Posted by Kevin Hood, CISA, IT Consultant, Credit Union Resources, Inc on 11/17/2017

It’s that time of year again!  All of the Black Friday and Cyber Monday ads are popping up on your news feeds and in your inboxes.  

With more and more people taking advantage of the convenience of online shopping, now is a great time to educate your members on safe online shopping practices.  While online shopping is convenient, it also makes for easy targets by attackers through such means as fake websites, phishing, and targeting unsecure systems.  Here are a few tips to help protect you and your members:

  • First and most importantly, be vigilant when clicking on links in an e-mail or on social media.  If a deal seems “too good to be true,” it usually is.  This type of e-mail or post may be a phishing attempt to lure you into visiting a malicious site.  When in doubt, open up your browser and manually enter the website.
  • Don’t respond to e-mails asking for information.  This is another form of phishing attempt attackers may use.  They will e-mail you about an issue with your “recent order” and request information.  Reputable companies will never ask for this information via e-mail.  NEVER e-mail sensitive information.
  • Use reputable Apps.  If you are using a tablet or phone, make sure to only download apps from reputable sources such as the Google Play or Apple App Store.  Criminals are trying to steal card data any way they can.  Take a look at the reviews – if the app for a well-known retailer has no reviews, there’s a good chance this is a fraudulent app.
  • Use an updated device.  Even Apple is getting into the frequent patching cycles!  You should always ensure you are using a fully-patched device with up-to-date security software.  Whether it is your tablet, phone, or Windows computer, make sure everything is updated with the latest security patches.
  • Use unique passwords.  With online shopping, many times you may be required to setup an account.  Make sure to use a strong, complex, unique password for online accounts.  Don’t use the same password for everything.  Criminals take advantage of the fact that most users will use the same password for multiple sites.
  • Only use secure websites.  You should never enter personal information into an unsecure site.  Secure websites will be noted by “HTTPS://” at the beginning of the web address.  Make sure this is there before entering any information.
  • Avoid public WiFi when purchasing.  Public WiFi networks should not be considered secure.  If you are just browsing sites looking for good deals, you should be fine on public WiFi.  However, when you are ready to buy, only enter your payment and contact information when you are on a secure network, such as at home or work.  If on a mobile device, using the data connection from your wireless carrier is better than public WiFi.
  • Document and monitor transactions.  You should save all of your receipts, e-mails, and any other communications you may have with a seller.  Monitor your accounts closely to ensure unauthorized or fraudulent charges do not appear.  If they do, contact your credit union immediately!

While you may miss out on all the excitement of Black Friday in stores, shopping from home in your pj’s with a good cup of coffee has its perks!  Keep these tips in mind and always be vigilant… the holidays will not be near as enjoyable if you’re dealing with identity theft.  I hope you all have a Happy Thanksgiving and a Merry Christmas!

 

Categories: Technology Consulting & Compliance
Posted by Mrs. Claire Jepsen, Marketing Coordinator , FTSI on 11/15/2017

Our partners already know they can expect a healthy mix of useful information, great entertainment, and fun networking at FTSI’s annual Executive Experience Center Info & Tech Expo (ExCITE) events, but one thing they’d never expect…is foul play.  That all changes on Dec. 8th at our showroom in Monrovia, CA where our guests will have the chance to solve a murder and catch the culprit at this year’s Clue-themed ExCITE event. 

Over the years, ExCITE has become known for offering the perfect blend of expert guest speakers and amazing prize giveaways.  This year’s event features a series of “ExCITE Talks” by industry professionals sharing branch transformation stories that will offer you some different pathways for success as well as insights as to what pitfalls to avoid. 

We will also have experts on hand to give demonstrations of the NCR 80 Series ATMs as well as other products like POP-In’s video banking that are going to be revolutionizing the industry.  Attendees will get to meet industry leaders like POP-In’s Gene Pranger, NCR’s Lois Kemp and Robert Malik, and a wide range of representatives from financial institutions and the technology partners that serve them. 

The whole event will have the same top-of-the-line food and fun you’ve come to expect from FTSI capped off with the comedy and magic talents of “The Great Omar” who is coming back by popular demand.

If you’re still not convinced that FTSI goes all out, check out this video from last year’s Willy Wonka-themed event.   So RSVP today so you can crack the case and win big with FTSI!  

Categories: Business Partners, Education & Training, Financial & Auditing, Research, Sales & Service, Strategic Planning & Consulting, Succession Planning, Technology Consulting & Compliance
Posted by Steve Gibbs, CUCE, BSACS, AVP Shared Compliance, Credit Union Resources, Inc on 11/13/2017

Don’t put all your eggs in one basket. Sometimes we ignored these bits of wisdom from Grandma but heeding her advice could have avoided millions of dollars in losses since the Wall Street debacle of 2008 - 2009. Yes, it is far more complex than what that sweet grey-haired lady’s sage wisdom imparted.  It’s no longer about just one ‘basket’ and those ‘eggs’ represent billions of dollars in loans, investments and deposits circulating through the U.S. financial system.  We’ve come to recognize that Concentration Risk is our ‘basket’ and seen as the culprit in numerous financial industry fiascos in the last thirty years.  However, is the basket to blame when all of the eggs are broken, or is it those hands carrying the basket?  Effective management of this risk is the only way to protect our financial institutions and industry from Concentration Risk scenarios that occurred during the 1980’s with the Savings and Loan crisis as well as the erosion of value experienced in the mortgage-backed securities market due to poorly underwritten underlying mortgages in the first decade of this century.  Only through recognizing, measuring and managing Concentration Risk can we avoid history repeating these costly disasters.

Any significant grouping of like or similar asset and/or liabilities can result in a “concentration”.  Concentrations increase in risk proportional to their size.  For example, if I have evenly distributed groups of assets, then it is more likely that my risk is also evenly distributed.  The greater I increase any one of those asset groups, the greater risk I must assume for that group. Where are the concentrations that should concern us?  Everywhere:

  • Loans:
    • Type of collateral -  residential real estate; member business; automobile (new or used)
    • Lien – residential real estate
    • Payment feature or term – member business
    • Location – residential real estate; member business
    • Exotic or non-traditional terms – residential real estate
    • Rates  (fixed or variable) – residential real estate
    • Substandard – residential real estate
    • Loan-to-Value (LTV) – residential real estate; member business
    • Indirect – automobile
    • To  one borrower
    • Participations – residential real estate; member business; automobile
      • Lender originating
      • Geographic area
  • Deposits - term shares
  • Callable borrowings
  • Investments
    • Type – Treasuries; CDs; Mortgage-backed (MBS))
    • Underlying collateral – mortgages

Even third-party providers and services offered should not escape review for concentrations.

Once concentration risk has been determined, it must be measured or quantified.  The first step is to determine how much of our portfolio is dependent on this single concentration.  Is it 20%, 40% or even 60%?  How volatile is this concentration?  In the current environment, mortgages and mortgage backed securities are viewed as extremely volatile due to the shaky real estate market. We may also consider placing more weight on any area that has historically demonstrated higher loss than other areas.  Much of this information may be obtained through the internal information system.  The value of this information is only as good as the detail and accuracy of that system.  All of these factors merge to provide a risk rating system.  Ideally, that system should be:

  • Objective;

  • Sensitive to change (borrow and loan characteristics) ; and,

  • Validated by independent review.

    Ultimately, the success or failure of our program is determined by how well it is managed.  The process of review for concentration risk is ongoing, requires far-reaching knowledge of all operations and the ability to look beneath the surface to determine areas that are less noticeable.  Management must implement an effective program consisting of:

  • Comprehensive board policy that addresses the issue of concentration risk; sets limits; demonstrates its cohesiveness with the strategic plan;

  • Monitoring anddue diligence;

  • Testing to include Scenario and Sensitivity analysis to determine the potential results of changing economic conditions on asset quality, earnings, and net worth.

Given the recent news headlines depicting runaway problems in the financial industry it is no surprise that regulatory authorities will be looking specifically at this area.  Those who wish to stay “ahead of the curve should:

  • Educate appropriate staff their board as to all aspects of concentration risk;
  • Develop a policy and program that fits the size and complexity of their credit union;
  • Demonstrate and document due diligence in mitigating those risks.

As an added warning (and a nod to my Compliance chums), we have to be aware of those concentrations that might be perceived as suspicious, unfair, or indicating preferential treatment.

  • Large groupings of loan denials in economically challenged areas;
  • Large grouping of loan approvals in economically advantaged areas:
  • Loan programs that appear to favor particular groups;
  • Approval practices that seem to steer certain groups toward higher-cost loan programs and add-ons.

When assessing risk in your institution, it’s sometimes best to look for the “devil in the details”.  Concentrations may arise in times of robust auto sales or even in the brisk housing market in the past few years.  As a reminder, always analyze those trends and document your observations.  As Grandma said, “An ounce of prevention…..” – oh, well, you know the rest.

 

 

 

Categories: Compliance
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