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Reality Check Coverage: Allison Fett Reveals the Contents of the Life-Changing Jar 

ATLANTIC CITY, N.J. – The financial performance is four times better in organizations with fully engaged employees/team members and these fully engaged employees/team members are 87% less likely to quit. This is why engagement matters, said AVP Talent Development for Verve a Credit Union Allison Fett as she closed out the Reality Check conference on Wednesday.

Allison Fett drives home the importance of engagement in your organization.

Fett spent time discussing Maslow’s Hierarchy of Needs , which suggests that all humans have a desire to reach their full potential yet only 15% of people do so. She then introduced the “Life-Changing Jar, the contents of which symbolize steps to take and words to live by in order to keep your team embers engaged and your credit union productive. The jar is a tool designed to bridge this gap of potential. It represents basic concepts; however, they require intentional practice. When these concepts become habitual, Fett explained, basic human needs are satisfied, inspiring individuals to take the next step toward reaching their full potential. The closer people are to reaching their full potential, the more engaged they become.

Although these concepts at common sense, they are not common practice!

View more Reality Check photos here.

Thursday, March 23, 2017 12:06:00 PM

Reality Check Coverage: Sundeep Kapur Stresses Innovation and Personalization to Meet Members Needs 

ATLANTIC CITY, N.J. – Consumers are looking for both personalization and ease when it comes to their transactions. They want automation for quick and easy access, but they also want to feel like the processes are personalized to them. Personalization equals trust, said Sundeep Kapur, chair of Digital Advisory Strategy Council, during his session on Wednesday.

Sundeep Kapur discusses the importance of keeping up with the ever-evolving payment ecosystem.

Kapur then delved into transforming branches and transactions to meet these needs. He gave the example of a Bank of America person-less branch, where any consumer , regardless of whether they have a Bank of America account or not, can access funds easily.

Wells Fargo is also ahead of the game, he pointed out. At its 13,000 ATMs, consumers will soon be able to withdraw money with their smartphones, surcharge-free.

Credit unions must figure out how to play successfully in the field of emerging and evolving payment technology, he said. With the payment ecosystem evolving, with PayPal, mobile payment apps, and others, credit unions must look at merchant data. Credit unions should see where and how their members are shopping and spending money. That way they can build a strategy on how to communicate effectively with their members. 

View more Reality Check photos here.

Thursday, March 23, 2017 9:55:00 AM

Reality Check Coverage: Wharton Marketing Professor Jonah Berger Discusses the Psychology Behind ‘Word-of-Mouth’ Marketing and How to Make it ‘Contagious’ 

ATLANTIC CITY, N.J. – “Find your people and turn them into your advocates.” This is how Wharton Business School Marketing Professor and best-selling author Jonah Berger opened his presentation on Wednesday morning. Only 7% of all word-of-mouth is done online. Social media is not enough. You need to tap into your greatest resource, your members, and make them your brand advocates.

Wharton Business School Marketing Professor and best-selling author Jonah Berger reveals the psychology behind “contagious” and “viral” content.

Psychology is more important than technology, according to Berger. Credit unions suffer from the “curse of knowledge”; we communicate about our offerings in terms that only we understand. We communicate with others as if they know as much about our offerings as we do.

To overcome this, you need to create social currency, said Berger. Find your advocates and give them information and anecdotes that make them feel like they are in-the-know, like they are insiders. When someone feels that way, they are more likely to share that word-of-mouth. 

We must get our message out to consumers as often as possible and when it matters most. Top-of-mind means tip-of-the-tongue, said Berger. The way we often forget our reusable bags when grocery shopping until we're checking out and it's too late, consumers aren't thinking about your credit union until they've already signed up at a bank.

View more Reality Check photos here.

Thursday, March 23, 2017 9:49:00 AM

Reality Check Coverage: David Peterson Challenges Attendees to Survive a Shipwreck and Be a Black Swan 

ATLANTIC CITY, N.J. – The average human makes 35,000 decisions a day. How can we ensure we’ll make informed, impactful decisions? Best-selling author and shipwreck survivor David Peterson gave attendees the tools to display grounded leadership, even in the face of crisis.

Best-selling author and shipwreck survivor David Peterson gives attendees the tools to display grounded leadership, even in the face of crisis.

Peterson learned from falling asleep at the helm of a sailboat and getting off course that we must identify when we’re working on autopilot, realize when we’re doing the same thing we’ve always with the belief that we’ll continue to get the same results. If you don’t “wake up”, you won’t see a potential disaster on the horizon.

What would be disastrous, Peterson asked? He posed the question to attendees, “What if millennials decided to ride Uber cars for all of their travel and rented apartments for the rest of their lives?” Credit unions would not be able to sell this important generation any loans whatsoever. We need to keep an eye out for changes in consumer behaviors, and for black swans.

Peterson then challenged attendees to “be the black swan.” We must respond, not react…a concept Peterson called “thoughtful response.” We should be the disruptors.

View more Reality Check photos here.

Wednesday, March 22, 2017 10:11:00 AM

Reality Check Coverage: Filene’s Tansley Stearns Asks CUs ‘What If’ 

ATLANTIC CITY, N.J. – Remember the question “if a tree falls in the woods, and no one was there to hear it, does it make a sound?” Filene’s Chief Impact Officer Tansley Stearns presented this question to credit unions in a different way at Reality Check on Tuesday: if your credit union disappeared, would someone notice if you were gone?

Filene’s Tansley Stearns drives home lessons on being relevant with your members and your community.

The question isn’t challenging whether or not a credit union serves its members, it challenges whether or not a credit union is relevant to its members and to its community. Stearns urged the credit union leaders in the room to put themselves in their members’ shoes. Filene research showed that credit unions have little understanding of their impact priorities as compared to the needs of the community and members. They also lack quality-of-life or life-cycle anticipation framework that can help with life events or crises.

Stearns then posed thought-provoking and challenging questions to the audience: What if you measure your impact? What if you track the savings achieved through membership? What if you set sustainability goals or metrics for benchmarking your impact?

What if we aggregate savings versus regional bank rates, given loan types and FICO credit scores? What if we have savings available in buying major items (homes and vehicles) and regular household items like cable, Internet and telephone, clean energy, locally sourced food, or other services as a group through the credit union’s cooperative purchasing programs?

View more Reality Check photos here.

Wednesday, March 22, 2017 10:05:00 AM

Reality Check Coverage: CUNA Mutual Group’s Ken Otsuka Gets Real About the Fraud You Should Know About, But Don’t 

ATLANTIC CITY, N.J. – Fraudsters know just as much about your credit union’s transactions than you do. Or they know more.

Ken Otsuka, senior consultant in business protection risk management for CUNA Mutual Group, solved that problem for Reality Check attendees Tuesday with his presentation “What Fraudsters Know That the CEO Needs to Know”, which covered ACH, wire, loan, and payment card fraud.

CUNA Mutual Group’s Ken Otsuka reviews the latest to look for in ACH, wire, loan, and payment card fraud.

After polling the crowd on their ACH capabilities, Otsuka warned that originating ACH debits is the biggest risk as he presented an ACH fraud case study that cost a credit union over $300K.

To avoid ACH fraud, Otsuka recommends credit union understand what capabilities they (or their vendors) are providing and set member eligibility guidelines for online ACH debit capability.

Otsuka then delved into what’s trending in wire fraud, including HELOC accounts, online account takeovers, CEO email fraud, and real estate closings.

Scrutinizing online membership and loan applications and using an identity verification/fraud service to verify identity should be a part of your credit union’s identity theft prevention process, Otsuka said.

When it comes to payment card fraud, Otsuka urged credit unions who haven’t adopt EMV to do so as soon as possible. “Non-EMV portions of card portfolios are getting hit hard,” he warned.

View more Reality Check photos here.

Wednesday, March 22, 2017 9:58:00 AM

Reality Check Coverage: Fannie Mae’s Doug Duncan Gives an Informative Economic Forecast and a Realistic View on the Housing Market 

ATLANTIC CITY, N.J. – Opening his presentation by polling the audience on their outlook on taxes, mortgages, healthcare, and more, Doug Duncan, chief economist for Fannie Mae, gave an eye-opening economic forecast for the next four to eight years as we slowly climb out of the recession under the current administration.

“We are probably in the late stages of the economic expansion,” Duncan pointed out, before delving into the declining unemployment rate, the slowing productivity growth, rising corporate profits, and more.

Doug Duncan, chief economist for Fannie Mae, gives an eye-opening economic forecast.

When it comes to mortgage rates, Fannie Mae agrees with the 56% of the audience who said they think rates will be between 4.0-4.5% by December 31, 2017. Duncan explained how intermediate rates have risen substantially since the presidential election after recovering from a dip after Brexit.

Another factor to consider in regards to the housing market, Duncan pointed out, is consumer optimism. Fannie Mae’s Home Purchase Sentiment Index™ (HPSI) suggests slower growth in 2017. For this index, Fannie Mae asks consumers about their feelings regarding buying and selling, their confidence in the market, and their income.

When it comes to the younger generation, Fannie Mae found that the vast majority of renters age 18-44 indicate they do plan to buy at some point in the future, but these millennials, and in some cases their parents, are burdened by student loans as well as diminished job prospects and stagnant wages. However, millennial homeownership is accelerating due in part to job growth during this expansion.

View more Reality Check photos here.

Tuesday, March 21, 2017 11:34:00 AM

Reality Check Coverage: CUNA Mutual Group Keynote Speaker Jeffrey Hayzlett Challenges Attendees to ‘Adapt, Change, or Die’ 

ATLANTIC CITY, N.J. – People and companies fail to change. Why? Reality Check’s CUNA Mutual Group keynote speaker Jeffrey Hayzlett broke it down for attendees on Tuesday morning, challenging them to adapt, change, or die” no matter what the cost.

NJCUL President/CEO David Frankil kicks off Reality Check by thanking sponsors and recognizing the League’s collaboration with the MD|DC Credit Union Association and the Pennsylvania Credit Union Association.

After a few words from NJCUL President/CEO David Frankil, who thanked sponsors and recognized the League’s collaboration with the MD|DC Credit Union Association and the Pennsylvania Credit Union Association, Hayzlett woke everyone up with a challenge to think big.

CUNA Mutual Group keynote speaker Jeffrey Hayzlett  wakes everyone up with a challenge to think big.

If you think big, you win fast, he said, pulling from his book “Think Big, Act Bigger”, which was given to each attendee as they registered. You are going to make mistakes, he said. Make them, but make them fast, and keep going. “You’re in the race of your life.”

“Limitations exist everywhere—mostly in our minds and in the stories we tell ourselves,” Hayzlett said, as he pointed out the reasons we fail: fear, tension, and risk. Get over your fear of being a beginner, create and overcome tension, and embrace risk.

Hayzlett also challenged leaders to reevaluate their credit union’s “mutual conditions of satisfaction” they present to their members, explaining that credit unions don’t sell loans, they sell promises. And your brand is your promise.

View more Reality Check photos here.

Tuesday, March 21, 2017 10:13:00 AM

How to Not Get Run Over By a Tank — From Tradition to ExoMorphosis 

By: David Peterson

I was recently talking with David Frankil, President of the NJ Credit Union League. We were chatting about a keynote which I’ll be doing for him in March at the CU Reality Check. I was talking about innovation and my drive to get financial executives to “think about how they think.” Since financial institutions are doing pretty well financially at the moment, most are not thinking about how their services will need to adapt in the coming years to be relevant to millennial customers that will be replacing their baby boomers. They are stuck with an outdated model of what a bank does and can’t seem to envision a different way that they would deliver services. David mentioned that what I was describing sounded like the Wesleyan Quadrilateral. (You can look it up, I had to.)

This got me thinking. Is there a similar progression related to the forces of change as it relates to banking services? I think there is. The pattern follows this way: Tradition — Experience — Reason — ExoMorphosis. Let’s examine these individually:

  • Tradition truly drives much of what is done in banking, particularly as it relates to the inner workings of the institution. “We do things this way; we have always done them this way. It’s how it’s done. Period.” Many FIs are being run generationally, with the current CEO being the 3rd or 4th generation. In many cases, the way that the FI is currently run is a product of the training that the CEO received from the previous CEO, with little regard for the changes in technology and customer preference.
  • Experience clearly adds to the management style of a senior management. Once there are events that occur that introduce new elements into the banking environment that ultimately change internal processes or services offered. Sometimes a surreptitious event creates an opportunity, the equivalent of the invention of Velcro or Rogaine. Inventors have to be aware that what they are trying to achieve may yield a different result but one that could be a bigger opportunity than the original objective. This happens in banking but there must be awareness to recognize such an experiential event that might result in innovative changes.
  • Reason — If you sit and think, really think about a problem, it is likely that you will create one or more solutions. Certainly reason has been employed by bankers to create new product opportunities. A good example of this might be home equity lending. People who needed additional funds had equity in their homes. The equity could be used to secure a line of credit, allowing the homeowner to use those funds as they saw fit. This opportunity for thinking of innovative solutions using reason does seem to be limited to incremental innovations on existing services, but it exists.
  • Which brings us to ExoMorphism (Ok, it’s a made up word, but stick with me …). I created it using Exo meaning external and Morph meaning change ― change that occurs due to external factors. I truly believe that the transformational change that will occur in the coming 8 years will be driven not from within the institution but from external factors. Factors such as the explosion of product offered by financial technology companies (aka FinTechs). From potential changes by the Office of the Comptroller of the Currency allowing those FinTechs access to the U.S. Payments system. By the changing desires of millions of millennials and the generation coming behind them (I was recently introduced to a term for Gen Z, MineCrafters. So named for world-building game they love, I really like the term). We are the precipice of the greatest amount of change in financial services than at any other time in history.

Bankers must break out of tradition and become more open to innovation. Rather than eschewing new ideas, they must seek them out. They must hire younger employees and then when those employees openly question the status quo, they must listen. Not everything a new pair of eyes sees is an opportunity for a breakthrough but some are. If you stifle questioning, if you squelch creativity and genuine inquisitiveness, then very quickly those employees fall into the dull routine of how things work today with no interest in innovation. Or they get bored and leave. Either way, your organization loses an amazing opportunity to learn, to grow.

Check out this excellent article written by a former bank teller who found that none of the institutions she worked for had any interest in developing her or recognized her contributions on the front line of the customer experience — Tellers Should Be the Focus of a Bank’s Succession Plans. (OK, full disclosure, the article mentions me and my advocacy for engagement in the branch, but nonetheless, it is an honest evaluation from someone at the ground level and you should check it out …). ExoMorphosis is going to occur. It’s like a tank. You can either jump on board, use it to make a dramatic difference in your survivability in the coming years or you can get run over. Your choice…

Tuesday, March 14, 2017 8:53:00 AM

A House, a House, My Kingdom for a House 

NJCUL President/CEO Interviews CU Reality Check Speaker Doug Duncan

Housing remains a key component of growth for more sectors of our economy than we can almost count – and specifically including financial services. Understanding what the future might bring for the economy, and for housing and mortgage markets is essential to your credit union’s strategic plan.

Joining us at our upcoming CU Reality Check Conference (March 20-22, 2017) is Doug Duncan, Fannie Mae's senior vice president and chief economist, one of Bloomberg/BusinessWeek's 50 Most Powerful People in Real Estate. He is responsible for providing all forecasts and analyses on these topics for Fannie Mae, and also oversees corporate strategy and strategic research regarding external factors and their potential impact on the company and the housing industry.

Under his leadership, Fannie Mae’s Economic and Strategic Research Group won the NABE Outlook Award, presented annually for the most accurate GDP and Treasury note yield forecasts, in both 2015 and 2016 – the first recipient in the award's history to capture the honor two years in a row.

NJCUL President & CEO David Frankil recently visited with Doug to get a preview of his presentation.

Frankil: What are the key macro trends credit union leaders need to focus on in 2017?

Our theme for the year is really a question: will policy change extend the expansion? We are now in the third longest expansion in recorded economic history. They all eventually end, and we are terrible at forecasting those ends with precision. There are significant policy changes that are likely to occur that could extend it or truncate it, and key to us is the nature, magnitude, and sequencing of changes.

Regulatory reform, for example, would be neutral to slightly positive, and if tax reform happens, it will be positive.  But if the first thing that happens is that immigration is curtailed – or we see deportations in mass quantities, with raised tariffs at the same time before reform – you may well end the expansion.

We don’t think that is likely, given that health care and tax reform are front burner, but it is still something to watch carefully.

Frankil: Let me drill down on the tax part of that answer. The mortgage tax deduction has been mentioned as possibly being at risk in the tax reform debate – why do you think tax reform isn’t a major negative?

If it goes away, it is the nature of the change that matters. If the non-itemized exemption is raised to what the Administration has proposed, it would make the deduction irrelevant to a broad swath of people – because low income households don’t itemize. High income households are just using the tax benefit if the after-tax return is better than alternative investments. Plus, with interest rates as low as they are, and with the refinancing we’ve seen, the amount of deductible interest is quite small.

On balance, impact really depends on which and how many households would be affected –probably a slight negative for upper middle income households. But if they don’t change the exemptions, and instead just wiped out the mortgage deduction, then it would have a major impact.

Frankil: Consumer confidence seems high right now – so assuming the Fed implements rate increases this year, will higher mortgage rates negatively impact home sales as they typically do?

A rise in rates will certainly curtail refinance activity, but keep in mind that so many people have already refinanced with the lower rates we’ve seen. More important is how consumers see their prospects for long-term employment and income growth. I’m an optimist in terms of housing.

We do surveys of key demographics, and one of the most encouraging findings relates to millennials, who are the most optimistic group in our survey – the 18-34 age group. We have had survey results for five years telling us that they eventually want to own a home, but were waiting for job stability and income growth.  Now that they are seeing both of those, we have clear evidence that they are buying homes.

In general, as long as incomes outpace the interest rate rise, then the growth in income offsets any modest rise in rates. And more fundamentally, between WWII and now, the average mortgage rate was 6.5%, and only now is at 4.2%. That is still a very good interest rate historically, at a good 200 basis points lower than the historical average.

This is just a small sample of what Doug will be covering at CU Reality Check – and there is still time to register. The event features a wide range of expert speakers on topics of direct interest to CEOs, Senior Executives, Board Chairs, and others that are focused on setting the future course of their credit union. To learn more, go to www.CURealityCheck.com – or to register directly, click here.

Monday, March 13, 2017 1:39:00 PM