Tips and ideas for your credit union
Experienced credit union managers know the value of objective ROI calculations. They’re especially good – and handy – to have in your pocket when it’s budget time and your goal is to get more funding for your department. The truth is, however, for certain business activities, it’s hard to get good ROI data. More often than not, it’s because there’s no ready access to good data in order to do the calculations.
The resources you invest in identity verification and fraud prevention are good examples of the second type
Fraud protection measures are a requirement. Your credit union has to have them. For starters, your members expect you to have strong fraud-protection technology in place. Further, regulations require you to be able to show your personal authentication and fraud-protection practices are in compliance. Finally, it’s simply good business to have them. Sound identity verification and proactive anti-fraud measures will save you money and help you avoid public relations nightmares.
You may not need rigorous ROI to establish the real value of your fraud prevention activity.
There are simpler ways to assess the value of your anti-fraud measures. It may be as straightforward as a basic cost/benefit analysis. Let’s look at how this might work.
There are several regular credit union activities and types of transactions which require your members to conclusively prove who they are. The activities include things like:
- New member onboarding
- Deposit account opening
- Loan applications
- Card applications
- And more.
The identity verification steps are typically carried out, monitored, or administered by a staff member. This takes time.
- How much time does each one take?
- How many do you do per business day?
And the activities have a cost. It’s the cost of the employee time * the number of verifications per day per branch * the number of branches. When you calculate this total for the month, it’s probably a significant number.
Fraud episodes also trigger significant costs.
First, the direct loss of money, potentially harming both the members and the credit union. Then, there’s the indirect cost of reputational damage when the news of the fraud becomes public.
Taken together, the labor costs, the losses, and the reputational damage can add up to a big number. And a big headache.
The direct benefit of MemberPass is it virtually eliminates fraud.
And it will reduce your otherwise constantly rising fraud-prevention expenses. The math is simple. When there’s minimal fraud, there will be minimal fraud-related costs. And the direct result of this is maximally happy members!