Posted by Mr. Dean Borland, SCMS, CUDE, VP Product Development, Credit Union Resources, Inc on 4/1/2015

Fraud is high in the consciousness of financial institutions and consumers alike. Mobile wallets were going nowhere until Apple Pay combined biometric authentication and TOKENIZATION. Apple Pay’s biometric ID protects the front-end user interface – your thumbprint is required to unlock the Apple Pay app. The token protects the mid-stream data exchange, shielding personal account information (account number, credit card number, etc.) as the transaction passes through hands (and data gathering activities) of the merchant. In combination, these two elements were a catalyst to launch the early success of Apple Pay, potentially moving the mobile wallet toward mainstream acceptance.

Tokenization – Simply speaking, a token is a unique 16-digit replacement for a credit card / financial institution account number. The beauty of a token is that it is device specific (EMV chip / card or mobile device), meaning that merchants NEVER have the actual account number. And, because they are device / PIN specific, they promise to make card present transactions much more secure, both from the standpoint of card replication fraud and from data losses associated with merchant data breaches.

Speaking of merchants, perhaps you have heard of the Merchant Customer Exchange (MCX), the consortium of merchants organized after the Fed issues its debit interchange thresholds in response to the Durbin amendment. MCX, whose ranks include household names like Walmart, CVS, Southwest Airlines, and 70+ other heavy hitters, don’t think the Fed’s Durbin response went far enough to reduce interchange fees, so they decided to take matters in their own hands. MCX is working on their own mobile wallet, called “CurrentC,” with which they hope to promote their products and convert payments from the debit / credit rails into ACH transactions, thereby sidestepping interchange altogether. MCX DOES NOT like tokenization because a token cannot be converted to an ACH item. That is the real reason CVS and Rite Aid opted out of NFC and Apple Pay. It seems to me that is reason enough for credit unions to convert to EMV and tokenize our debit and credit transactions.

Needless to say, there is a LOT going on in payments. There are many players and every player has a different solution. It is also fair to say that very few credit unions have the resources to respond to everything that is happening. One thing is for sure, your credit union needs a mobile strategy and you need to set your own priorities for if / when you introduce your mobile options to your members.

Categories: Strategic Planning & Consulting
Posted by Mr. Howard Bufe, AVP, Credit Union Resources, Inc on 3/30/2015

Enhancing the performance of our credit union is always in the forefront of our minds as board members.  Board members have duties and responsibilities that should be taken very seriously.  One of the primary functions of a board member is to set policy, plan the credit union’s course, and make sure the credit union maintains its sound financial condition.  One specific duty includes working with the President and Management Team to develop objectives and goals for the credit union.  Bottom line it’s your responsibility and duty to formulate a strategic plan for the future success of the credit union.  A strategic planning session is not only an opportunity to enhance the performance of the credit union, but it’s also an opportunity to strengthen the knowledge and performance of the board.

Three major components of any strategic plan are Mission, Vision and Core Values.  “Strategy” is the leadership’s sense of vision for the overall course and direction of the credit union for future potential.  The purpose of strategic planning is to assure that the course and direction is well thought out, sound, appropriate and to assure that the limited resources (time & capital) of the credit union are sharply focused in the support of that course and direction.  The process includes both strategy formulation and implementation.

A strategic plan is for credit union’s who are serious about growth, building competitive advantage, critical to prioritizing financial needs, providing focus and direction to move from planning to action.

Three common questions often ask;

  1. Does every credit union need a strategic plan?

Every credit union has a strategy which may range from a vague sense of direction to very sophisticated plans.It’s important to determine if our plan is vague or is it well thought out, sound, appropriate and do-able.A strategic planning session will assist us in making that determination.

  1. We are already successful: why should we plan?

Success is an indicator that the credit union has been sound and has had an appropriate strategy.It’s critical to determine if yesterday’s strategy will continue to be successful in the future.There is a great danger in assuming our past strategy is adequate without research and evaluation.

  1. Can credit unions afford to formulate a strategic plan?

Experience reveals that management will devote approximately 2-4% of its time to practical strategic planning.In reality, structured strategic planning is not something more to do, but rather a better way of doing something already being done.

Most successful credit unions follow a systematic strategy development process.  They start by developing or reaffirming their mission, vision, and values.  From here they identify and perform an analysis of key issues, including the external and internal forces that will affect the credit union’s strategy.  This is followed by the formulation of the new strategy where they determine the concrete goals and objectives that will represent the achievement of their vision.  There are three steps of strategic development:

  1. Crafting Mission, Vision, and Value Statements

The mission is a brief statement that defines the fundamental purpose of the credit union.It should include what the credit union provides to it’s members and inform management and staff about the overall goal they have come together to pursue.

The vision is a concise statement that defines the mid- to long-term (three- to ten-year) goals of the credit union.The vision statement is a guide for strategy development.It should be aspirational and inspirational – it could also be measurable.The vision statement provides a clear set of directions and expectations within which the entire strategy can be framed.

The core values of a credit union prescribe its desired behavior, character, and culture.

  1. Strategic Analysis

With a clear picture of what it needs to achieve, the credit union must now perform an external and internal analysis that includes assessing the impact of industry trends and its own performance and positioning itself relative to competitors, as well as developing a detailed understanding of how it presently delivers value.This is done with external analysis, internal analysis and a SCOT (Strengths, Challenges, Opportunities, & Threats) analysis.

  1. Strategic Goals & Objectives

With an identified planning horizon a credit union is now ready to identify objectives and strategies.These objectives and strategies will be formulated based on four perspectives which include financial, member, internal, and knowledge and growth.

In today’s world of high uncertainty, why plan?  Uncertainty is, indeed, a major problem in forward planning.  However, to make the decision not to plan is an ostrich-like approach.  In today’s world of greater uncertainty, there is a significant need for good strategic planning.

Categories: Strategic Planning & Consulting, Succession Planning
Posted by Joseph T Sefcik, Jr., President, Employment Technologies Corporation on 3/26/2015

To hire successful employees with whom other employees and members like to work, today’s hiring managers face greater challenges than ever before. The following questions highlight the most critical issues and reveal surprising new strategies for overcoming even the toughest challenges. 

      1. Am I confident I hired the right person?

Isn’t that always the lingering question?  Regardless of the number of steps, tests, or interviews the candidate has completed–there’s always an element of uncertainty. How will the person respond to your members? Will he or she understand your credit union’s values and culture? What about the challenges and demands of the job? Will the new employee be the kind of person you want on your team?  

Wouldn’t it be nice to eliminate the doubt and boost your confidence that you’ve made the best choice?

The good news is that today you can eliminate much of the guesswork from the hiring process. There’s a growing body of scientific research related to all aspects of hiring and making the most effective hiring decisions with the lowest possible risk.

Want to make the most informed decisions with scientific precision? Keep reading to discover how you can apply science and technology to avoid costly hiring mistakes, attract better candidates, pinpoint top performers—all while saving valuable time and money!

2. Am I maximizing my time and resources? 

The time available to acquire good talent is more limited than ever.  And, if you have delays or bottlenecks in your hiring process, you are not only losing valuable time —you’re likely losing some of your best candidates. 

Given the number of candidates, it’s critical to limit your candidate-facing time to only the most qualified.

The real bottleneck is the job interview. Given that interviews are also the most susceptible to error and bias, it makes sense to limit live interview time to only a select group of prescreened, prequalified candidates. 

Many credit unions are now opting for new software to automate the initial screening process—limiting scheduling, travel, and on-site time. This new technology enables you to quickly filter out the wrong candidates and accurately filter in the right candidates!

3. What is my greatest hiring expense?

Faced with increasing pressure to find better candidates in less time for less money, it’s easy to become distracted by the immediate costs of the hiring process itself and ‘what it costs me now’ rather than the true and more significant costs of hiring.

Surprisingly, the most significant hiring costs occur after the employee is hired.  And the single greatest hiring expense is employee turnover.  When an employee quits or is terminated, your investment is lost, especially when it occurs within the first 90 days.  Turnover also sends a negative message to members and other employees. 

On the other hand, steady long-term employees send a reassuring message, building member trust and loyalty.

Accurately finding and retaining top performers decreases turnover and rehire costs—and increases performance, member satisfaction, and return on investment. So when considering the cost to hire, don’t forget the greater cost of hiring the wrong person.

4. Are we attracting the best candidates?

Just as employers form impressions about candidates, candidates form impressions about employers.  Regardless of economic conditions, today’s job seekers are much more selective about where they want to work and what they want to do. 

Typically, it is up to the recruiter or hiring manager to describe the organization and the job.  If this responsibility is spread across multiple people or locations, applicants are unlikely to all hear the same message.  Miscommunication and failure to differentiate your credit union could cause you to lose your best candidates to someone that provides a clearer, more compelling message.

To attract top performers, candidates need to understand the unique aspects of the job and why your company is a great place to work. Carefully consider each step in the hiring process, view it as a marketing opportunity, and present your company in the best possible light.

5. What’s the secret to identifying top performers?

There are a lot of screening tools on the market with varying degrees of accuracy in predicting future job performance. The goal, obviously, is to achieve the highest possible accuracy at a reasonable cost.

Science clearly proves that objective tools deliver significantly higher accuracy than subjective ones.  Unfortunately, the most commonly used hiring tools today are also the most subjective.

The traditional job interview is the most common screening method. By design, an interview introduces the element of human judgment, and with that comes increased potential for bias and error. Even seasoned interviewers can make errors in judgment due to first impressions, appearance, fatigue, interruptions, etc. That means that the outcome of an interview may depend more on the effectiveness of the interviewer than the qualifications of the candidate. Options are available to increase the accuracy of interviews, yet they will never be entirely objective.

Self-report surveys and tests are also a concern. Motivated to get the job, candidates may inflate their answers or even ‘fake’ responses to better match perceived job requirements. To counter this, test vendors often include additional questions to verify the honesty of a candidate’s answers. The very inclusion of these questions underscores the fact that candidates can, and often do, fake their answers.

Clearly, the most objective and accurate methods of predicting top performers are the ones that require applicants to perform actual job tasks. For instance, if you were hiring racecar drivers, would you rather use a written survey or a road test? If you want to pinpoint top performers, let candidates ‘test drive’ the job and prove they have what it takes to succeed. 

Categories: Education & Training, Employment & Staffing, Human Resources
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