Credit unions pride themselves on superior customer service and excellent relationships with their members. To uphold this reputation, credit unions must continue to focus on member convenience and security.
One of the most simultaneously frustrating and terrifying situations for consumers is realizing their debit or credit card is missing without an idea of where it might be. Not only is this person's financial information at risk, but his or her purchasing power is now gone.
Financial institutions that work to relieve this burden immediately gain customer appreciation and satisfaction.
Mobile apps provide greater security to members
A mobile banking app with the right capabilities can be the first step in fraud prevention when a member's card is lost or stolen. The ability to freeze a specific card from the app disallows any further transactions to be made with that card until it's found.
Of course, there are times when a card goes missing but the owner doesn't notice right away. In these cases, the thief could attempt to make a purchase with the newly stolen plastic. Mobile banking apps can help with this, too.
Push notifications can allow cardholders to authenticate purchases through the app on their phone. When a criminal attempts to make a purchase with a stolen card, the member can use the mobile app to deny the transaction.
After pausing a card or declining a transaction, Credit Union Times pointed out that a mobile app may allow a member to arrange for a new card to be made. They could then go to a physical branch to pick up the instant issued card.
The mobile app can add another layer of security at this point, too. IBeacon technology can identify members as soon as they walk through the front door. A push notification verifies their identity, and the instant issuance can then take place.
This capability not only makes the entire card replacement process faster and more convenient for the member, but it also prevents criminals from obtaining a card to someone else's account. When the criminal walks through the door, the iBeacon technology wouldn't be able to identify him or her, and the push notification wouldn't arrive on the criminal's phone, but the account owner's instead.
This type of fraud - using stolen information to obtain a card under someone else's account - has become more common among financial institutions that invested in instant issuance. Five years after announcing it would have this capability in about half of its branches, JPMorgan Chase is cancelling its instant issuance program, according to PYMNTS.
A primary reason for the cancelation is the increase in fraud involving fake IDs presented to get cards linked to the victim's accounts. This scam has been prevalent for about two years, and even though JPMorgan changed its policy to require people to use the same ID to get a new card as they used when they opened the account, it continued to be a problem. JPMorgan spokeswoman Anne Pace noted that cost cutting efforts also contributed to the decision to cancel instant issuance.
Instant issuance becomes a key service
JPMorgan was one of the first financial institutions to implement instant issuance, and many banks and credit unions brought the capability to their own branches shortly after, PYMNTS pointed out. Though JPMorgan is cancelling its program, many are keeping the service on because it has become an attractive convenience to the customer.
Cardholders who receive an instantly issued card are 22 percent more likely to be very to extremely satisfied with their financial institutions than those who receive their cards in the mail, according to one Javelin Strategy study.
Further, 58 percent of respondents who had a card instantly issued said the card issuance process improved their impression of the institution, compared with 44 percent of respondents who received their card in the mail who said the same thing.
Statistics like this highlight the fact that offering instant issuance as a service does more for a credit union that impact its bottom line; it's also a way to increase consumer satisfaction.
"While financial institutions traditionally focus on the monetary benefit of instant issuance, our research shows it can also empower them to address growing customer demand for immediate service – from opening a new account to replacing lost or stolen cards," Nick Holland, an analyst for Javelin Strategy and the study's lead author.
"Notably, smaller institutions, such as community banks and credit unions, are leading adoption of instant issuance to gain a competitive advantage over their larger peers," he continued.