Lights, Camera, Action! 2008 Annual Leadership Conference CU*Answers 1 1 1 June 18, 2008
We have a winner! • Lights, Camera, Action...Win $1,500 • February-March, 2008 • 24 entries submitted • And the winner is... Velvet Fuller AAC Credit Union Grand Rapids, MI
The Owners are Here! Topics for the day: • Shedding Some Light on Industry Issues • Invest...Execute...Earn! • Last year we announced a “Jump to the Future” – where are we today, and what does it mean to 2009? • New Declarations • Can a network set goals to guarantee the difference? • A Year of Collaboration • It was a big year for the CU*Answers network for leading the industry towards a new kind of networked future • Randy’s Top Ten • What’s On Your Mind?
Shedding Some Light on Industry Issues Misery loves company when you’re grading on a scale...so when rainy skies have everyone hunkering down, what should you be thinking about for when the sun comes out again?
Navigating a StormWhile Planning to be Stronger on the Other Side • You can read, watch TV, and figure out for yourself, the national news on our economy is not that great • But the effect from the perspective of members and credit unions might be a little different during this phase in our economy • Now may be the best time to invest for the inevitable next phase
CU*Answers will kick off the day with two investments in your 2009 business year: • The upcoming COLA increases will be capped at $0.01 per member! • Online ATM/Debit transaction prices will be slashed by $0.005 (down 6.6%) for 2009! Navigating a StormWhile Planning to be Stronger on the Other Side • You can read, watch TV, and figure out for yourself, the national news on our economy is not that great • But the effect from the perspective of members and credit unions might be a little different during this phase in our economy • Now may be the best time to invest for the inevitable next phase
Responding to Stormy Skies • While there is no doubt there are CUs struggling with this change in the economy, the national big picture is not nearly as bleak as you might think • Have you considered that you might be the standout performer in your marketplace if you respond differently than your competition, right now?
Responding to Stormy SkiesWhen It’s Raining, Find an Umbrella Salesman • It’s an old adage that members flock to safety in unsure times • What’s special about right now is that our competition might actually be encouraging it through their actions and response to a rampant time of speculation and bursting bubbles • It’s an advantage to be local and deal with real-people experiences
Responding to Stormy SkiesWhat are your plans for a sunny day? • This mortgage crisis is an opportunity for credit unions to shine • As members hunt for solutions to their problems, they are finding credit unions are on their side and still interested in building a relationship • The trick will be for us to come out the other side of this crisis as a long-term, trusted channel for member mortgage needs
Time to draw a line in the sand and make a big declaration...and back it up with actions and investment • Later today, we’ll talk about how we will work at being known as one of the most aggressive mortgage servicing networks in the industry Responding to Stormy SkiesWhat are your plans for a sunny day? • This mortgage crisis is an opportunity for credit unions to shine • As members hunt for solutions to their problems, they are finding credit unions are on their side and still interested in building a relationship • The trick will be for us to come out the other side of this crisis as a long-term, trusted channel for member mortgage needs
Responding to Stormy SkiesWhen It’s Raining, Find an Umbrella Salesman • The pressure has been building for a long time on deceptive credit card practices • The voice of consumer groups is getting louder, and people are listening • Now a credit crisis, real or imagined, adds to the pain • If you are looking for disruptive signals and a time to get active, what more could you ask for?
CU*BASE online credit card programs are growing like crazy, but let’s invest a bit more • In 2009, any CU processing their credit card portfolio online with CU*BASE will see an additional price decrease of $0.005 for ATM/Debit transactions...for a total savings in 2009 of 13.3% on ATM/Debit activity Responding to Stormy SkiesWhen It’s Raining, Find an Umbrella Salesman • The pressure has been building for a long time on deceptive credit card practices • The voice of consumer groups is getting louder, and people are listening • Now a credit crisis, real or imagined, adds to the pain • If you are looking for disruptive signals and a time to get active, what more could you ask for?
Responding to Stormy SkiesEverybody’s Putting Money Away For a Rainy Day
Responding to Stormy SkiesEverybody’s Putting Money Away For a Rainy Day • It’s always a balancing act, understanding the flows between emerging delinquencies and budgeting the provision for loan loss, actualizing charge-offs, and then taking your chances with the next delinquency report • It appears credit unions are doing a good job • What are you learning about collections right now?
CU*Answers invested more in Collections during 2008 than in the previous five years combined Lender*VP Collections is making a huge difference in why With delinquency on everyone’s mind, are you planning to revamp how you see Collections in 2009? Responding to Stormy SkiesEverybody’s Putting Money Away For a Rainy Day • It’s always a balancing act, understanding the flows between emerging delinquencies and budgeting the provision for loan loss, actualizing charge-offs, and then taking your chances with the next delinquency report • It appears credit unions are doing a good job • What are you learning about collections right now?
Responding to Stormy SkiesBack to Reality...It’s Not All Good News • When it gets to the end of the month, and you have to look at your income instatement, and your balance sheet all by itself, it’s not as easy to think about an industry perspective, graded on a scale • It’s still tough to make big plans on 60 basis points of ROA and an asset base that still seems too small • It is the time to strike, invest, and innovate...because to emerge from the other side of a storm with new opportunities, you have to be truly different than you were on the day the skies darkened
The Pressures Will Be the Same... • ...unless we address these issues in anticipation of the next phase • We need to pump new energy into traditional, maturing ideas • We need to capture the benefits of scale • We need to be relevant to the next generation • So when all the pundits remind the market that in bad times, credit unions shine, we can only smile for a second, and then get right back to work on ensuring that we’ll be here, every time there’s a bad time
More than knowing your members for who they are right now, standing still, we need to look at where they are going, and then make sure we are moving as fast as they are So let’s get this party started! Knowing Your Member is Still the Key to Future Relevance
Invest...Execute...Earn! Like clockwork, you can count on us to spend the money, develop the products, and put the products in your hands, year in and year out Are you earning on these investments?
Marching On: June 2007 - June 2008 • Since we last met, we have continued to keep our eye on the big prize, but our efforts very focused day to day • Project Statistics June ’07 through May ’08: • Total projects requested: 1,712 • Total projects completed: 1,088 (64%) • Outstanding projects as of June 6, 2008: 505 • Overall approval rate: 93% • Idea Forms • 580 hits on the Idea Form web page so far in 2008 (2,521 hits in 2007) • Worked in batches of about 25 • Blogged with subject-matter expertsat CU*Answers and the credit union • Making sausage... http://monitor.cuanswers.com/
Marching On: 1998 to 2008A Track Record You Can Verify • This year more than ever, releases are fresh in everyone’s mind – after all, we just had a big one (June 9 online, June 23-24 self processing) • A 12-page release summary (a record!) • Over 25 individual major projects which modified 451 CU*BASE programs and added or changed nearly 50 database files • $250K-$300K average FASB investment • It’s Me 247 alone: $125K+ • And we’ve been doing this, day in and day out, for over ten years! “What could I improve on without spending a dime?” A CEO Writing His 2008 Business Plan http://cuanswers.com/client_release_summaries.php
Marching On: 1998 to 2008A Track Record You Can Verify • After you build it, you have to document it, sell it, and train it • Once it’s live, you have to support it ... and then start the whole process all over again • AnswerBook • 3,109 average contacts per month • 80%+ resolved in less than 30 min. • Client Support • Avg call length: 5.65 minutes • Avg hold time: 1.14 minutes • Avg # of incoming calls: 7,800/mo. Education Since last year... • 225 classroom or individual events • 360 web conference sessions (up 12.5%) • 220 days of conversion training/support Documentation In the last release alone... • 150 help topics changed • Dozen+ booklets updated
Some of Our Favorites Since Last YearTools to Connect With Your Members • Cross-selling is not an employee strategy, it is a corporate one, and you should apply the 3 to 1 rule • In 2008, we made big advances in rounding out a corporate strategy and a series of tools to turn leads into income • Cross Sales integration into Sales Tracker conversation notes • When you hear CRM, know that Sales Tracker is at the core of those ideas • Following up on Sales Leads with the new “Work Sales Trackers” tool Watch for upcoming web conference training...get a perspective on these new tools from the Xtension Call Center team!
Some of Our Favorites Since Last YearTools to Connect With Your Members • More reports enhanced to use the A.S.A.P. / Member Connect export process • We’re up to about 30 reports and inquiry tools that now allow you to communicate with your members on the spot!
Some of Our Favorites Since Last YearTools for Lending • Miscellaneous Coverages (Spring 2008) • Gap insurance, mechanical breakdown, miscellaneous fees, you name it! • Also included significant enhancements to how insurance and debt protection can be quoted on your loan requests • Loan Payment Change History Phase 2 (Fall 2007) • Changes to the delinquency calculation • First person responder • Loan Application trending file (Year-end 2007) • Know your numbers
Some of Our Favorites Since Last YearTools for the Front Line • Teller Rewrite • Streamlined flow for faster member service; consolidated funds in and posting screens • Comprehensive “Verify Member” pop-up window • Check Holds configuration • Automatic calculation of holds according to locale (R&T#) and $$ amount • Default holds to match your electronic (ATM) holds policies Coming soon...Business Day Calculator for teller holds and more!
Some of Our Favorites Since Last YearTools for the Back Office • One-click export of financial statements directly to Excel • Contingent Liability Analysis report and data capture Coming soon...consolidated financial statements for multi-corp processing! Coming soon...trend analysis and new tools to turn contingent limits into real loan balances!
Some of Our Favorites Since Last YearTools for Member Service • Member Personal Banker enhancements • Automatic reminder to sign the member up for e-services • Complete picture of the member’s e-status and everything you need to service the member in one handy location Throughout the next two years, It’s Me 247 is going to continue to develop the personal aspect of online banking Every point of contact with your member will need to amplify that commitment
Some of Our Favorites Since Last YearTools for Member Appreciation • Configurable Patronage Dividends: making ownership dividends real for your members • A new, standard program to let you post special bonus share dividends and/or loan interest rebates to your members, without the usual custom programming fees and lead times • CU-defined configuration • Posting “audit” feature to allow you to forecast the expense and tweak the configuration settings beforeactually posting any dividends tomember accounts Included in the CU*BASE 8.0 (June) release...start planning now for year-end!
Special Year-End Announcement! • In the past, bonus programs required: • Lead time – notification required by mid-November • Programming Fees – typically $400-$750 per account type • Price change this year: Fees will be doubled and the lead time extended to September 30 – NO exceptions! • To avoid these fees, plan around the standard tool • If something is missing from the standard tool, let’s get busy on it NOW • Watch for some materials you can bring to your Board to start brainstorming on what is possible with the tools you already have Included in the CU*BASE 8.0 (June) release...start planning now for year-end!
A Report on Jump to the Future Invest...Execute...Earn!
Jumping to the FutureEvolving Capabilities • Remember this from last year? We threw down the gauntlet and started thinking about a new foundation for the next decade 2000 2002 2005 2008 2011 2014 2017
Jumping to the FutureEvolving Capabilities • Starting last year, we began shaking up some of the key foundations of the CU*Answers solution suite • It continues on into 2009 The future • ATM/Debit Pause for a Cause • “Under the hood” • CU*BASE Platinum • RDI ASP • Forms • Online banking 2008 2009 The past
Jumping to the FutureEvolving Capabilities On the way to the future, things change... • Starting last year, we began shaking up some of the key foundations of the CU*Answers solution suite • It continues on into 2009 The future • ATM/Debit Pause for a Cause • “Under the hood” • CU*BASE NGS • eDOC ASP • eDOC Forms • It’s Me 247 2008 2009 The past
Jumping to the FutureEvolving Capabilities • The confidence to redefine yourself and to reset the foundation for the next go-around requires leadership • And that brings us to the Robert H. Mackay award “The challenge of leadership is to be strong, but not rude; be kind, but not weak; be bold, but not bully; be thoughtful, but not lazy; be humble, but not timid; be proud, but not arrogant; have humor, but without folly.” Words to live by, shared by Bob MackayTaken from a quote by Jim Rohn
ATM “Pause for a Cause”Benefits Gained • Card system vs. account system • Unlimited cards and card products per account • Cards can access accounts across member bases • Two name lines (if supported by switch) • Reduced setup time for a new interface • For your staff: • More consistency across switches to reduce the learning curve when changing vendors...and complete online help (finally!) • Reconciliation and settlement improvements • Improved closed card and card deletion processes • Expanded configuration options • ISA fees, fee waivers and rebates, multiple debit card hold types • Online analysis of transaction requests (first for us, then CUs) • “Why was my purchase just denied at Best Buy?”
ATM “Pause for a Cause”Benefits Gained • Custom card stock by member (if supported by switch) • Single point card maintenance (if supported by switch) • Increased online availability (during nightly cycles) and eventual ability for redundancy on cuasterisk.com network • Data encryption for PCI DSS compliance • Per the email you received on June 4, the prototype for this is being released this summer when we begin encrypting card PANs in our online credit card database • Rules for data storage and accessibility by trusted insiders is changing...so we’re getting ahead of the game now iSeries box owners: This uses a special third-party utility (think $$)
Jumping to the FutureATM “Pause for a Cause” • Alpha (certification) testing two switches starting in August 2008 • CU*South with Fifth Third • CU*Answers with CO-OP • Beta testing two switches (with CUs) starting in September 2008 • Credit unions will see new CU*BASE screens and processes and staff will need to be trained • CU*South client(s) with Fifth Third • CU*Answers client(s) with CO-OP All 50+ CO-OP credit unions will be in this beta! • Starting in October, we will begin to roll these new features into the other ATM/Debit vendor switches The ATM Pause was a jump to the future, considered to be a 6-month project...it has turned into a journey to the future and will affect things for years to come
Old friends, never forgotten... The King of EFT Processing Jumping to the FutureATM “Pause for a Cause” • Best laid plans...not that much of a pause • Existing client ATM/Debit network changes 2 • New client ATM/Debit startups 8 • National Network Shared Branching startups 6 • Credit card conversions 11 • CU changes due to network switch mergers 7 • Compromised card mass reissue 1 • Network mandate projects (Track 2 elimination) 4 • Miscellaneous ATM/Debit projects (Falcon Fraud) 6 Total projects completed in addition to PFC 45
Jumping to the FutureATM “Pause for a Cause” A note from the EFT Team... Lately, CUs have been making decisions about changing vendors, new program startups (such as HSA debit cards), or “minor” configuration changes with their vendor...but leaving CU*Answers out of the loop. We don’t want to slow you down, but if we have to scramble at the last minute to make sure your plans stay on track, everything is at risk. In 2008, we created a new position specifically to coordinate with you and be your liaison to our programming team. Our EFT Product Specialist is Nadine Thomas (firstname.lastname@example.org, ext. 141). Much like a conversion coordinator, Nadine is at your beck and call from the time you think about making a change, to the moment that change goes live. Please take advantage of this new resource – we need to be involved in the choices you make with your ATM/Debit vendor! Don’t let your network salesman sell you into a poorly planned change!
An ATM Sidebar...PBFs: 7 Days for the Price of 5! • Sending PBFs 7 days a week...for the same price as 5 days a week • Operations will be offering a new service to send PBFs up to 7 days a week • Beginning with the 2009 business year (Oct. 1, 2008) • Look for announcements coming soon on what is available from your switch (5, 6, or 7 days) • Make sure you verify the cost of additional days with your vendor before you give us the green light • PBFs might not be your best bet for avoiding EFT fraud – dig a little deeper when it comes to understanding daily limits, deposit holds, and your options when your vendor is offline The big question is, when (if ever) will PBFs go away?
Jumping to the FutureWorkin’ Under the Hood Did these changes get by you, or did you notice? Is there something here that you should take advantage of in 2009?
Jumping to the FutureCU*BASE: The New GOLD Standard (NGS) • Time to start getting ready...Something BIG is coming this fall! • Like CU*@HOME, CU*BASE GOLD has been around a while • From August 1999: “CU*BASE ‘2’: A Focus on Presentation” • Time for the nextBIG change for CU*BASE GOLD...
Jumping to the FutureCU*BASE: The New GOLD Standard (NGS) • So how will NGS become a reality? • Involves a client upgrade on every workstation • JWalk Windows Client 3.1C3 LegaSuite Windows Client 4.1 • We have developed an automated tool, but someone needs to sit down at every workstation and run the tool (about 15 minutes per workstation) • As of January 2008 (online CUs): • Total # of terminals: 3,436 # of branches: 254 • Average # of terminals per branch: 14 • Median # of terminals per branch: 10 • Branches with more than 20 terminals: 49 • Branches with 20 terminals or less: 205 • Workstations may need to be upgraded to handle 1024x768 screen res. We’ll be offering a discounted price for a bulk purchase of flat-panel 17” LCD monitors (around $160-170 depending on the size of the order) – watch for an signup form coming in July!