LEVERAGE Monthly Newsletter

Credit Union Audit & Compliance Group (CUACG) was recently ranked #6 nationally among all credit union auditing firms, according to Callahan & Associates, Inc. This national recognition is a testament to CUACG’s excellence and commitment to the credit union industry.

In addition to this national achievement, CUACG was also ranked as the #1 largest credit union auditing firm for credit unions with $40 - 100 million in assets. This regional leadership further solidifies CUACG as the premier choice for audit and compliance services in the Southeast.

As the largest credit union audit and compliance firm in the Southeast, CUACG serves over 200 credit unions across Alabama, Florida, Georgia, Mississippi, and Tennessee. With a team of industry experts, CUACG helps credit unions navigate an ever-evolving regulatory and compliance landscape, ensuring they remain compliant and successful.

CUACG’s success is driven by its commitment to delivering high-quality audit and compliance services tailored to the unique needs of credit unions. Their dedicated team of auditors ensures that each institution remains on the path to growth and regulatory compliance.

Contact Marcus King at marcus.king@cuacg.com or call 662-322-1038 for a free quote today. You can also reach out to your LEVERAGE Business Development Consultant at consult@myleverage.com or 855-9EXPERT (855-939-7378) for more information.

LEVERAGE is excited to announce the next installment of its Learning with LEVERAGE webinar series, a complimentary educational platform designed to keep credit unions informed and prepared for the most critical topics in the financial services industry. These webinars cover a range of essential topics, including technology, operations, risk management, employee relations, and more.

Mark your calendars for September 24, at 11:00 a.m. ET, when LEVERAGE will focus on one of the most pressing issues for credit unions: Cybersecurity - Current Threats, Most Recent NCUA Exam Findings, and Regulatory Compliance.

In this webinar, Jim Soenksen, CEO of PIVOT Group, and Thomas Lux, Regional Information Systems Officer at NCUA, will guide you through the latest cybersecurity threats, NCUA exam findings, and the regulatory compliance landscape that credit unions need to be aware of.

Make sure to join LEVERAGE every second and fourth Tuesday of the month for more insights on trending topics in financial services, from expense reduction and member relations to liquidity and lending.

For more information, contact consult@myleverage.com. For a look at our past webinars, click here.

Register Today!

In today’s financial landscape, credit unions face an ever-growing need to implement proactive fraud prevention measures. Shared Cooperative Services participants can safeguard their operations by utilizing key fraud resources and following best practices to mitigate risks.

One critical step is registering for CO-OP Shared Branch fraud alerts, a valuable tool that provides timely, confirmed fraud information reported by participating credit unions. You can register for fraud alerts here to stay informed and respond swiftly.

COOPER Fraud Analyzer Reports are another essential resource. These reports provide real-time fraud insights, allowing credit unions to take quick action. It is vital to review COOPER Fraud Analyzer Reports immediately upon receipt and ensure the designated fraud contacts respond to any fraud activity within the same day.

For additional information or assistance, contact CO-OP Fraud Prevention and Risk Team at accountfrauddetection@coop.org or call 888-821-6323.

Key Best Practices for Issuing and Acquiring Credit Unions:

• • Identify a dedicated fraud mitigation team within the credit union to manage CO-OP Shared Branch fraud alerts, review reports, and communicate any incidents to the CO-OP Fraud Prevention & Risk team.
• • Respond to fraud investigation requests within five business days to facilitate swift resolutions.
• • Regularly verify and adjust your credit union’s risk tolerance settings in the COOPER Fraud Analyzer.
• • Establish and enforce cash withdrawal limits to mitigate exposure to fraud. Special attention should be given to high-balance accounts or accounts with little shared branching activity.
• • Credit unions should avoid using the Reverse Look-up option, as it is no longer valid for shared branching transactions and can result in liability for fraud.
• • Use additional security measures when handling out-of-state IDs or large cash withdrawals, such as black-lighting IDs and consulting the ID Checking Guide.

By adopting these best practices and leveraging CO-OP’s fraud prevention tools, credit unions can significantly reduce their exposure to fraud and ensure the protection of their members.

For additional support or to update contact information, please reach out to Laura Vann or Laura Heard at Shared Cooperative Services. Visit www.sharedcooperativeservices.com for further details on resources and support.

Our benefits consulting, administration, and compliance agency was built around changing the benefit experience which is typically: expensive, frustrating, and complex. Recently, some would add…unsustainable. LEVERAGE Benefits Group intentionally remains laser focused on every aspect of the employee benefits landscape for credit unions, which includes ensuring all benefit options are evaluated for each credit union or CUSO. It’s easy to stick with what you’re used to, but with LBG there is also expertise in a variety of ways to offer robust and flexible plans, using national networks that save credit unions and CUSOs significant amounts of money. This creates discussions around renewals where “no employee contribution increases” and “better benefits” can exist.

We also know your staff is strained. They are wearing multiple hats and with more compliance requirements and regulation that gets added each year, they need help. They need the day-to-day time constraints of administration lifted to allow them to focus on culture, strategy, and the overall wellbeing of your employee’s experience. Our mission is simple, to not only be an extension of your Human Resources department but to inspire, deliver, and amaze. That starts with making life easier.

Compliance Oversight Programs for Employers (COPE)
Keeping up with the ever-changing mandates of healthcare compliance can be challenging. Understanding the complexities of the Health Insurance Portability and Accountability Act (HIPAA), Consolidated Omnibus Budget Reconciliation Act (COBRA), and Employee Retirement Income Security Act of 1974 (ERISA) laws is no small feat, and specific mandates can cost you monetary penalties if you do not comply.

LEVERAGE Benefits Group can make compliance as easy as 1-2-3 with our COPE Solution. We’ve done all the work, navigated the changes, and will provide ongoing support to keep you and your company on track and compliant. This includes creating and filing required reporting on your behalf, mandated notice communication, and more.

Online Benefit Administration
Our in-house team builds, customizes, and maintains a state-of-the-art benefit administration platform that can integrate with various payroll systems. As your broker, we know your plans inside and out and can create a paperless online enrollment system that includes every detail of your plan setup. Waiting periods, termination rules, disability benefit maximums, salary changes, and more are all automated within the system so you can focus on your business.

Consolidated Invoicing
Since we manage your enrollment administration, we are best equipped to audit each carrier bill and create one detailed consolidated invoice. You pay one premium—once a month for all the benefits offered.

At LEVERAGE Benefits Group, we’re here to improve your benefit offering while improving the bottom line, simplify your processes, reduce costs, and provide the best white glove, personal service to you and your employees. Due to the various methods of cost savings, we make offering employee benefits sustainable and easy—that is our promise.

By: Sam Das, Managing Director, TruStage Ventures

Credit unions, like people, have varying strengths in different kinds of intelligences. Traditionally, the credit union creed of people helping people gave the industry strong roots in Emotional Intelligence (EI). With modern applications of Artificial Intelligence (AI) strengthening service and efficiency, there is a lot to be gained. Both categories of ‘intelligence’ have distinct differentiators. AI is the capability of computers to do activities that previously needed human-level intelligence. EI, on the other hand, is the ability to empathize between two parties.

A common misunderstanding is that AI-powered systems can handle the emotional challenges of member relationships; however, finances are very personal. Systems can be trained to show sensitivity to some extent, but they can’t feel and think the way humans do. AI cannot replace authentic emotional connections that enrich human interactions - the type of experience that has differentiated credit unions from competitors for decades.

AI presents a big opportunity for credit unions but shouldn’t replace EI. It’s the strategic combination of AI and EI that can lead to greater efficiency gains and better member service.

Developing a Strategy Around AI
A credit union should have a plan before using AI. Start with assembling a diverse team of subject matter experts (SMEs), business champions, IT professionals and compliance officers. SMEs, for example, are tasked with staying on top of current trends in technology and knowing what will be required of the IT and compliance teams to integrate these solutions. They’re also aware of how this technology impacts the financial regulatory landscape. Whereas, business champions are crafting the business case, as well as mapping the member and financial impact AI will have on the credit union.

This strategy team is responsible for integrating AI into operations and company culture, ensuring it aligns with regulatory standards and the organization’s mission.

Exploring Potential Use Cases
As with most new technologies, it’s easiest to begin by addressing a few use cases. AI has the potential to increase efficiencies, enhance member experiences, and optimize a credit union’s existing talent and resources. Once credit unions see success with these use cases, there will be an appetite for more.

Connecting with a fintech is an easy way to start. Take Posh AI for example, a leader in conversational and generative AI solutions for the financial industry. Where many credit unions struggle between limited hours for contact centers or expensive after-hours support, digital assistants and virtual assistants can provide members with around the clock service at a fraction of the cost. Posh’s digital assistant can handle questions related to the branch, products and services, and member account information. As a result, the credit union improves member satisfaction and gains efficiency.

Another use case is AI-powered knowledge management solutions. These solutions learn from a credit union’s policies and procedures to create a database of commonly asked questions and answers. Rather than manually searching or messaging peers, staff receive instant responses within seconds through Posh’s conversational interface. In this scenario, employees are empowered to be of better service, which enhances member experience and efficiency gains.

AI Education
After deciding on the strategy and initial use cases, the AI team should educate their employees and begin to develop a culture that acknowledges how the organization will benefit from AI. This requires support from leadership.

It’s also important to educate the board and senior leadership on how AI can transform the organization. This is an opportunity to address any misinformation and differing opinions. A concise approach, and support from the credit union management team will go a long way. In fact, it’s likely that many board members are waiting for an approach to AI, or at least be excited by it.

Risks of AI
There is risk involved in credit unions choosing whether to use AI solutions. It’s up to the credit union to determine if the risks outweigh the benefits.

A lack of education or alignment on use cases will prove to be harmful. Prioritizing education enterprise-wide will help credit unions avoid misaligned expectations of the technology and what it will achieve. For example, open-AI models like ChatGPT aren’t ready to support credit unions in solving member inquiries, they use outside information. However, their models can be constructed with guardrails to understand member behavior through transactions and money movements. Part of a credit union’s AI strategy should address risk and guardrails.

Avoiding AI due to these risks may make credit unions vulnerable to changing environments. Take the fraud landscape, cybersecurity threats are becoming increasingly sophisticated. From credential stuffing to phishing threats, fraudsters are using AI. If credit unions don’t deploy tools of similar strength to safeguard their organization, they will find themselves at a disadvantage. AI is not only a strategic advantage but a necessity for the future.

Finding the Right Fit
Credit unions are under constant demand to be more efficient and scale while keeping their competitive differentiators. Leveraging AI can help in this battle by supercharging interactions, experiences and tasks. It can automate mundane and routine tasks, allowing staff to focus on more complex and sensitive financial situations. Humans excel at problem-solving, building relationships and demonstrating empathy, they are the best source of EI. AI tools can enable employees to concentrate on strategy, member experience and delivering the personal touches that credit unions are built upon.

Interactions likely to elicit emotional responses from members, like dealing with financial stress or making a critical financial decision, should be handled personally. This is where the concept of "human in the loop" becomes essential. With the right guidelines, AI systems operate up until a basic level of service is met, then facilitate a seamless transfer to an employee. This scenario works for customer service, fraud mitigation, loan approvals, and countless other processes. In each case, employees are able to contribute in ways that maximize their value and output.

The core mission of credit unions remains centered on human interactions and EI, but the industry needs advanced technologies like AI to manage the demands of a 24/7 culture, increasing cybersecurity demands, compliance, and much more. By leveraging AI to handle routine tasks and preserving EI for personalized service, credit unions can boost operational efficiencies while ensuring that members feel valued and supported. Such a dynamic balance presents credit unions with the opportunity to revolutionize the member experience and stay competitive in today’s marketplace.

To learn more about how AI and Emotional Intelligence can transform your credit union operations, listen to the full podcast episode on ACU’s The CU Lab featuring Sam Das, Managing Director of TruStage Ventures, and CEO of Posh AI, Karan Kashyap.