Credit Unions and Cryptocurrency: A Primer

This piece is based off of John Best’s talk at the CU 2.0 Brainstorm Event in July 2021. It is not intended to be comprehensive—rather, it will provide a cursory introduction to cryptocurrency.

Cryptocurrency is a decentralized digital currency based on distributed ledger technology. It is secured through advanced cryptography, making it extremely secure and nearly impossible to counterfeit.

Cryptocurrency has already caught the attention of the NCUA and other credit union bodies. CU 2.0 and others are working with the NCUA to explore topics and questions such as:

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CU 2.0 Podcast Episode 138 Kirk Drake on Artificial Intelligence and Why You Are Five Years Behind the Leaders

Start today, really embrace AI – artificial intelligence, where machines think and they are good at it when fed enough of the right data – and, guess what, you are already four or five years behind the leaders and that group includes most of the money center banks and maybe even a few credit unions.

Sounds gloomy? Well, it is, kind of, but CU2.0 founder Kirk Drake is here with a new book, FinAncIal, which aims to tell credit union executives what they need to know about AI and also what they need to get doing, right now. This book is not so much about theory as it is an action manual and, know this, AI is something every credit union needs to be exploring right now.

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CU 2.0 Podcast 23: Sitting Down with Gabe Krajicek, CEO of Kasasa

It’s the Credit Union podcast! CU 2.0 is excited to bring you the twenty-third in a series of podcasts from Robert McGarvey. Welcome to the CU 2.0 Podcast, regular interviews with credit union leaders, thinkers, movers, shakers and more.

If Kasasa were a bank branch network, it would be the nation’s fourth largest and it says that sometime this year it will overtake Bank of America and be the 3rd biggest.

Surprised? You bet. Probably you know that Kasasa has been building up its customer base for digital banking products – checking in particular – but now it is big enough where it’s tooting its horn.

This”branch network” isn’t a consumer-facing product – CO-OP Shared Branching it is not – but what’s interesting is that lots of FIs, some 907 community banks, and credit unions, now have joined together to offer Kasasa products, particularly the free, rewards-based checking.

And that’s also where Kasasa has a real plus – according to company CEO Gabe Krajicek, Kasasa consumers have free access to essentially every ATM in the US. When fees are imposed, the consumer is reimbursed.

And that’s an enormous perk for credit union members when many institutions have ATM fleets that can be counted on one hand.

Think about the enormity of that plus for credit union members in Kasasa institutions.

Kasasa also aims to put high-quality digital products in the hands of consumers because, said Krajicek, often consumers say they couldn’t belong to a credit union because the digital is no good.

But what if it, in fact, is good? With the right digital products, community institutions can and will survive, said Krajicek.

Along the way, Krajicek- whose company serves both community banks and credit unions – says community institutions would better serve their interests if they recognized that they have more in common and in particular they have in common a shared enemy and that’s the money center banks.

It’s an interesting thesis. So often community banks and credit unions are reflexively Hatfield and McCoy. But what if they joined together to oppose a shared foe?

What if? What if cooperation flourished? It’s a big vs. small battle, he said.  And nowadays it’s becoming a life or death struggle where many community institutions are vanishing.

Krajicek tosses out big ideas. Come along for the ride in this CU.0 podcast.

Listen here.

credit union banking, credit union member experience, credit union podcast

Check out other podcasts in the series here!

CU 2.0 Podcast: Series 18 – Al Pascual on Biometrics

It’s the Credit Union podcast! CU 2.0 is excited to bring you the eighteenth in a series of podcasts from Robert McGarvey. Welcome to the CU 2.0 Podcast, regular interviews with credit union leaders, thinkers, movers, shakers and more.

**Pop Quiz**

How long have passwords been around?

How many credit union members want never to use one again?

What are the three must-have biometrics modalities?

When will biometrics effectively supplant passwords in financial services?

Flashback time: when did Apple introduce Touch ID, a tool that thrust biometrics into everyday use for tens of millions of consumers?

Consider the above your pop quiz. How did you score?

Al Pascual, a researcher with Javelin, who recently co-authored a report on biometrics and financial services, knows the answers to these questions and he tells all in this CU 2.0 podcast.

It moves fast, you’ll want to hear it.

A sliver of good/bad news: it’s the biggest financial institutions that are carrying the weight of persuading regulators about the efficacy of biometrics and that just may be a blessing for smaller institutions – credit unions included – who can follow behind.

Click the photo below to listen now!

credit union biometrics, credit union security

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Credit Union Member Growth

Credit union membership growth! How do you measure it? It seems like a simple question, just like “where can I get the best burger in town?” seems like a simple question. However, once different interpretations of what constitutes a new member—or a good burger come into play—things don’t stay so clear.

I have been on the Board of Directors at South Bay Credit Union for the last 11 years. At almost every board meeting, our COO delivers the monthly new member report. We seem to grow by a certain percentage each month, yet we have had roughly the same number of members for the last decade. How does that happen? Member attrition.

Understanding Credit Union Member Attrition

Member attrition is not a focal point of many credit unions. It certainly wasn’t for SBCU until just last year. I don’t know why I had that epiphany about focusing on attrition, but I did.

It forced us to focus on why members were leaving, which members were leaving, and where they were going. In my opinion, there are members whom we don’t mind leaving. Let that sink in for a minute…

Not all members are good members participating in the cooperative. Just like a team is only as strong as its weakest player, a cooperative is only as strong as its weakest link. Think of the Great Wall of China. It kept China safe for centuries until the gates were opened from the inside and the Mongols walked right into China and took over. The weak link was the open door in the hundreds of miles of brick wall.

Armed with the data on which members we were losing, why we were losing them, and where they were going, we were able to address a growth strategy in a tactical manner. Intuition is great, but data is factual. Using data, we were able to “farm” our existing members and cultivate those members to be our most profitable and highest participating members.

Knowing why members leave and which ones you want to keep allows you to fix the reasons why those members leave. The first step in membe

r growth is to stop the bleeding. You can add 50 new members per day, but if you’re losing 50 per day as well, you’ll never grow.

Credit Union Size vs Member Growth

Now that we have fixed the leak in membership, it is time to start adding net new members. Take a look at this study from NCUA. Can you explain to me why the larger the credit union, the greater the new member growth?

credit union member growth

My guess is that the larger credit unions grow because of their ability to spend on advertising. TV, radio, print, online, etc. are all things smaller credit unions struggle to do at scale.

However, that is changing daily. We are moving from a one-to-many toward a one-to-one marketing environment. Tailoring the message to the individual potential member you are targeting is a much more cost-effective way of doing this.

Credit Union Member Growth via Smarter Advertisement

One-to-many marketing does work. It’s inefficient, but it does work. One-to-one marketing works better, though. If you know who you’re marketing to, you can ensure that you and your prospect are well-suited to one another.

To put it in terms you might be more familiar with, think of it as the RFP process. If I run a core provider or mobile banking provider, I probably get 50 or so RFP’s to complete each month. Some vendors will complete all 50 and hope for the best. If they complete all 50, they will likely get included in 25 searches, do 10 demos, and get 5 new clients. The more efficient vendors will evaluate all 50, score the potential for winning by developing an ideal prospect persona, reply to those 25 that fit their ideal client profile, do 20 demos and get 10 clients. Double the clients, half the work, a pretty good model.

New member acquisition is the same. You can advertise to thousands with your generic message, onboard as many as you can, and then have 40% of them leave because they are not a fit for your credit union (they are not your ideal member). Or, you can use technology to find the potential members that fit your ideal member persona, target them specifically, and onboard the same number of new members who will not leave. And you can do that for half the cost.

The first step is identifying your ideal member or persona, which you will have already done while examining member attrition. Then, find the right partner to help you put your message in front of them at the right time in the right context.

There are several examples of this being done and CU 2.0 would be happy to help you. Contact us here.

And, for the record, the best burger in town is from In-N-Out.