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CHARTING A PATH FORWARD
THROUGH STRATEGY & EXECUTION
June 2, 2020
• John Bratsakis
President / CEO
MD|DC Credit Union Association
MODERATOR:
CHARTING A PATH FORWARD THROUGH STRATEGY & EXECUTION
WELCOME
• Please make sure you are on mute
• To ask a question please feel free to:
• Use the Chat Feature
• Use Raise Hand Feature to ask question at any point during
webinar
• Link to recording and slides will be provided by
Wednesday afternoon.
• Douglas Leighton - VISA
• Head of Community Accounts
CHARTING A PATH FORWARD THROUGH STRATEGY & EXECUTION
MD DC Credit Union AssociationTown Hall
2 June 2020
Doug Leighton
Head of Community Accounts
Visa Inc.
©2020 Visa. All rights reserved. Visa confidential6
This presentation is furnished to you solely in your capacity as a customer of Visa Inc. and/or a participant in the Visa payments system. By accepting this presentation, you acknowledge that the information contained herein (the “Information”) is confidential and subject to the confidentiality restrictions contained in Visa’s operating regulations and/or other confidentiality agreements, which limit your use of the Information. You agree to keep the Information confidential and not to use the Information for any purpose other than in your capacity as a customer of Visa Inc. or as a participant in the Visa payments system. The Information may only be disseminated within your organization on a need-to-know basis to enable your participation in the Visa payments system. Please be advised that the Information may constitute material non public information under U.S. federal securities laws and that purchasing or selling securities of Visa Inc. while being aware of material non public information would constitute a violation of applicable U.S. federal securities laws.
Notice of confidentiality
©2020 Visa. All rights reserved. Visa confidential7
This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are generally identified by words such as “outlook,” “forecast,” “projected,” “could,” “expects,” “will” and other similar expressions. Examples of such forward-looking statements include, but are not limited to, statements we make about Visa’s business, economic outlooks, population expansion and analyses. All statements other than statements of historical fact could be forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond our control and are difficult to predict. We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our filings with the SEC. Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise.
Studies, survey results, research, recommendations, opportunity assessments, claims, etc. (the ‘Statements’) should be considered directional only. The Statements should not be relied upon for marketing, legal, regulatory or other advice. The Statements should be independently evaluated in light of your specific business needs and any applicable laws and regulations. Visa is not responsible for your use of the Statements, including errors of any kind, or any assumptions or conclusions you might draw from their use.
Forward-looking statements and disclaimer
©2020 Visa. All rights reserved. Visa confidential8
Online share of total debit spend is increasing, primarily driven by new use cases that shift consumer spending habits
37% 40% 44% 48% 48%
2017 2018 2019 Jan 2020 Feb 2020
CNP PV as a % of Total Debit
PV
CNP PV F2F PV
Source: VisaNet Consumer Debit (includes Interlink/PAVD), AFT data is included. CNP includes ECI / Recurring / MOTO codes
21%19% 19%
25%
6%
1%4%
8%
2018 2019 Jan 2020 Feb 2020
CNP vs CP YoY PV Growth
CNP YoY PV Growth F2F YoY PV Growth
Overall Visa system
©2020 Visa. All rights reserved. Visa confidential9
COVID-19 has accelerated the shift online
50%43% 45%
55% 60% 59% 62% 59% 60%
Week
of Mar
1
Week
of Mar
8
Week
of Mar
15
Week
of Mar
22
Week
of Mar
29
Week
of Apr
5
Week
of Apr
12
Week
of Apr
19
Week
of Apr
26
CNP PV as a % of Total Debit PV
CNP PV F2F PV
Source: VisaNet Consumer Debit (includes Interlink/PAVD), AFT data is included in overall but not in Retail CNP definition. CNP includes ECI / Recurring / MOTO codes. Everyday Spend includes: Food & Grocery, Discount Stores, Drug Stores & Pharmacies, Wholesale Clubs. Retail includes: Apparel & Accessories, Automotive, Department Stores, Direct Marketing, Electronics, Retail Goods, Retail Services, and Professional Services.
Online vs. Offline
Overall Visa system
April YoY PV Growth Total F2F CNP
Everyday Spend 28% 7% 110%
Restaurants -53% -71% 181%
Retail 2% -40% 62%
1CNP share increased in March and now represents the majority of total payment volume
2Everyday Spend, Restaurants and Retail all observed substantial CNP growth
©2020 Visa. All rights reserved. Visa confidential10
Exempt issuers’ YoY growth rates outpaced the industry average
34% 37% 41% 46% 46% 47%57%
2017 2018 2019 Jan 2020 Feb
2020
Mar
2020
Apr
2020
CNP PV as a % of Total Debit PV
CNP PV F2F PV
Source: VisaNet Consumer Debit (includes Interlink/PAVD), AFT data is included. CNP includes ECI / Recurring / MOTO codes
20% 19% 21%30%
11%
47%
6%1% 3%
8%
-11%
-29%
2018 2019 Jan 2020 Feb 2020 Mar 2020 Apr 2020
CNP vs F2F YoY PV Growth
CNP YoY PV Growth F2F YoY PV Growth
Exempt issuers only
©2020 Visa. All rights reserved. Visa confidential11
Prioritize the following:
Highlight debit security features
Develop a Card-on-File strategy
Prioritize instant digital issuance
and push provisioning
Consider incentives to
change consumer behavior
Make operational enhancements to address specific cardholder pain
points
©2020 Visa. All rights reserved. Visa confidential12
Visa Tokens can provide meaningful improvements
1. Authorization rate lift from decline codes within a sample of 17 merchants. Source: VisaNet, TC05, UC01, Brand: Visa, Excludes Processing Error Declines. Declines calculated as percent of total authorizations
(payment volume). Select Token participating Merchants (PAN and Token) with digital wallet TRs Issuer region US, July-Sept 2018, Potentially addressable by Token. Note: For purposes of these metrics, Super
Regionals” include the top quartile of issuers by Visa PV, Regionals include the second quartile and Community banks include all remaining issuers.
2. Fraud Rate Reduction: Source: CNP & CP Average is for set of Token participating Merchants (by Merchant DBA) (PAN & Token) with digital wallet TRs April-June 2018, Issuer region: US
+3.2%
Authorization rate lift1
+3.2%
Fraud reduction (PV$)2
26%
Comparing authorization rate at top merchants
for CNP token volume vs PAN
Visa Token transactions compared to
PAN-based transactions online
averageaverage
©2020 Visa. All rights reserved. Visa confidential13
Visa Tokens enhance the security & performance of Visa credentials across existing and emerging digital commerce experiences & form factors
Visa Tokens are designed to optimize the payment ecosystem
01Reduces risk of fraud &
breach by replacing
card numbers with a
token.
Each transaction is
processed with a
unique token +
cryptogram which
increases card
authorization rates
and decrease fraud.
0
2Secure transactions
Domain controls & fail safes secure
transactions across various devices
Enhance the token platform
Additional value-added services like Cloud
Token Framework, VCEH and VCES
enhance security & consumer experience
Dynamic capabilities
Quickly replace stolen credentials, cards
never expire, consumer maintains control
• Jenn Addabbo – CU Ledger
• Founder, Partner
CHARTING A PATH FORWARD THROUGH STRATEGY & EXECUTION
• James Guild – CU Engage
• Managing Partner
CHARTING A PATH FORWARD THROUGH STRATEGY & EXECUTION
Adapting Your Strategic Focus to Meet Changing Member Needs while Optimizing ROI
CU Engage
Jennifer Addabbo
Experience: 16+ years in Business Development and Strategic
Marketing
Specialties: Sales Management, Complex Financial Services Strategy,
Card Payments and Strategy, Digital Banking, Internet Banking + Bill
Pay, Mobile Banking
Past Experience: PSCU, FIS
Location: St. Petersburg, FL
Experience: 24+ years in Leadership, Business Development and
Strategic Consulting
Specialties: Core Data Processing, Innovation Solutions Cards and
Payments + Strategy, ATM, Prepaid and Loyalty Programs
Past Experience: Fiserv, PSCU, Open Solutions/DNA
Location: St. Petersburg, FL
James Guild
04030201
Leaders in the financial
industry were setting
strategies for what looked
to be another steady year of
growth in 2020.
November – December 2019
Kicked off the new year at
GAC, credit union industry
was gearing up for
tradeshow season and news
began to trickle in about
coronavirus in other
countries. Unsure of impact
on the US.
January-February 2020
In what seemed to happen
overnight, the financial
industry had to dust off the
crisis management handbooks
and figure out how to conduct
business amid a pandemic.
Credit unions took it as an
opportunity and stepped up to
the plate.
March – April 2020
As America “opens up”, financial
institutions continue to show their
true colors. Credit unions have shone
throughout the pandemic as a
reliable trusted source for their
members and helping their
communities and employees as they
adjust to job loss and begin to see
possible long-term effects of the
pandemic.
Today
CHANGING PRIORITIES
So
urc
e: D
BR
Re
sea
rch
© D
ec
em
be
r 2
019.
Th
e F
ina
nc
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Simplify the customer Journey
Top 5 Trends for 2019
(What really happened…)
52%
50%
Improving data analytics
capabilities and insights43%
54%
Expanding digital payment
capabilities31%
24%
Improving integration of delivery
channels31%
32%
Open banking and use of APIs 30%37%
Actual
Projected
Sources: https://newsroom.accenture.com/news/only-half-of-banks-globally-are-making-significant-advancements-in-digital-transformation-resulting-in-lower-market-valuations-accenture-report-finds.htm
https://www.cujournal.com/opinion/coronavirus-shows-why-credit-unions-need-a-digital-strategy
March 2020
Source: https://www.businesswire.com/news/home/20200402005497/en/
Dig
ita
l Pro
vid
ers
MobilitimFoundry
Orpheus
Morpheus
Corillian
Architect
Banno
Crowded Marketplace
+
* Vendors listed to not represent an exhaustive list
Architect
CUSOs or CU Specialist
Corillian & Mobiliti
Emerging
Incumbent Providers
Banno
+
Dev. Platforms
Common Competitors(All with SDKs)
Vendors listed to not represent an exhaustive list.
Fin Tech’s that may make their mark due to the
changing times
• Easily offer loan refinances
• Retain loans
• Offer digitally delivered to member
• Member digitally signs and completes the process in 90 seconds.
Loan Refinances
• Voice and Message
• Knowledge & Support
• Personal Financial Management
• Chat bots
Conversational Banking
• Move direct deposits
• Set up recurring payments
• Quick APIs
• Helps CU become PFIs
Drive Deposit Growth
• Video enabled branches
• Mobile video banking
• Tool to assist in completing remote transactions
• Interactive and secure
Video Banking
• Small business lending
• Stand up site in 30 days
• Services integrated like underwriting
• Full visibility into the member journey
• Touts exceptional service
Small Business Loans
• Guides prospects to applications
• Provides text reminders to complete loan process
• Connects with loan origination system, online applications and CRM.
Lead Generation
• Automated financial advice
• Establish a financial strategy
• Provides recommendations based on the member’s spending habits
Financial Management
• Donation platform
• Integrates with digital banking platforms
• Allows members to seamlessly donate to their favorite charity
Philanthropy
• Customer service interactions from any channel
• Easily switch from chat to video to co-browse
• Assist new members with the onboarding process
Digital Customer Service
What are our Credit Unions
doing and what do you
need to be considering?
Listening to our Board of Advisors!
• Every Credit Union is experiencing different challenges
• Relevantly Respectful
• 1st and 2nd Quarter Financial Impact
• Maximizing Digital Footprint
• Leveraging Partners for “heavy lifting”
What we heard?
ROI –Income and Expense Strategy
ADJUSTING THE FOCUS.
Listening To
Changing
Member
Needs
Re-align
Strategic
Priorities
Opportunity To
Identify Gaps
In Products and
Service
• Members: 92,000
• Assets: $1.1B
• Online & Mobile: NCR Digital Insight
• Bill Pay: FIS
• Core: Fiserv DNA
• Credit Cards: FIS – Visa Brand
• Debit: Vantiv/worldpay/FIS – Mastercard brand
• PIN Networks: NYCE, STAR
Credit Union Profile - Opportunity
Focus, Ownership,
Execution….. Keeping your Member at
the center of every decision
• Know your Expiration Dates• Notice of Non-Renewal -• Start Process 2 Years out• Options – Renegotiate – Conversion• Early savings
Contract Dates – 2
Years!
• Maximum of 1 Year Auto Renew• Deconversion and LDs• Service Level Agreements• Growth – M&A
New Contract Terms
• Partners with Open APIs• Leverage Digital Banking Integration• Cost of APIs – Per Call vs. Fixed
Integration - APIs
• Member Journeying• Loyalty/Rewards• Incent behavior• PAU – Penetration/Activation/Usage
Leverage Analytics
Streamline Vendors for
Member Experience
Invoice Analysis
• Credit and Debit Card• Fraud, Reporting,
Servicing• PIN Networks• VISA and mastercard
• Largest Expense • Billing Errors• Mid Term/ New Term• Core• Card Payments• Digital Banking
CU Engage Contract Analysis Program (CUE CAP)• Launched in March 2020• One page view of critical contract
dates• Great at a glance for 2021 and 2022
planning• No cost to Credit Unions• Additional deep dive analysis
available
Thank You James Guild
Founder
(727) 698-9973JGuild@CUEngage.com
Jenn AddabboFounder
(813) 362-4622Jenn@cuengage.com
• Lynn Heckler – PSCU
• Chief Talent Officer
CHARTING A PATH FORWARD THROUGH STRATEGY & EXECUTION
The Human Aspect of COVID 19 in the WorkplaceLynn Heckler
Chief Talent Officer, PSCU
46 ǀ 6/2/2020 © 2019 PSCU. All rights reserved worldwide. Confidential – do not copy or distribute without permission.
Our Response to this Pandemic will Impact our Employer Brand
for DECADES
47 ǀ 6/2/2020
March – May 2020…What Just Happened?
150%increase in call
volume
75%With 2 weeks,transitioned
of employees to remote
90%Employees now work remotely 3 of 6
Offices open with minimal staff
48 ǀ 6/2/2020
Designing a WFH and RTW Strategy
Considerations:
TheOrganization
The Role
The Team
The Individual
Source: Gallup
49 ǀ 6/2/2020
▪ Data and Information
▪ Employee Considerations
▪ Site Readiness
▪ Technology
▪ Financial
▪ Communications
50 ǀ 6/2/2020 © 2019 PSCU. All rights reserved worldwide. Confidential – do not copy or distribute without permission.
Anyone can lead when the plan is working. The best lead when the plan falls apart.
-Robin Sharma
• John Ainsworth – CU Ledger
• President/CEO
CHARTING A PATH FORWARD THROUGH STRATEGY & EXECUTION
• Mark Sievewright – Founder & CEO
• Sievewright & Associates
CHARTING A PATH FORWARD THROUGH STRATEGY & EXECUTION
Adapting to New Realities in Financial Services
53
Mark Sievewrightmark@msievewright.comJune 2, 2020
The expansion and acceleration
of Digital Transformation with an
increased focus on Digital Trust
Decline in branch visits
and ATM transactions
Increased focus on “touchless”
interactions and payments
Reduced dependency on
the physical workspace -
toward a new WFA philosophy
The Impacts from COVID-19 are advancing a set of New Realities in Financial Services
The emergence of a Carpe Diem moment for America’s Credit Unions
Adapt yourCredit Union’s StrategyNOW toBecome Future-Ready!
• How will you handle 200% in call center and drive thru traffic?• What privacy concerns do you have with remote call center
employees?• How can you ensure that your member is not a fraudster?• How will your members know it’s your credit union calling
them?• Will your members want your staff to touch their driver’s
license?• How will you verify your member’s covered face against a
physical ID?• How do you trust that the ID you’re given hasn’t been tampered
with?• What personal health and safety concerns will your members
and employees have?
Why enhanced Digital ID Verification is a must
• John Bratsakis – President/CEO• Phone: 443-325-0774• Email: jbratsakis@mddccua.org
• Michelle Byrnie-Parker –SVP/Chief Public Relations Officer• Phone 443-325-0769• Email: mparker@mddccua.org
• Rory Murray – VP – Advocacy• Phone 443-325-0775• Email: rmurray@mddccua.org
• Andre Lucas – Dir. Compliance• Phone 443-325-0777• Email: alucas@mddccua.org
Website:
• Credit Union Resource Page:
• https://mddccua.org/index.php/news-cu-community/1681-workplace-guidance-preparing-for-and-responding-to-coronavirus
• League Infosight
• https://mddc.leagueinfosight.com/
• Consumer Resource Page:
• https://www.mddccua.org/index.php/news-cu-community/1713-consumer-guide-to-credit-unions-serving-maryland-and-dc-area
ASSOCIATION RESOURCES
• Doug Leighton – VISA• Head of Community Accounts
• Email: Leighton@visa.com
• Jennifer Addabbo – CU Engage• Founder, Partner
• Email: jenn@cuengage.com
• Phone: 813-362-4622
• James Guild – CU Engage• Managing Partner
• Email: jguild@cuengage.com
• Phone: 727-698-9973
• Lynn Heckler – PSCU• Chief Talent Officer
• Email: lheckler@pscu.com
• Phone: 727-571-7995
• Mark Sievewright – Sievewright & Assoc.• Founder & CEO
• Email: mark@msievewright.com
• Phone: 617-852-9626
• John Ainsworth – CU Ledger• President/CEO
• Email: jainsworth@culedger.com
• Phone: 804-763-9280
SPEAKER CONTACT INFORMATION
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