Visions - September 2007

Click a headline below to view articles:

• Get Ready for the New Age
• Project New Age Webinar Dates
• Industry Leading Security Efforts Minimize Fraud
• Surprise, Surprise
• Free Consulting Propels Debit ROI
• Adding CURewards Helps Deliver 56% Jump in Debit Card Activation
• Fee Waivers Give Immediate Return of Value
• Helping Hand Rewards: Products that make a Difference
• Customized CURewards Delivers Cost Controls and Higher Member Satisfaction
• ‘Bringing up Baby’
• Digital Plastics Deliver Charitable Returns
• Redwood-Sized Growth
• Thought Leadership Sessions
  

Get Ready for the New Age:

Cooperative Helps Equip Credit Unions to Attract Young Adults

Financial services are entering a new age. It’s a
new age for marketing that’s being driven by the preferences of the 79 million Gen Y Americans.
And credit unions need to attract members of this new age in order to build success in the next decade and beyond.

PSCU Financial Services is developing and launching Project New Age to help credit unions understand how to reach the members of Gen Y that are 12 to 30 years old in 2007. This innovative program will consist of education about the unique needs of this generation, marketing and advertising strategies that reach Gen Y and a product strategy that focuses on each stage of this generation’s journey to adulthood.

Join our series of webinars designed for managers of credit/debit and other lending products as well as marketing directors and executives. These seminarswere developed for—and exclusive to—our member-owner credit unions. Attendees will learn how different this generation is and how to reach them with marketing and advertising as well as the most appropriate financial products for each stage in their development. Topics will include: blogs, viral marketing, social networking outlets and the power of Myspace.com.

The good news: The values of Generation Y are a perfect match for the mission of the credit union industry. These young adults value corporate responsibility and prefer brands known for involvement with not-for-profit causes and community activism. They therefore favor smaller, local institutions that offer personal attention over large national corporations with multi-million-dollar advertising campaigns.

Does this sound like a match made in heaven? We think so, but it’s going to take some work to create a relationship with this ad-weary, media-savvy generation.

PSCU Financial Services has invested significant resources in creating a program that will not only educate credit unions but also equip them with special web tools to attract Gen Y and their parents. Serving this generation is critical to the success of each individual credit union and the entire industry. Let us help you get up to the speed on the New Age. Register for a webinar at https://pscufs.webex.com.

All sessions start at 2pm EST.
Register at: https://pscufs.webex.com

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Sales Industry Leading Security Efforts Minimize Fraud

PSCU Financial Services’ commitment to security and fraud minimization is a model for the credit union industry. Our CUSO continues to be a leader in the financial services industry achieving companywide one of the lowest fraud to sales ratios of 4.8 cents per $100 in sales. This ratio which compares favorably to Visa’s overall rate of 6 to 7 cents fraud loss rate.

By deploying neural network technology, including Falcon and
Visa Advanced Authorization, and engaging skilled fraud analysts to look at and if necessary block transactions, security management is provided around the clock. With more than 50 years of experience in fraud detection, our analysts continually look for activity abnormalities and adjust strategies real-time to identify potential fraud.

“We make outbound calls throughout the day as state calling laws permit to speak to cardholders about transactions that we have identified as having a high risk of fraud,” said Steve Ruwe, Chief Risk Officer of PSCU Financial Services. “And, live operators are available 24/7 to service inbound calls and help cardholders validate charges and process lost/stolen transactions if necessary.”

Ruwe continued, “Even with all that goes on at PSCU the credit union staff still plays an important role in fraud prevention, which means remaining vigilant in managing the exception reports, helping their members understand how to protect themselves, and taking advantage of educational opportunities such as our Security Summits.”

By fourth quarter this year, MemberConnect will provide members with the calculated fraud loss to sales ratio for their individual credit union. This will enable members to track their performance and assess the
success of fraud management efforts.

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Surprise, Surprise

Capture a portion of the growing prepaid gift card market with turnkey marketing support. Attention-grabbing Surprise, Surprise! themed marketing materials including posters, lapel stickers, table tents, web banners, and training guides will be available at no charge online September 1st at www.pscuprepaidmarketing.com for credit unions issuing gift cards through PSCU Financial Services. Participating credit unions can set amount thresholds to provide gift card purchasers with instant win game pieces that offer the chance to win thousands of prized instantly. And, the Surprise, Surprise! campaign, which runs through the end of the year, offers an employee incentive as well.

Adding Value to Prepaid Programs
Members can benefit from comprehensive marketing support including themed J-Hook displays and hangtags, gift card packaging, prewritten press releases, newsletter articles, statement messaging, email campaigns and more, each designed to help credit unions grow their gift and reloadable card portfolios. PSCU can supply a wealth of turnkey marketing materials for gift cards, and reloadable travel, student and general purpose cards — something for every market segment.

New this summer is an online video, an education tool designed to help members get acquainted with the uses and benefits of reloadable travel, student and general purpose cards. Member credit unions can post the video on their web site to educate members and ultimately sell reloadable cards. Each credit union‘s name and logo can be loaded into the video presentation to increase brand recognition. For more information, contact your Account Executive.

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Free Consulting Propels Debit ROI

For most issuers, debit cards represent a significant piece of non-interest income. So taking the time to evaluate your debit card portfolio’s performance can provide an attractive payback. That is where PSCU and our industry expertise can help.

PSCU Financial Services’ Norm Patrick, Director, Debit Strategic Consulting explains, “In a typical Debit Strategic Consulting engagement we gather all the necessary data to get a 360 degree look at the credit union’s signature and PIN debit programs, regardless of what debit platforms are deployed. We first create a three-year profit and loss statement which is key to determining current and future performance.”

Next the team evaluates key debit performance metrics, such as checkingpenetration, active rate and usage, and then compiles and delivers strategic recommendations for how the member credit union can improve their debit portfolio’s performance and provide a more relevant and competitive debit card offering to their members.
Member credit unions can benefit from a free Debit Strategic Consulting engagement by contacting their Account Executive.

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Adding CURewards™ Helps Deliver 56% Jump in Debit Card Activation

DuPont Community Credit Union, of Waynesboro, Virginia, boosted the number of active accounts for its debit portfolio by an amazing 56 percent in just one year through the addition of the industry’s leading rewards program: CURewards™.

“Adding CURewards to our debit platform was a major motivator for our members. We achieved dramatic results with a modest marketing
effort that included newsletter articles, a statement insert, web site
advertising and staff training,” said Cindy Nuckoles, DuPont Community Credit Union’s Member Support Manager.

Cardholders like the ability to combine points from their credit and debit accounts, explains Nuckoles. She adds that offering an attractive rewards program eased the transition for members who were issued debit cards to replace ATM-only cards, which are being phased out.

The credit union offers Visa signature, PIN and business debit cards and has seen a significant increase in both signature and PIN debit transaction volume as the percent active rose to over 64%.

“Debit can represent a significant share of non-interest income for a credit union and its value should not be underestimated,” said Nuckoles. “It’s important to add features to the debit program that members value to make the offering competitive. Certainly the CURewards program is an excellent way for us to attract new accountholders and to retain them as well.”

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Fee Waivers Give Immediate Return of Value

To help members grow and manage card programs, a number of solution-related fees have been waived for the remainder of 2007. These include Business Card BIN start-up fees, as well as the monthly maintenance charges associated with DataChoice™, a performance measure management tool designed to help credit unions mine the card portfolio at the cardholder activity level.

Implementation fees for Account Level Processing (ALP), a risk based pricing tool and Adaptive Control System (ACS), a solution employing advance analytical modeling for an automated credit line increase, reissue and/or collection strategies are also included in the fee waiver initiative. Credit unions implementing InfoLinkPlus, a web delivery of cardholder self-service information and Data eXchange, leading-edge technology that produces data on demand to populate online applications before year end will also benefit from the immediate return of value.

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Helping Hand Rewards:
Products that Make a Difference

Hinda Incentives, the merchandise supplier for CURewards™, has launched a new initiative called Helping Hand Rewards that will provide your members with access to “good and green” products. These products are produced by companies with a social mission – they are either environmentally friendly, employ needy people in their production, have some unique benefit to our society or meet all of these criteria while generating revenue in support of their social mission.

Doing Good is Good For Business

Many corporations have realized the benefits of socially responsible practices – consumers are requesting these types of social purpose products. Current research indicates that not only are corporate managers increasingly more interested in social responsibility, corporate managers and consumers prefer to purchase products that are linked to a social responsibility mission.

Recognizing an opportunity to make a difference and meet this
emerging business opportunity, Hinda established Helping Hand Rewards, a company whose primary mission is to serve as a conduit between social purpose organizations that produce merchandise and businesses that want to reward those who perform on their behalf. The long-term objective is to help expand the revenue base for these organizations to create more opportunities for people to improve their lives.

The Enterprising Kitchen (TEK), a Chicago-based nonprofit social enterprise manufacturer of natural soaps and spa products that provides job training to women who have been underemployed, is one of the social purpose companies. TEK gift baskets are available in the CURewards program.

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Customized CURewards™ Delivers Cost Controls and Higher Member Satisfaction

As a direct result of feedback from member credit unions, we have added new levels of customization to our popular CURewards™ program. Now credit unions have the option of setting the cost per point, redemption point thresholds and expanding merchandise reward options. Since each credit union can choose thepoint requirement for redemptions, issuers now have more control over costs. With this customization, credit unions can adapt the program to suit the unique needs of their members.

VyStar Credit Union of Jacksonville, Fla., launched customized air travel rewards earlier this year and removed restrictions including advance purchase and Saturday night stays. They also lowered the minimum redemption to 15,000 points and now offers a tiered point structure. “The lower point level allows our members to earn roundtrip airline tickets quickly. Redemptions are higher and our members are much more satisfied. They also appreciate the convenience of being able to redeem points online at any time of the day or night,” said Kristen Hinton, VyStar’s Card Services Manager. Quorum Federal Credit Union of Purchase, N.Y., elected to customize its CURewards program by expanding its merchandise offering to 3,000 brand name items. The credit union eliminated product tiers to streamline the offering and opened up the entire catalog to their members. “Our members love the convenience and flexibility of being able to order anything in the catalog. This rewards program enhancement pays off by making our card platform even more attractive to our members,” said Bryan Woodward, Quorum’s Vice President of Lending and Support Services.

CURewards serves more than 2.5 million debit and credit cardholders from 230 credit unions. This innovative rewards platform generates impressive results:

• Growth in gross active credit card accounts of 22.9%
• Gain in outstanding balances of 38.9%
• Boost of 43.8% in exchange income; and
• Increase of 17.4% in transactions per active account (an average of 23 additional transactions a month).

For more information on the latest upgrades to the industry-leading CURewards program, please contact your Account
Executive.

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‘Bringing up Baby’

Promotion Drives 24% Increase in Online Bill Pay Subscribers in Just 45 Days

Montgomery County Teachers FCU (MCT) of Rockville, Md., achieved an impressive 24 percent increase in subscribers when it launched its PayLynx online bill payment program this summer. The platform offers member-pleasing features, but it was the credit union’s use of innovative promotions for members and employees that spurred a dramatic rise in subscriptions.

“We converted to PayLynx because it offered so many benefits for our members. The challenge was to promote the new program and make sure that members understood its user-friendly features,” said Lori Lee, the credit union’s eProduct Manager, Marketing. “We wanted our employees to be subscribers because we knew that as PayLynx users, they would be much more enthusiastic in educating others about its capabilities.”

MCT branded its online bill payment product: Web Bill Pay. In just 45 days, the credit union achieved:

• 24% increase in members using Web Bill Pay – representing 570 new enrollments and
• 125% increase in employee subscribers, with 45% of staff using the new system.

The credit union boosted subscription and activation rates by entering both member and employee subscribers in drawings. Each time a member made an online payment during the two-month promotion, they were entered to win $1,000 in credits for a monthly online bill payment. Each time an employee made an online payment, they were entered to win free tickets for a movie theater, boat cruise and other attractions.

MCT’s member magazine and online advertising featured an attention-grabbing photo of a baby at a laptop computer. The message was: “The only thing easier than signing up for our new Web Bill Pay Service is using it.”

Members were also invited to view a professional, contemporary online video furnished by PSCU Financial Services for use on credit union web sites. The video’s link to register for the service generated impressive
results in the first 45 days, with a 31% enrollment rate.

The PayLynx platform offers: same day or next day payments, the ability to schedule payments for the due date, bill reminders and industry- leading fraud prevention technology.

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Digital Plastics Deliver Charitable Returns

For more that 15 years, Christian Community Credit Union of Covina, California, has built a successful credit program by making charitable donations to Christian ministries and missions each time the card is used. Since 1994, the credit union has distributed over $2 million to charitable causes by allocating a percentage of its interchange income.

Now the unique advantages of the cooperative’s new digital plastics platform allows Christian Community to create credit cards that are even more closely linked to the charities supported by its members.

“Many of our missionaries closely identify with their specific charities and missions,” said Linda Tashiro, Senior Vice President, Christian Community Credit Union. “We are launching a unique branded card promotion with one of our sponsors, a group of over 150,000 individuals that supports flights to remote areas to deliver humanitarian aid. Cardholders can make valuable contributions to this ministry just by using their credit card.” Users will be able to choose from one of four card designs that symbolize this charity’s mission. A percentage of the interchange income will go directly to the sponsor’s charitable efforts each time the card is used.

Digital plastics allow the credit union to deliver custom branded plastics without a large upfront inventory investment. Credit unions only pay for the cards they order, no minimum order is required and the price is comparable to standardized plastics.

Christian Community CU is currently evaluating extending the brand recognition to the monthly cardholder statements via Super Cool Statements, another new product from PSCU Financial Services.

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Redwood-Sized Growth

Redwood Credit Union, of Santa Rosa, Calif., has posted continuous double-digit growth in its credit card portfolio for the past three and a half years thanks to a focused plan that involves member
promotions and an employee incentive program. The credit union achieved 23 percent growth in outstanding credit balances in 2005, 28 percent growth in 2006 and is on track to post 19 percent growth in 2007.

Portfolio growth began when credit cards became part of the consumer lending area, managed by Darrin Logasa, the credit union’s Senior Vice President of Consumer Lending Services. Logasa spearheaded the effort to promote credit cards and make them more attractive to members.

His staff and the credit union’s marketing department developed an annual plan for promotions and worked with a PSCU Financial Services representative to create offers that include low interest rates on balance transfers, a cash-back card activation campaign and automatic credit pre-approval for all consumer loan and mortgage applicants. The difference in portfolio performance is dramatic: prior to energizing and promoting its credit offering, outstandings grew only about 2-3 percent a year.

“Redwood Credit Union’s experience demonstrates the wisdom of investing in credit cards and making these cards part of the consumer lending business. Our experienced AdvisorsPlus professionals work with credit union staffs to design successful promotional campaigns that are easy to implement and manage,” said David J. Serlo, PSCU Financial Services.

The credit union reorganized its portfolio into Classic and Platinum Visa accounts and offers the popular CURewards™ points on both platforms. In addition, the credit union redesigned its plastics to show colorful local North Bay landscapes, which have proven extremely popular with members.

“Members have responded well to our ongoing series of promotions that remind them about the advantages we offer. In order to achieve top-of-wallet status, you first have to gain top-of-mind awareness,” says Logasa.

Redwood Credit Union promotes its credit card offering in numerous marketing promotions throughout the year and also through its branches and online. They also conduct ongoing employee training and competitions.
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Thought Leadership: Get the Details

PSCU Financial Services is hosting FREE online educational sessions each designed to deliver the most current industry
intelligence on a variety of topics. For start times and to register for these Thought Leadership Sessions, log on to https://pscufs.webex.com.

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