HOUSTON—The October 2016 MasterCard ATM EMV liability shift deadline may be approaching, but one ATM management company is not seeing a lot of credit unions rushing to convert their machines.
“This has surprised us,” said Dolphin Debit Co-Founder Gary Walston, who shared insights on several industry trends his company has noticed. “While many credit unions are pressing forward to upgrade their ATMs to meet the deadline, many have a laid-back attitude about the liability shift for ATMs. But once that deadline arrives, those credit unions that haven’t upgraded could be liable in cases of card fraud.”
Walston said the potential for increased fraud costs had been expected to be a good motivator to change over to chip-ready ATMs.
“But it doesn’t seem to be,” he said. “With other imposed changes—accessibility as mandated by the Americans with Disabilities Act and the discontinuance of support for Windows XP—we saw a real scramble to meet those deadlines. Perhaps the scramble will come eventually, but we’re finding it a little surprising that we haven’t seen that yet.”
Gary Walston
Anticipation And Uncertainty
Turing to the pending field of membership rule changes from NCUA, Walston said many credit unions are waiting with a fair amount of both anxious anticipation and uncertainty.
“Some credit unions are enthusiastic about the possibility of expanding their footprint, while others are cautious,” he said. “And we all know that when there is uncertainty, most organizations tend to be hesitant in the way they conduct their business. With the impact that these rule changes could have on credit unions, we’re definitely seeing the effects of that.”
Walston also noted that he is seeing a great deal of creativity in product development among credit unions—thanks to increasing regulation.
“Many credit unions are getting more and more creative when it comes to product development and business development,” said Walston. “We attribute this to regulatory burdens that are making it hard for so many smaller to mid-sized credit unions to compete by doing business the way they always have. They see new ways of reaching potential members and improving business among existing members as the key to surviving and thriving. In many cases, they are leveraging technology solutions to do that.”
Walston said it was this trend that prompted Dolphin Debit to recently launch subsidiary PerkUp, which allows credit unions to better penetrate their SEG groups by partnering with them in an innovative way. PerkUp is a financial wellness-based program in which credit unions place special kiosks into their SEG facilities. From those kiosks, SEG employees can engage in financial wellness activities, and do business—including taking out loans—with the credit union.
“Approaches like this allow a credit union to better penetrate an SEG without the cost of placing a physical branch there, yet maintain a constant presence through the always-available kiosk technology,” said Walston.