community-focused banking experiences.


10 Credit Union IT Priorities for 2024: Navigating Digital Challenges

 

As the year comes to a close, credit unions are gearing up to face the challenges and opportunities that lie ahead in 2024. In an increasingly digital world, credit unions must prioritize their digital efforts to stay competitive, meet member expectations, and navigate the evolving financial landscape. This blog post explores the top credit union IT priorities in 2024, focusing on the challenges they’re expected to face and the strategies they can employ to thrive in the digital age.

1. Embracing Digital Transformation

In today’s fast-paced world, digital banking has become a necessity. Credit union members expect seamless online banking experiences, including mobile apps, 24/7 service, and digital transaction processing. To meet these expectations, credit unions must embrace digital transformation. This involves investing in technology and training to provide members with the convenience and accessibility they demand.

One crucial aspect of digital transformation is the integration of artificial intelligence (AI) into credit union operations. AI technologies, such as generative and conversational AI, can automate customer service, increase sales and conversions, streamline member experiences, and reduce call center workload. By leveraging AI, credit unions can enhance member engagement and deliver personalized services at scale.

2. Ensuring Regulatory Compliance

The financial sector is heavily regulated, and credit unions are no exception. Staying compliant with ever-changing local, federal, and international regulations requires a dedicated focus on regulatory compliance. Credit unions must allocate resources for ongoing training, maintain good data practices, and implement compliance programs to ensure they meet their obligations. By prioritizing regulatory compliance, credit unions can foster trust and confidence among their members.

3. Enhancing Cybersecurity Measures

As digital banking becomes more prevalent, credit unions face increased cybersecurity threats. Cybercriminals target financial institutions of all sizes, and credit unions, with their smaller IT teams, may be perceived as easier targets. Protecting members’ sensitive data and maintaining trust is of paramount importance. Credit unions must invest in robust cybersecurity measures, including advanced threat prevention systems, anomaly detection, regular security audits, employee training, and incident response plans. By staying vigilant and proactive, credit unions can safeguard their members’ information and maintain a secure banking environment.

4. Competing with Larger Banks and Fintechs

Credit unions often find themselves competing against larger banks and fintech companies that have significant resources at their disposal. To remain competitive, credit unions must leverage their unique strengths, such as their local presence, personalized service, and community focus. Credit unions should also explore partnerships with fintech companies like IMS to enhance their technological capabilities and offer innovative products and services. By embracing collaboration and innovation, credit unions can carve out their niche in the financial services landscape.

5. Increasing Membership Growth and Awareness

While credit unions offer numerous advantages over traditional banks, many potential members are unaware of these benefits. Credit unions must invest in targeted marketing and education efforts to raise awareness about their services and attract new members. Collaborating with community organizations, leveraging social media platforms, and participating in local events can help credit unions reach a broader audience and highlight their value proposition. By effectively communicating their unique benefits, credit unions can drive membership growth and expand their reach.

6. Engaging Younger Members

One challenge that credit unions face is the aging membership demographic. To ensure long-term sustainability, credit unions must engage younger members and tailor their services to meet their preferences. Younger generations have higher expectations for digital experiences, so credit unions must invest in user-friendly online and mobile banking platforms. Offering personalized financial advice, educational resources, and innovative product offerings can also attract and retain younger members. By adapting to the needs and preferences of younger generations, credit unions can future-proof their member base.

7. Attracting and Retaining Talent

In an increasingly competitive job market, credit unions must prioritize talent acquisition and retention. To attract tech-savvy professionals, credit unions should showcase their commitment to digital transformation, offer training and development opportunities, and provide a positive work environment. Building a strong employer brand and cultivating a culture of innovation can help credit unions attract and retain top talent. By investing in their workforce, credit unions can build a team capable of driving technological advancements and delivering exceptional member experiences.

8. Expanding Service Offerings

Credit union members expect a wide range of services from their financial institutions. To meet these expectations, credit unions should consider diversifying and expanding their service offerings. This may include specialized loans, insurance products, investment advice, and financial planning services. Offering these services digitally or online is a significant leap forward. By providing comprehensive financial solutions, credit unions can become a one-stop shop for their members’ needs and strengthen member loyalty.

9. Streamlining Technological Integration

Integrating new technology solutions into existing infrastructures can be a complex process for credit unions. They must ensure that new systems seamlessly integrate with their legacy systems and workflows. Credit unions should seek technology vendors and partners that offer flexible and scalable virtual cloud solutions. By streamlining technological integration, credit unions can leverage the power of emerging technologies without disrupting their operations.

10. Navigating Economic Uncertainties

Credit unions, like other financial institutions, face economic uncertainties such as recessions, interest rate fluctuations, and geopolitical events. During economic downturns, credit unions must prioritize the stability of their operations, safeguard sensitive financial information, and uphold the confidence of their members. Having a resilient disaster recovery strategy and contingency plans in place is crucial for credit unions to weather these uncertainties. Credit unions should regularly assess their risk exposure, stress test their loan portfolios, and maintain adequate capital reserves. By adopting a proactive approach to risk management, credit unions can mitigate potential financial downturns and ensure their long-term sustainability.

Credit Union IT Priorities: Staying Competitive in the Digital Age

By embracing digital transformation, ensuring regulatory compliance, enhancing cybersecurity measures, and leveraging their unique strengths, credit unions can navigate the challenges ahead. Engaging younger members, attracting and retaining top talent, expanding service offerings, streamlining technological integration, and preparing for economic uncertainties are also essential strategies for credit unions’ success. 

Focus on these key credit union IT priorities this 2024 to thrive in the ever-changing financial services landscape. Connect with IMS today and let’s talk about how we can help you provide your members with personalized, community-focused banking experiences.


The Long-Term Consequences of Credit Union Downtime

 

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

 

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.


Hidden Ways Your Credit Union Data Is at Risk

 

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.


Disaster Recovery Dos & Don’ts

 

Credit unions have had their fair share of setbacks in the last year. However, the recent 4th quarter report from the National Credit Union Administration (NCUA) shows that assets, shares, and deposits grew during the last months of 2021. To capitalize on that momentum, your credit union must continue to provide more on-demand and real-time products and services while you grow your member base.

But you can’t do that without a top-tier disaster recovery plan. But what does a good plan look like? Let’s go through some disaster recovery dos and don’ts.

Do: Set Plans & Goals for Your Disaster Recovery

Every disaster recovery system needs to be tested. And for you to measure how well your test and disaster recovery system work, you need to have something to measure against.

The best way to do that is to identify and set goals for KPIs (key performance indicators). The most common include recovery time objective (the amount of time that can pass before your business has been impacted by the disaster) and recovery point objective (the maximum amount of data that can be lost).

Best practice is to test your disaster recovery and business continuity plans at least once every year. This includes emergency evacuation drills, walkthroughs, and risk assessment reviews along with your recovery plans.

Don’t: Rely on Protecting Just the Basics

It’s important to protect the core components of your business in your disaster recovery plan, including the items that you need for compliance reasons. But that should just be a starting point. As you work on your disaster recovery strategy, it’s important to look at all aspects of your credit union’s operations.

Are there contingencies in place that will allow you to communicate with remote or offsite staff members? Are your software, app, or plugin vendors considered in your plans? Do you have a detailed description of who does what during the disaster?

Even if you don’t prioritize everything on a scale from most important to least, thinking through the intricacies of your credit union’s operations can help you mitigate damage and mobilize support when it’s necessary.

Your disaster recovery plan can consist of several smaller plans based on your credit union’s branches, departments, and even the emergency type.

For example, your IT department may need to have different priorities in different disasters. This can be based on the potential threat to the physical components of your security system versus the digital ones.

Do: Make Your People a Priority

You’d be surprised how many disaster recovery plans go into exquisite detail about the operations and technology considerations, but they leave out the human element.

Many disasters are natural or physical in nature – and that presents many opportunities for your staff to be harmed. Here are a few things to think about as you create your credit union disaster recovery plan:

  • Where are the shelters or gathering areas for things like a fire, flood, tornado, hurricane, or another natural disaster?
  • What is the survival plan for your employees if there is an active shooter?
  • If people are injured, how do you want your teams to help? Which staff members should be prioritized? These questions and plans may need to be augmented by a medical professional’s opinion.
  • Who will contact the authorities in the event of a disaster, accident, or other harmful situation?

You can’t ensure business continuity if you aren’t protecting the ones who are doing that work for you. And don’t forget to make sure that all your employees are able to get to your designated areas without trouble. This includes people with physical disabilities (from limited mobility to deafness or blindness)

Don’t: Forget to Define the Impact of the Disasters You’re Preparing For

You can increase or decrease the scope of your credit union disaster recovery plan to include a business impact analysis.

A business impact analysis can help you measure and prepare for how each different disaster will actually affect your operations. This includes everything from employee tasks that are interrupted or rendered unusable, impact on credit union members and member services, data loss, and more.

Here are some examples.

Let’s say the disaster you are preparing for is a ransomware threat. In the business impact analysis, you’d list the impact of that disaster: data loss, employees unable to access files which lead to lost productivity, corruption of technology and other digital assets.

However, if the disaster is a tornado, the impact is much different: loss or damage of equipment, buildings, etc., potential data loss, information systems going offline, human injury, loss of productivity, member services and experience will suffer.

These impact areas may be different based on the size and operations of your credit union. But a good business impact analysis will not only prepare you for what to do in an emergency, it will also show you what areas will suffer. This gives you insight into what and how you should implement preventative and other measures to create a successful disaster recovery plan.

Worry-Free Disaster Recovery Services

Server crashes, human error, malicious activity, natural disasters – your credit union could succumb to any one of these disasters at any time.

Disaster recovery is an integral part of your business continuity. As more and more people rely on real-time banking technology, any downtime and data loss are major hits to your credit union.

IMS offers worry-free disaster recovery. We help you keep your credit union operational by ensuring your critical servers, branches, and third-party vendor communications are all recovered quickly.


Business Continuity Planning Best Practices

 

We’ve talked previously on our blog about the difference between credit union disaster recovery and business continuity planning. A business continuity plan (BCP) is a series of protocols created to make sure an organization can keep operating during a disaster, and a disaster recovery plan is often a subset of the BCP that specifically plans for recovering lost data and restoring failed infrastructure. But no one could have guessed when we wrote that article in the fall of 2019 that we would have such an unprecedented year in 2020.

Here are some business continuity planning best practices for your credit union.

The Evolution of Business Continuity Planning

Originally, business continuity planning was created to focus on how businesses could plan ahead for natural disasters and similar events – fire, tornadoes, hurricanes, etc. – but it quickly evolved to include cyber events – hackers, file corruption, system bugs, and the like.

Today, business continuity planning is more about assessing threats and risks and creating comprehensive protocols for increasingly complex businesses.

It’s become more about gap analysis and protecting your business than creating a step-by-step plan to merely react to issues that come up.

Document Core Functions – Focus on Details

This may seem like a no-brainer, but one of the first steps to creating a workable and comprehensive business continuity plan is to document the core functions of your credit union. These are the services that are central to your business’s success and that will have the greatest impact on that business, should something happen to your facilities, staff, equipment, or networks.

It’s also important to document the resources that will be required to fill these business functions and roles. The more detailed you can make your plans, the more prepared you will be in the event of a business interruption.

Mature Your Business Continuity Plan

Maturing your business continuity plan is just as important as creating it. Think of it like this: you have to have fire extinguishers inspected and replaced when they expire, right? The same is true for your BCP.

In this digital age, technology changes and upgrades so swiftly that it’s easy to become fatigued trying to keep up. But with business continuity planning, having an outdated plan is just as bad – if not worse – than having no plan at all.

Be sure to review and test your BCP on a regular basis. This means testing and working through all facets of the plan, not just a few items. Practice makes perfect, and spending quality time ensuring your plan is still effective can save you a lot of headaches later.

Develop a Communication Strategy

This goes hand in hand with the last point. Your plan is only as good as the people executing it, so frequent testing and practice drills are great ways to develop helpful and effective communication strategies before you need them.

Taking the time to educate your staff about business continuity planning is a great way to instill these ideas in the company culture, and to smooth out communication issues early on.

Have Offsite, Cloud-Based Backups

We know how important it is to safeguard your member data, especially when disaster strikes. Having cloud-based backups housed offsite is a great way to ensure the integrity of your files without having to worry about the what-ifs.

IMS has virtual private cloud services and solutions like core hosting, virtual desktop, disaster recovery, and more for your credit union. Contact us today for more information.


Protect Your Credit Union From Disasters

 

Though many people like to think spring is the time for most natural disasters like floods and tornadoes, many forget that the warm summer temperatures and dryness of fall can create perfect conditions for tornadoes, fires, and severe thunderstorms in the US. And if this year has taught us anything, it’s that you can never be too prepared.

“Recent events have highlighted the importance for credit unions to perform ongoing reviews of their plans for disaster preparedness and response,” says the National Credit Union Administration’s Chairman JoAnn Johnson. Disaster recovery and disaster planning are important all the time, but the best time to protect yourself and your credit union from them is before that first disaster or close call.

Eliminate Downtime

It’s the worst feeling in the world to be face-to-face or on the phone with a member and you have to tell them, “I’m sorry, our network/system just went down.” The uncertainty and confusion that downtime creates can negatively affect your business, your employees, and your customers.

Any good disaster recovery provider should be able to tell you exactly how they will deal with and minimize downtime in the event of a disaster. Their – and your – top priority should be to minimize downtime and restore business operations promptly.

Offer Real-Time Solutions

Having a disaster recovery system in place prior to “disaster-heavy seasons” (fall and spring) means your data is constantly being backed up and protected, so when disaster strikes, you can begin the recovery process automatically and with little to no data loss.

Serving community members means that losing their data could result in losing their patronage. Any disaster recovery solution you choose should have real-time solutions that are running in the background at all times, giving you constant peace of mind.

Data Center Routing

Disasters don’t just mean a tornado or fire wipes out some or all of your credit union’s physical location. Sometimes, it’s just a quick power outage or a single server crash. Disaster recovery can also include having a data center take the load and carry it while you repair and recover the crashed server. IMS can route anything from a single location to multiple branches of your credit union. Sometimes, disasters are small and isolated, other times they are all-encompassing, and you need solutions in place for issues of any size.

Re-Evaluate and Customize

Putting a disaster recovery plan in place is a great way to protect your credit union, but as 2020 has shown us, something can come out of the blue and create brand new, unheard-of issues. One of the biggest mistakes credit unions make is implementation without re-evaluation.

Putting a fire extinguisher in the office is great – but not testing it for 5 years is not. The same is true with your disaster recovery protocols. Every year, you should evaluate your plans. Does your recovery provider have new or updated solutions that could improve your own strategies? Have you talked to them about customization for your branches in the southeast regions versus those located in “Tornado Alley”? It’s worth your time to think about it.

Protect Your Credit Union Now

IMS offers private cloud services and offsite data storage. It is important for you to safeguard your member data at all times, but especially when your credit union is affected by a disaster.

Contact us to find out how you can protect your credit union and its members with our disaster recovery tools.