LAKE BUENA VISTA, Fla.–An “elevated digital IQ” in credit unions could help significantly reduce fraud, especially if data could be shared across the CU community, but it will only work if CUs can identify and reduce their “tech debt,” according to three people who spoke to credit unions here.
During a session on “Elevating Digital IQ” at the NACUSO Network Conference and as part of a Mitchell Stankovic Underground Collision session as part of “Transformation Thursday,” the three panelists offered their insights on AI, fraud prevention, employee training and what they are doing.
The panelists included Sam Das of TruStage Ventures, Erika Hill of Origence, and Liz Winninger, President/CEO of Xtend. The discussion was moderated by Brandi Stankovic.
Here is a look at what was discussed:
Stankovic: Talk to us about elevating digital IQ?
Das: The industry is far too small to deal with and compete with this issue. We are in the middle of a cybersecurity and AI arms race. Digital fraud has been with us since the beginning of the Internet and bad actors have been using old methods and refining them using new methods every day, including high-tech like botnets, brute force attacks, and credential stuffing. They're automating these now with AI and machine learning so that they can conduct literally thousands of attacks every hour.
That's all very scary, but the good news is the same technology can be used to fight back. It brings us back to the heart of the question of this panel. For every credit union and CUSO this is a double-edged sword. The more relevant we become to credit union members, the more at risk we are for these type of attacks. It's now the new cost of doing business.
At Trustage every year we do an analysis of all the external threats and interview credit union (leaders). They all have a good formal understanding of the other threats, like the liquidity issues, but there's a huge knowledge gap with cybersecurity across the across the board, and they've admitted it. So, it's incumbent on CUSOs to make the necessary investments.
You brought up the fact that we can ask more of our partners and that is 100% true. We need to be picking the right partners, ones that are going to really be partners with us in this fight. The problem is you can't ask partners to do things that we don’t ask our own organizations to deal with.
Hill: Fraudsters are getting smarter, are working faster and are more agile. They are using AI to try to beat us at the game, to cause disruption in organizations. It is critically important that you to not only invest in the right technologies, but really think about the strategies you have in place. Are they the right strategies not just for now but the long term?
The first step in addressing this and raising the fraud IQ is lifting the hood of the car and asking yourself do you have the right tools. Do we have the right partners? Are these partners making the right investments? If the answer is no, then I think what we need to do is eliminate what we call the ‘tech debt.’
Do a deep audit. Ask yourself the question: Yes, they have been a partner for a long time, but do they have the right (offerings)? Identifying the gap and developing a strategy and bringing in new partners to add to your fraud strategy is imperative.
Winninger: I've been talking about the human side. The biggest thing for my organization is teaching these employees and bringing them up on the credit union industry. We get maybe two years in the call center with these employees and then I hope they go on to work in a credit union and I hope someday they run that credit union.
We’re investing to make sure that they're prepared for that future and for our industry to not continue to have succession planning.
What I what I think is most important is we are a part of a community and we talk a lot about community. Where I live there are a lot of farming communities and it resonates with (employees) to be able to say, ‘OK, when I go work at the credit union I'm going to get the education that I've probably never had. The most important thing we can look at right now is building those educational opportunities for them.
Stankovic: How are you protecting your clients from fraud?
Winninger: We invested a lot this past year in building that foundation of training and having a strong consistent training across the organization. Now we're putting in place a platform and we're using an app to generate the education for those platforms.
For example, we invested in Talkdesk. The investment is not pleasant, but it tells you why our members are calling. There is a dashboard so you know the top 10 reasons why members are calling. We're able to train (agents) on those reasons, which allows them to get trained and work quickly and identify things.
Hill: Being SSO compliant, having multi-factor authentication are non-negotiable with us. We create multiple barriers. It’s non-negotiable with any new technologies for Origence. This is even true with our marketing stack.
The other step we take, and we do it multiple times per year, is we are committed to constantly training our employees. We go through several types of certified training modules and if you don’t (pass), you take it again. It’s been very beneficial for all employees at our organization. It’s not just the technology; people can also be a barrier.
Das: One of the things we see is the fact fraud has been handled in historically in many organizations in isolated verticals. Lending will have their approach to fraud, the deposit side will have their own approach. In many cases there is very little communication as to what is important.
What is needed is a holistic approach to what and how we should be looking at this.
How do you provide that enterprise-level view of fraud that shares that data internally through the entire organization? Machine learning can help to triangulate and predict those types of attacks.
The advantage credit unions have is that we are a community. What I would love to see happen is for credit unions and CUSOs to talk to each other and share that.
If can collectively create this data set, we can help predict fraud across the entire industry. That gives us a huge advantage not only in attracting members but in keeping our existing members safe. I think that’s where there is a lot of the potential in the next three to five years.
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