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More Consumers Read #Email on the Move

Written by from the Marketing Department · April 18, 2014
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When formulating an email marketing strategy, keep this in mind: Desktops and laptops are taking a backseat to mobile devices as consumers’ preferred method for checking email.

In fact, according to email marketing firm Movable Ink’s U.S. Consumer Device Preference Report: Q4 2013 only 35 percent of emails were opened on desktop PCs, down from 39 percent in just the previous quarter. Smartphones accounted for 48 percent of email opens and tablets accounted for 17 percent. For marketing emails, the number opened on a smartphone is even higher. Nearly 65 percent of marketing emails were opened on a mobile device in the fourth quarter 2013. That’s up from 61 percent in the previous quarter.

“This report…shows that we are in the midst of a mobile takeover,” writes Vivek Sharma, co-founder and CEO of Movable Ink. She added, “We expect marketers to continue to place high priority on mobile optimization, which will allow them to better engage consumers who are on-the-go with relevant, real-time offers.”

These statistics drive home the importance for financial institution marketers to consider the mobile channel when reaching out to consumers. This means more than simply optimizing the message for a smaller screen; it requires thinking holistically about when, why and how the consumer will interact with your communication and what call-to-action can realistically be expected from on-the-go consumers.

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Podcast: #MobilePayment Developments FIs Shouldn’t Ignore

Written by from the Mobile Department · April 16, 2014
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iStock_000011372514Small (2)On a recent TMG Podcast, I had the opportunity to share some insights into mobile payments. Specifically, the podcast focused on recent developments in mobile payments and what consumers are looking for from their financial institutions (FIs) in the mobile payments arena.

In the episode, I chatted with TMG’s Marketing VP Georgann Smith about the potential impact of the changing payments landscape and how FIs can make the most informed decisions about their payments strategy moving forward.

I walked through the three main categories of mobile payment technology, pointed out the major players working their way into this developing payment space and advised FIs on how to develop effective strategies for successfully competing in the world of mobile payments. Georgann and I also discussed some behind-the-scenes technology within the mobile payments space to which FIs should pay particularly close attention, especially host card emulation (or HCE).

If you’d like to receive updates on future podcasts, follow our channel at

To listen to any of the number of podcast episodes we have available on-demand, visit

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@TMG Clients Prepare for #EMV Conversion

Written by from the EMV Department · April 14, 2014
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Recent high-profile data breaches have brought about speculation that some card issuers may be working to speed up their EMV conversion plans. Merchants, too, are ramping up their efforts, with Target leading the charge to fast track EMV rollout in the U.S.

The Members Group (TMG) recently surveyed 43 of our financial institution (FI) clients about their EMV rollout plans. Twenty-four of the FIs participating in the survey reported they would like to start an EMV project within the next 12 months. Eleven of the FIs named 2015 as their preferred start time, while eight said they were unsure when they would like to begin an EMV project.

Additionally, 27 of the surveyed FIs said they have a reissuance plan. Of those, 22 reported they will send out EMV cards on the natural reissue date. The remaining five issuers said they would reissue cards upon request on a per-cardholder basis.

Regarding authentication, the majority of those surveyed indicated they plan to implement chip and signature, which TMG considers the best practice for community-FI card issuers.

Only six issuers surveyed plan to issue dual-interface cards, which would allow EMV cardholders to use tap-and-go terminals. Although these terminals are widely used in Europe, in the U.S., they are generally found only in major metropolitan areas.

A dual-interface configuration is considered the Cadillac among EMV cards and will demonstrate a credit union or bank is ahead of the market. However, it may require as much as double the budget to issue dual-interface EMV cards as compared to contact-only.

None of the FIs surveyed reported plans to issue EMV cards that authenticate in offline environments. Whereas European EMV cards typically allow for both online and offline transactions and authorizations, stateside cards will benefit from an abundance of connectivity and a healthy telecommunications infrastructure. This means fewer terminals in the U.S. are without the ability to communicate with the necessary authenticating parties.

For issuers without a significant number of international travelers, online-only EMV cards will be sufficient. It’s also important to understand that offline EMV cards require a significant amount of upkeep.

EMV conversion is well underway with many of TMG’s clients. If you are an issuer looking to partner with an experienced and efficient vendor, certainly get in touch and we will discuss your plan of attack and get you placed in the queue for conversion as soon as possible.

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Analyzing #BigData to Fight #Fraud

Written by from the Data Analytics Department · April 11, 2014
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Data analytics is dramatically changing fraud detection with advanced analytic solutions that are powerful and fast enough to detect fraud in real time and proactively identify risks.

Fraud is an adaptive crime, and many sophisticated criminals are armed with the latest in accessible, affordable technology and malware. That means financial institutions (FIs) need to stay a step ahead. Big Data is evolving in ways that may help FIs do exactly that.

As organizations and employees increasingly operate in mobile, web and social-media environments, taking advantage of information identified via analytics can provide FIs an important fraud-detection edge. In fact, industry experts predict that Big Data will continue to play an ever-increasing role in the way FIs fight fraud.

Of course, one of the first steps to using Big Data is to understand data analytics. After all, data alone cannot fight fraud. FIs must learn to effectively decipher and gain insight from the data before expecting it to make a difference.

“Institutions need to start by asking more questions about the data they currently have, not the data they want,” advised Anton Chuvakin, security expert and Gartner analyst, in a recent BankInfoSecurity article. He added, “Let’s go into our data and see what is up, then create new analytic approaches to detect and investigate it.”

Some FIs are currently using such analytics to anticipate fraud attacks by monitoring current trends directed at the financial services industry. Additionally, FIs are working to scrutinize data amidst various banking platforms, instead of watching each in a segregated environment.

Gartner’s Chuvakin suggests FIs alter how they view Big Data. Rather than using it to prove an anticipated outcome, he advises FIs to acknowledge the whole snapshot Big Data presents, even though it may not always be what they had expected.

Being flexible and adaptive are two keys to FIs successfully leveraging data analytics to fight fraud. Further, FIs must continually look for new ways to decode and put into practical use the information they garner through big data.

Big Data, if analyzed systematically, may hold the key to preventing fraud without affecting the overall consumer experience.

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Fraudsters Kick Off Counterfeiting Operation with $1,800 Investment in Malware #BlackPOS

Written by from the Fraud Department · April 9, 2014
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iStock_000037358316Small (2)In an earlier post, I talked about 2014 being coined “The Year of the Data Breach,” and so far, the ring is true. Much of the continuing breach trouble appears to be stemming from a certain malware used in the Target incident. This malware has reportedly created a new wave of data breaches, and investigators have tracked it back to as far as June 2013.

Chatter among industry professionals and the payments media has it that more retailers were breached in a similar method to the Target incident and around the same timeframe. While merchant names have not been released, investigators have revealed that the malware used in the Target breach has been downloaded at least 20 times in various locations around the world.

Criminals who have downloaded the malware have reportedly done so for a fee of $1,800 for the basic version and $2,300 for the full version. Per the FBI: “The accessibility of the malware on underground forums, the affordability of the software and the huge potential profits to be made from retail POS systems in the United States make this type of financially motivated cyber crime attractive to a wide range of actors.”

BlackPOS works by getting itself downloaded into the retailer’s system (how insiders may have intentionally played a role or been tricked into that download is to be determined). It then captures card information and uploads it to a server that the fraudsters can access. From this data, fraudsters build out counterfeit magstripes and plastics. (Counterfeiters are actually in a race against time, as the proliferation of EMV is expected put a near stop to the production of look-alike cards. This may explain the ramped-up breach effort – striking before it’s too late.)

If you’re interested in learning more about the software, and its other moniker, Kaptoxa, there is a lot of information out there. A good place to get started is TripWire.

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Use of #Mobile for Advanced Banking Services on the Rise

Written by from the Sales Department · April 7, 2014
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U.S. consumers are using their mobile devices more often to fill out financial institution (FI) online account applications, according to a new report from Andera and Celent.

The report concluded that 24 percent of online bank account applications were completed with smartphones or tablets. That amounts to a 50-percent increase from last year, said Charlie Kroll, Andera’s CEO. He added, “When you consider that, according to Javelin Strategy & Research, tens of millions of Americans applied for checking and savings accounts online in 2013, 24 percent represents an enormous shift in consumer behavior in a short period of time.”

As Andera’s SVP of Product Management Ying Chen pointed out, entering data on smartphones and tablets can be inconvenient for consumers. To that end, Chen advises FIs leverage cameras and touchscreen abilities to maximize the potential of mobile devices in account opening.

While other consumer banking transactions, such as check deposits, are already shifting rapidly to the mobile channel, these statistics indicate account applications could soon follow suit. As consumers increasingly look to mobile to initiate relationships with FIs, it’s more important than ever for FIs to make a good first impression via the mobile channel. Now’s the time for FIs to offer a streamlined, convenient and user-friendly mobile account-opening process.

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Consumer Familiarity Makes Chip and Signature Clear #EMV Winner

Written by from the EMV Department · April 4, 2014
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With so many players involved in the EMV rollout process, it’s not surprising there are varying opinions and some uncertainty about what EMV will look like as it comes to fruition in the U.S. market.

One thing most in the industry agree on is that chip alone will not be enough to stop fraud. There are a number of different authentication factors being discussed to go along with the chip. The two most commonly considered options are PIN and signature.

Chip and PIN technology requires the EMV cardholder to enter a four-digit PIN at the point of sale (POS). Chip and signature (the authentication method most in line with what credit cardholders are used to today) allows consumers to use their signatures for authentication at the POS. Another option recently entering the picture is chip and fingerprint. With chip and fingerprint, the cardholder swipes his or her finger across a sensor on the card’s surface. The card’s internal computer processor performs a match with the person’s pre-stored fingerprint.

A recent survey by The Members Group (TMG) found the majority of both Visa- and MasterCard-issuing clients plan to issue contact-only, signature-based EMV cards that authorize only in an online environment.

As opposed to PIN-based EMV cards, signature cards are what TMG considers a best practice for community financial institution credit card issuers, mainly due to credit cardholder familiarity with signature.

Consumers are not used to entering a PIN when swiping their credit cards. PIN also adds an additional layer of complexity for the issuer. When it comes to EMV issuance, TMG advises clients to start simple and add complexity in the future if necessary. The availability of PIN as an authenticator can always be added at a later date.

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Can Social Media Help FIs Prevent #Fraud?

Written by from the Fraud Department · March 31, 2014
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What if your mobile banking app had the power to talk to your customers’ social media accounts? Imagine the things it could learn – a customer’s location, for example. By syncing banking and social apps, fraud analysts may have a better idea when fraudsters are at work.

Take Facebook’s geo-location data, for example. By using this data to understand where a user is at any given moment, a banking app would be in a good position to make an educated guess on the validity of the that user’s transactions.

At least one fraud-prevention provider is hoping social media fraud analysis will catch on in the U.S. Feedzai, a European antifraud technology company, is going out with a product it says “uses machine-based learning in real time to fight fraud in the e-commerce, mobile and physical sales channels.”

What do you think about this type of avenue for fraud prevention? Maybe the more pertinent question is what consumers would think. How willing would they be to link their Facebook, Twitter, Pinterest or Instagram accounts with your mobile banking app?

Today, savvy consumers notify their financial institutions when and where they are planning to travel to avoid any issues with their payment transactions while away. A syncing of social tools could eliminate this step and also improve accuracy (after all, travel plans have a way of changing quickly). I can see where a concern for privacy may stand in the way for some; but for others – particularly those from a generation comfortable with sharing the most intimate details of their lives – it may be a welcome innovation.

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Is Your #DataBreach Plan in Place and Up to Date?

Written by from the Fraud Department · March 28, 2014
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Is your financial institution (FI) prepared for the next breach? It’s no longer a question of “if” a breach will occur; it’s a question of “when.”

Just the other day, a colleague shared with me that one of TMG’s fraud analysts had dubbed 2014 “The Year of the Data Breach.” I know many others in the payments industry agree with the prediction. In fact, I recently came across an interview with Experian’s Vice President of Data Breach Resolution Mike Bruemmer in which he suggests the increased number of breach incidents may even lead to what he calls “breach fatigue.”

The Year of the Data Breach started off strong with Target, Neiman Marcus, Michael’s and Sally Beauty all reporting data compromises impacting millions of cardholder credit and debit cards. Since those incidents, there have been whispers that more retail merchants have been breached, as well, though no others have gone public yet. I don’t see the momentum letting up throughout the year, as fraudsters are known to take advantage of tools and strategies that have proven effective.

The most important thing card issuers can do to brace themselves for the tough months ahead is to create a strategic action plan and get corresponding procedures firmly into place. Like Bruemmer told BankInfoSecurity, “Organizations really have fewer excuses why they shouldn’t be prepared. It’s much more cost-effective to prepare, to pay the price and invest up front, versus paying later.”

I agree completely, and also believe there has to be a risk-tolerance evaluation before an FI gets that plan in place. An FI must get educated on its risk position by analyzing recent fraud trends (your processor should be able to help!) and then settling on its level of risk tolerance. For example, it may be most cost-effective for a credit union with a small card base to perform a mass reissue in the wake of a data breach. A larger FI with more resources, on the other hand, may choose to reissue only those impacted cards and invest in sophisticated fraud prevention strategies that will stop future fraudsters from achieving high rates of counterfeiting success.

Regardless of the particulars of the action plan or the level of risk tolerance, FIs must work now to get a strategy in place. For those credit unions and community banks that already have such a plan, test it, retrain staff and introduce new employees to the plan so all hands are properly on deck when the next breach inevitably hits.

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How #Prepaid Competitors are (or Will Soon Be) Distributing Their Cards

Written by from the Prepaid Department · March 26, 2014
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ArrowsA new report from Mercator Advisory Group says a solid distribution strategy is one of the most critical requirements of a prepaid program’s success. The report, Prepaid Distribution Strategies in the United States, looks at options prepaid card program managers should consider as they research new ways to promote and deliver their prepaid product to consumers.

The report points to methods prepaid card issuers can employ to broaden their scope of influence, such as scouting new venues and taking advantage of emerging tools and technological advances. Specifically, the study encourages the creation of distribution plans that combine aspects of both business (channel choice, partners, cost of delivery, regulatory compliance, competition and brand awareness) and technology (new form factors for delivery, activation and redemption).

The study also advises prepaid issuers to take into account the present condition of the digital card market and determine ways to secure an advantage over the competition.

Additionally, the report examines the amount of money loaded onto prepaid cards in business-to-business as well as direct-to-consumer channels. Movements prepaid issuers should make with respect to mobile wallets are also taken into consideration.

This study reminds us of the importance of a sound sales and marketing strategy for prepaid program success. Understanding best practices for boosting distribution, marrying business and technology and sharpening your competitive edge are all key to the success of any prepaid program.

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