Moving into using data to boost compliance? Apply the ‘Snowball Method’

A significant opportunity for credit unions today is unlocking their treasure trove of data through in-depth analytics, and then organizing and normalizing it within their institutions. It can provide deeper context to member behaviors that extends beyond servicing current needs to predicting future behaviors with more personalization, protection and brand connectivity.

This is critical both in and out of a pandemic, but the current landscape demonstrates the necessity of this work. Overnight, the number of card-not-present versus card-present transactions skyrocketed as consumer behavior shifted from in-store to primarily online. U.S. online sales reached $63 billion in August, a 42% year-over-year increase, according to data from Adobe Analytics. The spike renders most data fraud models almost completely ineffective as they have been programmed to consumer’s specific habits, which have now changed. And per research from CUES Supplier member and strategic provider Cornerstone Advisors, Scottsdale, Arizona, over the last three years, credit unions have seen their collective share of new account applications drop by half from 51% to 25%.

Not only are credit unions tasked with growing the business while constantly facing the challenge to adequately comply with AML/BSA regulations, but now they must balance the long-term implications brought on by the pandemic. Due to silos and a lack of resources, credit union fraud and compliance teams often lack the data acumen to protect their institutions and members, track fraudulent activity and service member needs in a modern, holistic format.

 

continue reading »