'The Antithesis of Black Friday'
Credit unions have spent the past several years trying to find ways to help their members afford Black Friday – and in many cases churning out more and more creative each offers year. But 2016 marks a slight shift from the norm as a number of credit unions are turning back to the movement's roots and shifting the focus from spending money to saving it.
One example of that is Colorado-based Public Service CU, which is offering a one-day-only Black Friday promotion on certificates, giving members 3% APY on a 24-month CD for up to $10,000.
Joe Greene, VP of marketing at the $2 billion-asset institution, emphasized that "we're in the business of helping our members afford life" – a sentiment that doubles as the credit union's purpose statement.
"Lending products are a good way to [live up to that purpose] and if you're offering a better rate on a credit card or a home equity line of credit, that's a wonderful thing," he said. "But we wanted to focus on the antithesis of Black Friday's tradition of spending, and we thought this would be more interesting and more true to our purpose statement. It's the opposite of what Black Friday is all about, which is waiting in line at a big box store to spend money. We thought we'd help people save and earn some money."
Only one certificate is available per household, the offer is only available on Friday, Nov. 25, and members must go into a PSCU branch to take advantage of it. The credit union has used a variety of advertising methods to get the word out, including radio, newspaper, direct mail, email and social media marketing.
"We've been hearing a lot of buzz from our branches," said Greene. "It's not Black Friday yet, so we don't know how many people this will draw, but the anticipation, excitement and feedback we've gotten from our members has been very encouraging. We're excited to see what happens when people recover from their turkey-based tryptophan and come into our branches to take advantage of this offer to earn more from their savings."
West Coast Federal Employees CU in Sarasota, Fla. has also jumped on the savings train, partnering with South Carolina-based Your Marketing Co. to craft a savings guide for members that was released shortly before Black Friday.
"We wanted to create different opportunities for [members] to budget, to plan and to make sure they didn't over-extend themselves instead of pushing them to get credit cards. It was a different approach from normal," explained Haley Kennedy, relationships and results leader at YMC, who worked on the savings guide with WCFECU CEO Marie Peet.
Peet was not available to speak to CU Journal before deadline.
The content for the savings guide was culled from online resources such as PassionForSavings.com and then tailored to the credit union and its membership. Kennedy said that her organization often works with West Coast Federal Employees CU to put together different guides for the membership, including a recent document on hurricane preparedness.
"They have a diverse membership group – a large portion of the community are holder and have been part of the credit union since it was primarily postal employees, but we're also seeing growth in the local Hispanic population and trying to serve more people with less-than-perfect credit," she said.
Rather than offering a Black Friday loan promotion, WCFECU hopes the savings guide will differentiate it in the marketplace while also meeting a need a need of the membership.
"Education was the main goal with the guide," said Kennedy, adding that the document was released to coincide with the launch of the credit union's refreshed branding.
"The goal of the refresh was to become more community oriented and let people know that membership isn't exclusive to federal employees anymore," she added.
Cyber Risks on the Rise
The push to move members away from Black Friday spending to savings comes after more than two years in which data breaches at major retailers and other institutions have been at an all-time high. And a new study reveals the risks are shifting from consumers' wallets to their phones and tablets.
That's according to James Pleger, director of security and threat research at RiskIQ, which recently published a new report that found alarming new trends in around fraudulent mobile apps disguised to be identical to those of major retailers, or that directed users to phishing sites and other scams.
According to RiskIQ, one in 10 mobile apps that come up when searching for "Black Friday" in the global app stores are blacklisted as unsafe to use and malicious. On top of that, leading retail brands have nearly 1,100 blacklisted URLs with their brand names and the term "Black Friday" linked to malicious phishing, malware and spam.
"You have a one-in-ten chance of finding some impersonating app," Pleger told CU Journal. "The brands have a really bad problem, because now you have consumer that thinks, for example, that they're going to JC Penney and all of a sudden their credit card [information] gets stolen. You also have the issue of consumer fraud. These shopping holidays are huge – and there's so much money being spent not only on marketing, but on brand awareness – and everyone's searching for these terms. It's a perfect time for bad guys to cash in on that and use this to their advantage."
Making the situation more difficult, added Pleger, is the fact that some retail brands have done a poor job of protecting their own identity, which in turn puts consumers at risk.
"I'd love to see more accountability in that space," he said. "If you own the brand and somebody is using that brand in a malicious fashion to dupe consumers and you know about it, do you not have a responsibility to protect your brand and protect consumers visiting your website?"
Pleger's remarks echo those of most of the rest of the credit union community, which has spent years lobbying Congress to put in place stricter data security standards for retailers so that merchants will be held liable for consumer losses following a data breach, rather than credit unions and banks. If a consumer mistakenly downloads a fraudulent retailer app and is victim to a scam, their FI will be on the hook for those losses.
That, says Pleger, is where credit unions can step in.
"A lot of financial institutions over the last four or five years have become really proactive about monitoring their users," he said. "A lot of times these things can be found through proactive monitoring of user account activity. Even credit unions that haven't stood up a robust program like that should start looking at that. It's a lot easier to reissue a card in some cases than eat a giant amount of loss related to fraud."
The RiskIQ study also bears out predictions from payments analysts that card-not-present fraud would rise once EMV cards were more broadly used. But Pleger noted that chip-and-PIN implementation at retailers is still ongoing, and as it becomes more widely adopted, he predicted a decline in fraud – particularly if legislators take action to put retailers on the hook for losses incurred as the result of a data breach.
Beyond Black Friday
The irony behind some credit unions' move to promote thrift is that it comes at a time when household incomes have finally reached the point where they were just before the start of the Great Recession. Data shows credit union lending continuing to rise, delinquencies remaining low and rising consumer confidence.
"Consumer confidence numbers have come up over the last several years," noted Public Service CU's Greene. "They're more confident with spending; more have felt like 'Now I can take whatever the money is to redo my kitchen or purchase a new car.' But there's also a lot of caution out there. People have gotten burned and continue to get burned by financial institutions. And while the unemployment rate has come down, it wasn't that long ago that there was a lot of uncertainty in the market. People are still looking for the right kind of savings and investing opportunities."
And while PSCU isn't sharing any specifics, Greene said he believes the potential for boosting savings behaviors goes way beyond Black Friday and into 2017.
"We're looking at other opportunities to get the savings and investing message out there – to do something that is fun and catches people's attention, but also helps bring our members to these savings products…We think it's possible to catch people's attention and make them aware that savings is important, and put opportunities out there to continue to get the best savings possible."