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RMV services coming back online Monday - Duration: 1:09.
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Pathway to Offering E-Services (3/22/2017) - Duration: 1:28:11.
Kathryn Baxter: Good afternoon, everyone. Welcome to our March Webinar, Pathways to Offering E-Services. We think you're going to love this webinar today. My name is Kathryn Baxter. I am your moderator, of course, for today's webinar.
I'm joined by my partner in crime, Mr. Dominic Carullo. Before I turn the console over to Dominic, let's go to our administrative announcements so that we can get you ready. So please adjust the volume on your computer as loud as you need it so that you can hear this webinar.
If you'd like to resize the slides, please drag the bottom corner of the slide to do that. From this website, you will need to allow pop-ups. We have an Ask a Question feature on the left-hand side of your console. What we'd like you to do is to ask questions to our speakers throughout the
webinar. So you'll see - you'll listen to their names when Dominic announces the speaker. So please address that speaker in your question. Before we go into our Q&A, I'm going to push out a very brief survey. Please fill it out. We do need to have your comments. We'd like to know what you thought
of this webinar and any future suggestions that you have for us. And, of course, as always, in approximately three weeks, this webinar will be close-captioned for on-demand viewing. As I mentioned, this is a very interesting webinar that we're offering on E-Services. We have a dynamic duo here from
CU24 and they're joined by our dynamic guide, Dominic Carullo. Dominic has something he loves to say to credit union. What's that Dom? Dominic Carullo: You know it, Kathryn, I do. And I absolutely love credit unions. Credit unions are my passion. I've been working with credit unions for 30 years
now - Kathryn Baxter: And counting. Dominic Carullo: And they are the best thing going. Kathryn Baxter: All right. Dominic Carullo: And all you volunteers out there, thank you so much for your service. Kathryn Baxter: There you go. Dominic Carullo: Okay, everyone, my name is Dominic Carullo and I am host for today's webinar. Now, as Kathryn said, we do, we have a terrific webinar for you today with two
awesome guest speakers. Now, as always, we very much want to keep involved with our webinar and keep it as interactive as possible. Now, with that, please make sure to answer all our poll questions, and we have five of them today. In addition, make sure you type in your questions for our
speakers throughout the webinar, and I know you're going to have a lot of questions and these guys are going to answer them very, very well for you today, very frankly. And to make sure the proper person addresses your question, when you ask a question, please let us know whether you want James or Joe to answer it and I will make sure we get that question to them
and in some cases they both will answer your question. And so utilize the question function on your screen when submitting your question. That's pretty easy. It's just like sending a text. Now, here is our disclaimer. This webinar is offered for informational and educational purposes
only. NCUA does not endorse any particular credit union or vendor or their employees, products or services. Now, here's what you're going to hear today. We're going to talk about your credit union's E-Path, we're going to talk about the E-Services environment, which is the electronic
services environment, we're going to discuss debit cards, ATM, ATM and point of sale income and expenses, we're going to discuss credit cards and mobile options. And I know you folks out there are going to have a lot of questions. We're going to go through and tell you a little bit about each one of these.
If you have any additional questions, by all means, type them in and we'll try to get to as many questions as we can with the webinar. If we don't get to all of them, we will be sending out the answers. I personally will send an email out to each and every one of you with all the answers to all the questions.
As with our other webinars, you may qualify for a certificate of completion with this webinar. Now, to qualify for the certificate of completion, you must be online for 45 minutes, you need to answer the five poll questions and correctly
answer 12 of the 15 quiz questions after the webinar. Now, for your convenience and to allow for you to listen to the full webinar, we're going to leave the console open for one full hour after the webinar to allow you sufficient time to answer the quiz.
Now, it's time for me introduce our speakers. I'd like to introduce first of all James Gukeisen, who is the Product Coordinator and Assistant Director Prepaid Business Development with CU24. Welcome, James. James Gukeisen: Hey. Good afternoon, Dominic. It's great to be here. Dominic Carullo: Great to have you. Next,
we have Joe Woods, who is the Vice President of Sales and Relationship Management with CU24. Welcome, Joe. Joe Woods: Dominic, I appreciate it. It's great to be here. Dominic Carullo: Glad to have you. Okay. What are E-Services? I just figured we would break this down in simplistic
terms. E-Services are the use of electronic technology by an organization to provide services to it's members, and simple as that. Okay. Remember what we talked about earlier about making this interactive. Here's our first poll
question, and I'd like all of you out there in our audience to answer this poll, what is your credit union's asset size? If you're less than 10 million, please click on the first circle, and so on and so forth. Now, if you're out there in the audience and you are not with a particular credit union, just kindly click on the N/A function.
And while I'm waiting for the answer, Kathryn, how are we doing with those - with the questions? Are we starting to get them in? Kathryn Baxter: You know we are. In fact, we just got one in. A credit union wants to know if we're going to have a discussion of digital branch services and its impact on E-Services
environment. Dominic Carullo: What do you think guys? Are we going to discuss that? James Gukeisen: Yeah. It depends on the path that they want to take. If they want to talk about a fully integrated teller-less environment where you have the full service kiosk that allow for cash recycling, deposit acceptance and interactive teller machines or interactive
video machines that allow for loan acceptance. We can have that discussion if we go over three to four hours. Dominic Carullo: Well, perhaps if you could formulate that into a question, we will go ahead and we will address that at the end of the - at the beginning of the Q&A. Kathryn Baxter: Sounds good, yeah. Dominic Carullo: And here is the breakdown of the asset size out there.
It looks like the majority of the folks out there are with credit unions between 10 and 50 million. We have a good percentage, about 17% less than 10. Between 50 and 100, we have about 17%. And there, we have some large credit unions, larger credit unions, at over 100 million, we have about
8.6%. And we have some very large ones over there, over 250 million. So we have pretty good spread. And as expected, most of the credit unions in the audience are the smaller size credit unions. Okay. Let's get started. Take it away, James
and Joe. But before you go guys, before you get started, just tell us a little bit more about yourselves. James Gukeisen: All right. Thank you, Dominic. Well, my name is James Gukeisen and I'm the Assistant Director of Prepaid Business Development for CU24. I've been in the credit union industry almost 17 years now. I started at Suncoast
School's Credit Union down in Tampa. I worked there for 11 years, basically all things operations, from debit cards, ATMs, vendor management, so on and so forth. And then about - almost six years ago, I moved over to CU24, took care of relationship management and a couple of different areas there.
Joe? Joe Woods: Thanks, James. I'm Joe Woods with CU24. I am their Vice President of Sales and Relationship Management. I've been with the credit union movement for 16 years now. I got my start with Liberty Enterprises back in the day, for those of you who remember Liberty check printers, and then spent some time with Corporate One Federal Credit
Union, the corporate in Ohio, as well as starting up Legacy Member Services, a small credit union check provider, and now have been with CU24 for just over three years. So with that, let's get into the agenda. I'll walk you through everything. Keep in mind that we are
providing a very general path today to starting and growing your EFT programs. We begin by making some very general statements and perhaps even restating some questions you may have already asked internally. We don't make assumptions and we'll avoid using jargon, acronyms and we'll explain some of the acronyms to you so that the presentation is helpful –
as helpful as possible. With that in mind, EFT stands for electronic funds transfer. And that term, EFT, is often in a generic manner pertaining to many things related to debit cards and automated teller machines or ATMs, another acronym. Certainly, each
of your situations is very unique and you're at different points in the development process. In a whole, this program will speak about today's competitive environment in a logical progression as we see it. As your credit union addresses an ever changing and hyper competitive marketplace, it may be tempting to try to accomplish
all of these programs, all of your EFT goals, simultaneously or in very quick succession. If you have the staff and limitless funding, go for it. But if not, we recommend a somewhat specific course of action that is mindful of your member's demands while allowing for your team to maintain all of your vendor management protocols,
any new compliance requirements as you strive to meet your credit union's growth goals. While we start with the snapshot of the current EFT environment, please keep these questions about your team and your potential partners in mind, do we already have some expertise or experience on staff that we can leverage? How much will I need to staff up?
And if so, when do I need to add that staff? How much of the back office can I outsource at the start if I don't have the appropriate staff to handle this? And when considering potential partners, remember that you and your members always have options, that the OSCUl here could likely provide some best practice, recommendations on contract terms
and other items related to these types of services. And please be mindful of bundled services that come with incentives. That shiny penny, that large check at the front end of the deal will usually cost you more than a dime in the long run so you have to be careful. So - and with that, Dominic, I think we're sending it back to you for
poll questions. Dominic Carullo: All right. Here we go. Thanks, Joe. Okay. Which statement best describes your credit union? We currently offer E-Services. We currently offer E-Services and want to expand. How about we do not offer E-Services but we are interested. And then
the last one is we believe we are too small to offer E-Services. And then finally, the last option is N/A if this doesn't apply to you. And with that, we'll give you a moment to answer that question. Kathryn Baxter: Dom, we had one credit union that was interested
in whether we're going to talk about how to prevent fraud in our E-Services. Are we going to broach that at all today? Dominic Carullo: Well, we're not going to be addressing that specifically today. Kathryn Baxter: Okay. Dominic Carullo: Possibly in one of our follow-up webinars. Kathryn Baxter: Sounds good. Dominic Carullo: Okay. And with that, let's take
a look at our answers here. It looks like about 27% out there already offer E-Services. But more importantly and very important for today, about close to 50% of you out there want to expand them, which makes a lot of sense.
We have about 8.9% or 9% that don't offer E-Services but they're interested and a small percentage of folks out there, 3.4% believe that they're too small. So we may be able to discuss some options that might be available for the very, very small credit unions out there.
And with that, I'm going to turn this back over to James. James Gukeisen: All right. Thank you, Dominic, and great numbers. We can certainly discuss many options available to credit unions. Okay. And with that, how do we start to understand our environment and how do we navigate debit card programs, ATM management solutions and credit card programs
as well while developing a solution that generates income and minimizes the associated expenses? Well, first, we understand that, as credit unions, we have options, plenty of options. As you can see on the slide, while the field of organizations that
offer EFT services as not as robust as it once was, they all are to borrow a phrase, plenty of fish in the sea. Now, as small credit unions, you may not be visited by or have a direct relationship with some of the organizations listed. And they
often resell their services through service corporations, state leagues or regional affiliations. So your particular state league or association may be the phase of one of the processors shown here. Note that the lines leading to and from the different
to the other. The dividing line is often at the level of service, the pricing or both. As we look
at the poll results, certainly at least 85% of the respondents have significant interest in starting up or expanding their services, and that's spectacular. It will certainly help to keep you competitive. If you're just starting out or if you're looking to expand, you may one to
consider a debit card to start or expand your EFT program. A debit card accesses a member-shared draft or checking account and your credit union becomes an issuer. Purchases and ATM transactions made by your members are initiated by that
debit card and are routed to be on network by your processor between your credit union and the various merchants. The industry refers to the merchants, both stores and ATMs, as acquirers. So your member is card holder, your credit union
is an issuer and any merchant is an acquirer. Now, for all practical purposes, your debit card will carry a Visa or a MasterCard logo, and in some cases, maybe a Discover logo. This is often referred to as the debit card's brand. Additionally, your debit card will
likely be tied to a couple of different PIN networks. One item that we will not cover in great detail but needs to be noted is the requirement to have a company to actually produce and melt out the pieces of plastics that are the debit cards. There are plenty of third party
providers for card production in addition to the fact that most processors or core solutions have reseller agreements with those same card production companies. Now, with a very high level of understanding of what a debit card is and how it functions, let's take a look at networks and processors
and get a better understanding of what they do for your credit union. Now, your debit card program is closely tied to the processor and networks you select. Each is interrelated and, just as important, interconnected. Before we really dive into functionality,
let's take a moment to better define interconnected. By that, we mean virtually every processor has a direct or indirect connection with most every other processor and that fact holds true for merchant connectivity. No organization wants to miss out on transactions,
be it from big box stores or ATMs. So no matter what processor and network mix you choose, your member's card will likely work just about everywhere. And I like to think of networks as rail cars and processors as the
railroad tracks. The rail car, our network, on the railroad tracks, the processor, moves transactions back and forth between your core and the merchant acquirers over and over again every single day. Now, within the process of passing the
financial transactions, your networks and processor are busy checking the structure and content of the transaction, routing it down the correct line and basically documenting the transaction. Now, your networks or processor may even stand in for you and approve
transactions if the connection to your core is momentarily down. And, of course, at the end of every day, your networks and processor, several of a day's activity, they'll send you a debit and make available to your credit union the reports you need to balance. Now, ancillary
to those functions, you can expect monthly and quarterly billing in other reports, the need to establish a dispute resolution procedure normally through your processor and staff training to assist members with debit-related questions. And with that, I'll pass it over to
Joe. Joe Woods: Thanks, James. So now, assuming that your credit union has debit cards in the hands of your members, your team may be thinking about adding an ATM or two, whether it's at the main branch, your home office or possibly credit union sponsor location. Adding an ATM is a –
excuse me. James Gukeisen: Bless you. Is a natural progression from the ATM. Due to time constraints, during the ATM discussion, we will not differentiate between a cash dispenser-only ATM
and a full service unit that accepts deposits. Know this, in general, there is a significant cost difference between the two types of units. With the full service unit more expense of the purchase and maintain. Luckily, just like selecting your networks and your processor,
your credit union will have plenty of options when selecting an ATM. Additionally, your credit union has the option of owning the ATM or the leasing terminals. Your decision will be influenced by many factors which we will explore in the subsequent slides. Now,
as we more through some of the factors, please keep in mind your team should have a lot of information coming back to you in the form of various reports including member and non-member activity. And that data may help you in the future decisions about when and where
to add those ATMs. So you can purchase or you can lease the ATM. There are major ATM deployers such as Diebold, NCR and Hyosung. And there are countless local and regional ATM management companies and resellers. Additionally,
your networks or your processor may offer ATM cells and manage services as well. Now, an important note here. Like the automobile industry, there are many models of ATMs that offer a wide array of functionality. From the economical, reliable types
without many bells and whistles, to cutting edge, interactive, full-service kiosk type units, something you may use in a digital branch, for example. As we explore some of the specifics, keep these two things in mind when dealing with vendors. Really explore and attempt to parse
out any type of bundled pricing and be very wary about any time sensitive offers. Again, just like the automobile industry, there are those that make the first deal so that you come back for the second and there are those that sell terminals that they're used cars. Now,
when you are buying or leasing an ATM, double check the addendum or the fine print of the agreement to ensure you are getting the whole unit and there are not hidden or buried fees or something like - for something like the branded topper that list your ATM name and logo and contact information.
Now, whatever path you choose, that ATM is going to need to communicate to the outside world. If you lease a terminal, the management company you signed will do all the terminal driving and keep the telecom services working. If you buy the unit, it is likely you will have your processor,
probably the same one that handles your debit card traffic, drive the terminal, and they will in turn guide you through the process and charge for the telecom services. Now, with that being said, I think we'll bounce it back to Dominic for the next poll question. Dominic Carullo: All right, James. Thank you. Does your credit union
offer debit card services? First circle for yes; the second circle for no, but we're interested; third circle, no because we believe we're too small. And finally, N/A if you're not a credit union. Kathryn, do we have a question we want to post? Kathryn Baxter: You know, we don't. So I want to encourage our audience to start
asking us some questions because that's why we're here. Dominic Carullo: That's why we're here. Kathryn Baxter: And we've got - Dominic Carullo: We will answer your questions. Kathryn Baxter: And we have the dynamic duo here and they're ready to answer some questions. Dominic Carullo: Okay. Let's see what the answers are to our polls here. All right, it looks like - oh, look at this, A, almost 81% of the credit unions out there already have debit cards. We have
about 5% out there that don't, but they're interested in getting into the debit cards. And we have about 3.6% that believe they're too small. And we have about 11% out there that aren't credit unions. So it looks like the vast majority are folks that already do offer debit cards. And back to you, James.
James Gukeisen: Thank you. Those are good numbers. Surely for the 10% that are looking to offer debit cards, great opportunity and relatively easy to get a program up and running. For the 80% that already have them, let's look at how dynamic you can make your debit card progress.
But with that being said, back to ATMs. The security and cash management for the ATM go hand in hand. There are a lot of variables to keep in mind. The first of which is if your ATM is going to be attached to your credit union, physically attached or at a remote location.
If it is an attached ATM, it is possible that your staff can handle the cash management and replenishment activity directly. If not, the same company that delivers cash to your branch may be able to do the same for your remote ATM. And note
here, lease options may sometimes include the cash services at a fixed or a variable cost and will most likely use your vault cash for the ATM replenishment. Now, your reconciliation process may be handled by your staff
or outsourced to one of the third party vendors that you will discover through your process. Besides the obvious need to reconcile the ATM cash in order to stay in balance and schedule replenishment services, any overdues or shortages are typically researched as part of the dispute
process. What this means is that your staff will likely have a workstation through your processor where you can receive and initiate adjustments for cash dispensing and deposit errors. Now that you have your ATMs in balance, remember that
every transaction, member and non-member alike is an opportunity to market your services. Being part of the credit union movement, we all know it isn't about selling as much as you can to all that you can. But do not allow these opportunities to pass without sharing some
of the good that you can do for that particular member. Stay on top of your on screen marketing messages. Do not let a car sale or a member meeting go by without a message showing on that ATM screen. And it almost goes without saying,
ensure your terminal and ADA and fee disclosure environment, and that those accommodations and disclosures are rugged and not easily manipulated. And lastly, if your credit union does decide to outsource, ensure that your team
has marketing access and compliance responsibilities are clearly defined in the agreement. And so with your debit card and ATMs set up, let's take a look at the income and expenses associated with those programs. I think we'll start with Joe on that. Joe Woods: Thanks, James, I'm
back. I think my kids call it a frog in their throat. But all right, so income and expense. For this section, everybody, please assume for the moment that your credit union does have a debit card program and at least one ATM. And as we know, already, just over 80% of you do have that debit card program in place. So now with the stage set,
let's jump right back into what bills you will pay and how you can even earn somebody in this program. James? James Gukeisen: All right. Thanks, Joe. Because you own your ATM and your members use their debit cards at ATMs that do not belong to you, your credit union is both an issuer and an acquirer.
That is pretty cool. Now, when your member uses those foreign ATMs, foreign meaning you do not own it, that transaction will cost you your credit union money. Your credit union will pay interchange to the terminal owner along with the switch fee of a few pennies to both the network
and the processor. Now, interchange and switch fees are new terms. And we will get a little deeper into both over the next couple of slides. After that, if any of the attendees would like a more detailed discussion of the interchange, please just ask and we could provide the details during the Q&A portion
of the webinar and I promise we can discuss interchange from 30 seconds to 3 hours, whatever makes the group happy. Now, when a non-member uses your ATM and the interchange is paid to you, you're still paying a switch fee to both the network and the
processor. If one of your members uses your ATM, no interchange is involved. That type of transaction is generally referred to as an On Us transaction and you will likely pay your processor, also known as your terminal driver, a fee for processing the
transaction. Now, one big difference between owning your ATM and leasing your ATM is that all transactions on a leased ATM are normally network transactions. So you will likely have an interchange expense which is often offset by other savings.
One of the other aspects of ATM transactions is the foreign terminal fee and terminal surcharge. The foreign terminal fee is normally a fee your credit union charges a member to cover the interchange expense. Now, this fee is often lower or waived
by a credit union if the transaction occurs at a surcharge-free location. A surcharge is the fee a terminal owner charges a non-member to conduct the transaction at their ATM and is income to the credit union if you happen to be that ATM's
owner. There are several surcharge-free reciprocal networks a credit union may choose to join to help them keep the cost down directly for their members. Now, point of sale or POS interchange is the income your credit union earns when your members make purchases to stores
using their credit either with a PIN number of by phone. Your credit union can expect both the network and processor to charge a switch fee as well. Now, there may be additional quarterly or other fees associated with the transactions. So make sure to check your fee schedules thoroughly and question your
vendor reps extensively. Joe? Joe Woods: Thanks, James. When we are discussing vendors, there are many covering your different programs. We may be speaking about the brand, say Visa or MasterCard for instance, the networks, the processor you choose, security companies that you're working
with that provide your courier services and even whomever you select to produce and mail out your plastic cards. So this list is definitely not exhaustive, rather just an example of the relationships that you will need to maintain as you move forward. James? James Gukeisen: Thanks, Joe. So let's take a little deeper look at POS interchange
since it is 10 times more complicated than ATM interchange. And yes, I readily admit that ATM interchange alone is enough to give anyone a headache. Many potential vendors may offer examples of blended or average interchange.
Be very careful using those averages in any projections. So what you will want to know is what constitutes that average because I can assure you that if 80% of your member transactions occur at Big Box or grocery stores, the vendor's blended average and your real number
may be completely different. So your POS interchange income may also vary seasonally due to holiday shopping or vacations. For instance, members will use a credit card to secure a hotel room and that in turn may cause them to skip a trip to the grocery store while
they're out of town. Now, multiply that occurrence by the number of active card and card holders and seasonal various patterns do tend to emerge. And of course, the bottom line is the point. So be mindful of the fees, including the transactional fees, the
monthly fees and sometimes quarterly fees that impact your income. All that being said, there is nothing that will make our Wednesday wonderful like explaining the income and expense component of a debit ATM program. But just remember, when it is your
members out in the world, you are the issuer and you will make money on POS transactions and pay out money on ATM transactions. When non-members come to your ATMs, you are the acquirer and you will earn money. Your members at your terminals are
On Us transactions and it is ultimately up to you how you determine if an On Us transaction is a net benefit to the credit union. Now, before we move on, I'll just mention that the net benefit of an On Us transaction, and what is that? Well, determine the total cost
of your ATM program including any one time cost and staffing cost for things like processing adjustments and divide that by the total number of On Us transactions. Then compare that to the cost of a teller transaction. Which costs more? Do you have a very complicated spread sheet you can
use if you ever want to spend a couple of weeks on that type of research? It's there for you. Now, before we get into credit cards, there are other program options as well for credit unions, starting up our spending. Specifically, a prepaid debit program or
proprietary card program. The prepaid card program is normally a good funds model solution so there is very limited risk to a credit union, which may be very attractive to the smaller credit unions. A proprietary card is a card that can access ATMs and conduct
PIN, POS transactions at merchant locations, but does not carry the Visa, MasterCard or Discover logo. So the member cannot sign for the purchase. Dominic Carullo: And James, I have a question. James Gukeisen: Go ahead. Dominic Carullo: Some of the smaller credit unions earlier said that they thought they were too small for a debit card program, would a
prepaid debit card work better for a smaller credit union? James Gukeisen: Yeah, yeah. It mitigates the risk and eliminates a lot of the need for things like staffing for adjustments. It pretty much takes care of the risk management aspect of it unless you're looking to overrun, just to take on that type of risk. Dominic Carullo: So that
option is out there for the very small credit unions that want to offer such a service. James Gukeisen: It is. And it's out there from a lot of organizations. Dominic Carullo: Okay, very good. I think we're moving on to Joe now, right? James Gukeisen: Yeah, yeah. Joe Woods: We are. Thanks, Dom. The next big step for some credit unions that you may want to consider after establishing the EFT program through debit and ATM
is a credit card solution. I can see how that could be attractive to round at a book of business that may already include your signature loans, mortgages, auto loans and maybe even a little of MBL (member business loans). Here are some things to consider. The list of processors we reviewed earlier can likely provide the connectivity you need to support credit program.
So you can have the same organization for debit, ATM and credit. However, it is not uncommon in this industry to have your debit and ATM programs with one processor and your credit card solution with another, again, reiterating that you have options out there. An important note on the modules you will use from your core to support a credit
union program or credit card program. Before going out to potential vendors, check with your core processor to make sure you have the credit card module in place. And more importantly, if you do not, what's the cost for adding that? We use the term module loosely, but we're simply referring to the software package on your
core solution that allow us for booking a credit card. So you need to take that into consideration as well. Also, as a small credit union, it may be more effective to outsource as much of this as possible, while understanding your loan officers will hand all the decisioning on the applications. The more you focus on the technical aspect of the program, the less human
resource, the internal support staff is available to focus on managing the risk associated with the card portfolio. Back to you, James. James Gukeisen: Thanks, Joe. Keep in mind that outsourcing is referring to the technical aspect of passing the transaction from the issuer
to the acquirer and all the necessarily monthly jobs such as running card reissues. You want to keep your limited staff resources available for things like reviewing your fee schedule and making sure your special card offers are competitive.
Obviously, it keeps your interest rates specials attractive to your members and ensure you're optimizing your income opportunities. Because you will need to decide after consideration for things like loss allowance and overhead, if you can support a
rewards program, we will go over three pretty straightforward rewards options in two different categories, issuer funded and market funded rewards. For the issuer funded reward solution, your credit union can either accrue for the points as they're earned by the members
or you can buy the points. Now, buying points means paying a set amount per point to your vendor as they are earned. Alternatively, your third option is a merchant funded rewards program where your credit union pays a said amount often for card account. And the member
gets rewarded via gift cards and/or discounts from the merchants. Generally speaking, the issuer accrual method may be the most inexpensive but is subject to seasonal searches and redemption costs. The buying the points option is the most expensive
typically because your vendor will not allow for a loss. Now, you do have some leverage in the ability in setting your redemption levels, but that is also somewhat limited by market conditions. So for instance, you cannot have a travel ticket set at 40,000 points when
everyone else in your market has theirs set at 20,000. The merchant funded solutions will generally cost, i. e., some branding opportunities, but can provide a lower fixed cost option for the credit union. Now, there are plenty of rewards
vendors in the market with many of them being tied to or perhaps even owned directly by the networks and processors. Any of your state leagues or associations may also have a deal in place to directly or indirectly sell the same reward solutions. And
to answer the most common question now, yes, the debit and credit programs can be tied into the same rewards platforms. And house holding of points is pretty much virtually standard across all the different platforms.
Now with your program in place, with or without rewards, marketing and more specifically, cross-selling, become a key component of the successful program. No member approved for any other type of loan should walk out of your branch without information on
your credit card program. And remember that ATM from earlier, your wait screen on the ATM should be telling the world about your credit card program. You know, one last note on that, keeping updated, disclosure everywhere it should be. Keep close,
your league resource or your legal counsel used for the disclosure language and a minimum set quarterly reminders for your whole team to check on potential changes at the state and national level that may impact the disclosure language. And before I move on, I think we're going to, again, pass it
back to Dominic for that next poll question. Dominic Carullo: Yeah, James, that's pretty interesting. You know, here's a question, folks. This is poll question number four of our five poll questions. Does your credit union offer credit card service? The first circle for yes, second circle for no, but we are interested.
The third circle is no because we believe we're too small. And then finally, the last circle is for N/A if you're not a credit union. And while we're waiting, do we want to pose a question for them? Kathryn Baxter: In fact, we do. We've gotten some very pointed questions, so I think they're going to be interesting.
But I want to highlight this particular question. I know we're not really talking about fraud, but of course, with electronic services, there's always that concern. And so, one credit union asked - and so I'll throw it at both of you, James and Joe - what is the best way to protect the credit union's ATM from skimming devices? Have any
ideas? James Gukeisen: I have a lot of ideas. So the first thing I would recommend is very low tech, right? One, get and keep a log and take pictures of your ATM and the surroundings
of your ATM. Keep the pictures in the log and assign someone at your branch or branches to check your ATM. I would suggest every day. It takes two minutes. Keep the pictures for reference, look for anything that's different physically at your ATM. And go up
and touch the ATM. Keep some of that sanitary gel around, that's fine, but touch your keypad, touch your dip reader or your mechanical reader, pull on it a little bit, see if it's loose. Look above the keypad at the lighting and camera area and see if
that looks out of place or if that looks new. It should be clean but it's not clean all the time. Check for discrepancies in the dust patterns. I grew up in the credit union industry, maintaining a fleet of about 200 ATMs day to day use at merchant and branch
locations, so I tend to be credit union paranoid about that sort of thing. Besides just that regular log, touching the ATM, having pictures for reference, make sure you have a keypad cover and make sure that if you have a camera - should have a camera,
you're required to have a camera, you actually have a recording device with a good digital recording solution behind it. And keep those recordings for a decent period of time. I won't give you a specific recommendation because I don't know what the requirements are in your area. But, yeah,
there's a lot of very simple low cost things you can do to protect an ATM from fraud. Dominic Carullo: All right, James, thank you. Thank you very much. And it sounds like the simple answer is just inspect it and try to inspect it once a day, whether it's with your camera or a personal inspection. Now, here's the answer to our question. It looks
like about 65% of our folks said they already do - of the credit unions out there do already offer credit card services. But more interesting, we have at least 12% of our audience out there that are very interested in starting up a credit card program. And with that, I'm going to turn this back to Joe.
Joe Woods: All right, thanks, Dom. Now we're going to get into mobile, everybody. Once you've got your EFT program established in whatever manner best serves your credit union and your members, you may want to develop a mobile app to better stay in contact with the membership. Depending on what you would like to achieve with your app, there are plenty of options. We will
examine two choices for integration - either core or web-based. An important note - normally, implementation costs for what we call an mRDC, or mobile remote deposit capture solution, are always going to be separate and significant from the cost of the basic mobile app itself.
There will be plenty of vendors to compete for your business, so you can expect your core solution, your network, your processors and a host of independent third party companies out there with mobile apps to offer something for you and your membership. James? James Gukeisen: Thank you, Joe.
So the first option is a direct connection to your core that is independent of your home banking site. Because the core integration requires a project to be open with your core, you can expect to set up fees from both the mobile app provider and your core.
It is imperative as you go through this process to set the credit union's priorities for your app, certainly ahead of any sales presentation. Treat it almost like an internal to-do list. The discovery process will explore many of the bells and the whistles
of the mobile app products and they could easily distract from the primary purposes of the app that you want included. The priorities for the mobile app vary greatly from one credit union to the another, but can include ATM and branch locators,
contact information, peer-to-peer mobile payments, account openings and secure transactions for things like bill pay, mobile check deposit and funds transfer. Now, the monthly fees will vary but in some cases, there could
be less variance as the vendors offer a wide array of billing scenarios, from active users, users or simply a fixed cost based on the number of members the credit union has. Now, the web-based option is
very similar to the core integrated solution but there are some distinctions. First, the web option bypasses the need for core integration and that can provide some significant initial savings in both time and capital. However, the credit union has
to have a home banking site the mobile application can access so your members can conduct secure financial transactions. Think of the web-based option as a mobile branch where you'll only have to log in to conduct those financial transactions.
Now, the other limitation surrounds loan applications and perhaps things like bill pay. If you need a direct connection to a core module, go with core integration. But if you are satisfied with something like a queue that feeds into your staff for those loan applications,
either option will do. One other scenario not covered here is developing - your own app could be published. And that's simply based on the fact that the audience may not have the IT/IS department resources available for coding and then maintaining
the app. Now, an mRDC solution will work effectively with either option but will always require a separate installation project along with one-time and monthly fees. Now, one last
note on mobile. I have over 40 credit union apps on my smartphone, like literally. Just to better understand what credit unions are offering to us members, it is okay to download apps just to look at the layout and see what you like and see what features are attractive or not.
You do not need a credit union account to download the app. You only need an account to actually conduct the secure financial transactions. Now, with that, I think we're going to move it over to Dominic for another poll question. Dominic Carullo: Terrific job, James and Joe. I'm sure our audience
has quite a few questions for you guys. And, audience, if you haven't sent in your questions, then get them in. Kathryn's over there waiting for them. Now, here's our final poll question. And this goes very well with what we've been discussing today. What follow-up webinar would be most useful for you? Now, we've
talked about quite a bit today. Would you like, in our next one, to talk about a deeper understanding of debit card processors and networks, perhaps all things ATM, how to integrate a mobile application and mobile remote deposit capture?
And perhaps, none of them, maybe something else, click on your circles and we'll go over the answers in a moment. And do we want to pose a question now or you want to wait a little at the moment? Kathryn Baxter: Not just yet. Let's encourage the audience to send in some more questions since we're nearing the end
or at the end of our webinar. We want to get as many questions as possible. We have some, would like some more. Dominic Carullo: Okay. Well, hey, let's take a look at the answer to our poll. It looks like the majority of you would like a deeper understanding of the debit card processes and also how to integrate a mobile application with a mobile
remote deposit capture. So we have some leads for our future webinars and we will take a good look at that. Okay, folks, as promised, you can now get your certificate of completion. Now, as we mentioned earlier,
to qualify, you must have been online for at least 45 minutes, answered our five poll questions and correctly answer 12 of our 15 questions on our quiz. Now, as we mentioned before, for your convenience and to allow you to listen to the full webinar, we'll leave the console open for one full
hour after the webinar to allow you sufficient time to answer the quiz. And by the way, if you answered the quiz and you don't get 12 of the 15 correct, you can retake the quiz as often as you like to get the correct answers and to pass the quiz. We, at the NCUA,
encourage you to explore the benefits of becoming a CDFI qualified credit union. Now, if you want to know more about the CDFI and the benefits that they offer, we provide on this slide a link to one of our webinars that we've recently conducted and also a link
to a video that will tell you a great deal about the CDFI. Now, the CDFI stands for the Community Development Financial Institutions Fund. The goal of the CDFI is to increase economic opportunity and promote community development investments for underserved populations
and in distress communities within the United States. Now, to keep this all in perspective, earlier this year, our OSCUl FOCUS e-Newsletter reported that 26 federally-insured credit unions received - now get this - $34.8 million
from the U.S. Treasuries Department Community Development Financial Institutions Fund in 2016. Now, 19 of those credit unions received more than $19 million as first-time awardees. So there's big bucks out there and if you want to improve the services to your underserved markets
out there, here's your opportunity. So take a look at the webinar and the video to learn more about the CDFI fund. Now, coming soon and we are actively working on this project, we are developing a learning management system, also called
the LMS. Now, this will serve as a central repository for all our training materials. And we will provide awards and certificates of completion for the courses that we offer. Now, this is coming soon. Now, here's the link to many of the materials that will –
for a lot of the coursework that will be offered with this LMS project. If you want to take a look at our training materials that we offer here at the Office of Small Credit Unions, you can click on this link. And here is our contact page. Now, aside from asking questions
of our speakers today, if you have any questions about this webinar or any of the products or services offered by OSCUl, contact us by email or give us a call and we will be happy to answer your questions. And with that, I'm going to turn this over to Kathryn.
Kathryn Baxter: All right, Dom. So I am getting ready to push out the survey to everyone. You should see it popping up on your screen any second. And please respond to the survey. We really appreciate your answers. And it's going to help us
to better design some more programs for you. So I am going to start the Q&A and we have a few questions and I'm still encouraging everyone to submit some more. So here is a question. I'm not going to ask Joe or James. Either of you can
chime in. So here's what a credit union wanted to know. They said, is instant issue recommended for debit cards? How would you answer that? Joe Woods: Well, from a marketing perspective - Kathryn Baxter: And that's Joe. Joe Woods: Yes, and this is Joe. From a marketing perspective, instant
issue can be a tremendous benefit. When you think of the purpose of the debit card, it's to get the members using that card, using that transactional account from the credit union right away. And with an instant issue card, they can walk out of the branch with it and start performing transactions. The opposite of that is through
the standard production of a card, waiting 7 to 10 business days for that card to arrive and then hoping your member will activate and start using that card. So from a use and from a marketability, instant issue is a real advantage. Kathryn Baxter: Thank you. James Gukeisen: Absolutely. And a quick note on that, just like
any other service, there are several competitors in the marketplace that are looking to capture credit union business for instant issuance for debit and even credit card. Do a lot of research. You'll be good there.
The instant issuance solutions can be very inexpensive and very effective. There are some that are much more robust and require things like software annual renewals. It just depends on what you're looking forward to achieve. Kathryn Baxter: All righty. So here's another good question.
So the credit union says that - I'm going to try to frame this a little bit better here. They said they've had members ask if they can receive funds electronically from another financial institution. So they said, we are an ACH receiver, Automated Clearing House, right. Is there
another way to get funds electronically other than bill pay? James Gukeisen: Yes, were they talking business or peer-to-peer? Kathryn Baxter: Good question. They didn't specify. James Gukeisen: Okay. So, yes, as far as bill pay, I think some of the brands offer automated services to pay your bills.
Most merchants, you can set up directly to pay your bills with your branded cards. As far as peer-to-peer solutions, there is this culmination, this migration in the industry right now where mobile payments and peer-to-peer payments being tied to your debit card, that's
all kind of coming together and expanding. So again, you have a lot of entrants in the credit union industry that are offering peer-to-peer solutions where you can simply text somebody $50 or $100 and that's very common and it's actually a pretty significant growing section of the
payments industry. Kathryn Baxter: Okay. Don't turn away yet, James. James Gukeisen: No, Ma'am. Kathryn Baxter: You've got another question. James Gukeisen: Okay. Kathryn Baxter: On your last slide, I think the last bullet point mentioned mRDC. So we've had a couple of questions. What in the world is that? James Gukeisen: Okay, mRDC is mobile remote deposit capture.
In general, you can deposit a negotiable instrument, you can deposit a check technically from a laptop or a computer that you have at your home or through snapping a picture on your smartphone. Again, and this almost goes without saying, there are several organizations
that offer an mRDC service to credit unions. And basically, what they do is they set up a process where a member can snap a photo. That third party vendor then bundles up those photos of the checks which, as we know from Check 21, are negotiable instruments.
And they pass it along to the different financial institutions that their checks are written off of or which the checks are written. They'll post a series of deposits or a deposit for each business day to your corporate account. The funds are dispersed on the - depending on your
risk tolerance, the funds can be set up to be dispersed immediately to the member or at the end of the day. Kathryn Baxter: Okay. You know this pretty well, okay. So here's another question for either James or Joe. So here's what a credit union wanted to know. They said, is it
necessary or advisable to operate both an ATM and a debit card program? Joe Woods: I wouldn't say yes, but it also depends, because I really feel strongly that credit unions need to have a debit card program. From an
ATM management perspective, because of the [search R3] programs that are out there and because of the ATM management and outsourcing programs, there are easier ways for a credit union, especially a smaller credit union, to give their members access to those ATMs. However, the debit card program really needs to come first.
James Gukeisen: Yes, absolutely. Kathryn Baxter: Did you want to add anything? James Gukeisen: No, no, just start with your debit card program so your members can access their funds, they can make the purchases and they can make the deposits. And then expand your ATMs, start building the strategic relationships with your sponsors or your segs and look to generate
a well of non-member income. Kathryn Baxter: Okay. Speaking of income, here's another question. The credit union said, the issuer received income on both PIN and signature for point of sale transactions. Is there a difference in the income between the two? James Gukeisen: Yes. And now,
here's where I want to be real specific. The difference between the income and PIN point of sale and signature point of sale is going to vary significantly from credit union to credit union for two reasons. The first reason is going to be the deal that you ink with the brand because there is no standard template.
They're going to negotiate hard, you're going to negotiate hard to non-member accounts, maybe more or less advantageous. The second reason is the most important reason, that's your member patterns. So if you live in a depressed economic area, you're going to get a lot of
big-box store purchases. Those tend to be very low in interchange income opportunities but there's a lot of them. If you live or serve a more affluent area, you're going to get some higher interchange transactions but you'll likely get less of them.
It does balance out in the end. And with that, there are always the standard fees that you have to pay to your processor, your network and your brand either on a daily, a monthly and/or a quarterly basis. Did I miss anything? Joe Woods: I think you got it. James Gukeisen: Okay.
Kathryn Baxter: Okay. That's involved. Speaking of interchange revenue, how can you increase the interchange revenue for the credit union? James Gukeisen: Well, the first thing I would do that does not cost any money but does cost hours is look at your
reports. And when I say look at your reports, I mean if you have a processor, every processor either provides to you or makes available to you a series of reports on a monthly basis. They should be able to provide you a list of the report titles. And you'll want to look for the summary reports. The summary reports typically
give you like top 10 or top 50 locations where your members are conducting transactions. So now that you know how many transactions you have and where your members are shopping, it becomes an initiative thing. How much effort do you want to invest on encouraging those members
to conduct more transactions at those locations or to shift their spending patterns to different locations that are more advantageous for credit union income? Joe Woods: And I would add to that even from more of a basic level, looking at your card program. Your debit card processor will come with some fixed
fees, some fixed monthly quarterly annual costs that you're going to pay regardless of how many cards and transactions you have inside your program. So you need to build your card portfolio up and you need to get those cards active. You want your members. We always call it, you know, PFI. You want to be their preferred financial institution, and one of the reasons why is
if you're not you're missing out on that interchange. The average, if you're a PFI, you're getting somewhere between 17 and 21 transactions per debit card per month on the POS side, and that is your income. If not, you might be getting one or two but you're still paying a lot of those fixed costs for those cards. James Gukeisen: And
there's a whole other webinar and just I'll wrap it up. There's a whole other webinar when you're talking about shifting member activity because everybody is a creature of habit. And then using a more complex solution like a rewards program where you're incentivizing your credit union members to conduct
certain types of shop. You know, back to school shop. Make sure that, you know, you use your rewards program to ensure that you're the PFI by double-pointing your back-to-school shopping or double-pointing or triple-pointing your gas purchases during your summer vacation times. I mean, there's very complex
formulas and research you can do or some simple research you can do in that perspective. Kathryn Baxter: Okay, so, James, now, you had, on an earlier slide, I don't know if you'll remember which one it was, you mentioned a topper. James Gukeisen: Yes. Kathryn Baxter: Do you remember which slide it was? I wanted to go there. James Gukeisen: I don't remember what
slide. Kathryn Baxter: Okay. Joe Woods: But we can explain it. Kathryn Baxter: Yes. James Gukeisen: Yeah. Kathryn Baxter: Would you please? Joe Woods: That's an easy one. James Gukeisen: Yes. Kathryn Baxter: Okay. James Gukeisen: Yeah, the topper or the top of the ATM is the - when you walk up and you look at an ATM from a credit union perspective there is basically three pieces. There's the topper which list the institution's name
and maybe the financial institution. That's the topper. Typically those cost like a few hundred bucks to set up and you want to put your credit union name up there and maybe a credit union name with a SEG or something like that. And then that middle section is the member screen where in their keypad and then that button
section is typically default area which has like your cassettes to spin some cash. And then, if it is a full service unit, the equipment for accepting the deposit - so top, middle, bottom. Kathryn Baxter: Thank you. That's very interesting. I wondered what it was myself. Here is a very
interesting question, and I'm going to kind of frame this in the context too of what we talked about earlier when a person, one of the credit unions mentioned about protecting against skimmers. So here is what a credit union said. They said that a local merchant wants them to install an ATM in their store.
They wanted to know how many credit unions are doing this, small credit unions are doing this. But here is the other question that they really want to know. Is the cost - is it a cost or could we expect the small return if we did that. And then I want to add a caveat, what would be the risks
associated, some of them, with having a free-standing ATM in a merchant store? James Gukeisen: Sure. Joe Woods: Well, James, I'll take this, just because I know you could talk for half hour and I don't. James Gukeisen: And I probably would. Joe Woods: So James is the guy for that one. But even from a basic standpoint, yes, there are credit unions that are partnering with some retailers, some merchants to put
in ATM, physically plant an ATM in that store location. There are some additional costs. You';re usually going to have to lease the space from the retailers, so you're going to have to pay a monthly fee plus the retailer typically wants to share in the surcharge and/or the interchange, so they're going to want a piece of the pie. James Gukeisen: Okay. Joe Woods: So it's going to
cut in to your potential margin or your potential revenue for the ATM. Now, at the same time, because you have an ATM now inside a retailer, you're going to attract more people and potentially get more volume for that. So there is that given and take of what is good, what is not. From a security standpoint, you are now running what we call an off-premise ATM.
It's not connected to your branch. It's not in your drive-through. It is not something that you see or work with every day. So there are some additional risks that go along with that that you need to weight. We've seen some credit unions that do well by that - Kathryn Baxter: Okay. Joe Woods: - and others that's - the majority of credit unions typically shy away. Now the, I guess, there is a
third option to consider and that's having those ATMs that you want to plant inside a retailer, having those outsourced. That way the ATM looks and feels, it's wrapped, it's got your topper. It's got your colors on it. And it looks like it's you but it's managed solely by somebody else. James Gukeisen: Yeah. And we have seen a couple of instances
of smaller credit unions partnered to deploy an ATM at a third-party location. Joe Woods: Right. James Gukeisen: There's really no limit. You don't have to have just one credit union's name on the topper. Think of it as squares. So you've got four big square up there, partner with a couple
of other small credit unions to get that ATM out there and mitigate the cost and its marketing, good marketing. Kathryn Baxter: So now, I'm going to ask another question here, James. He wanted to jump on this earlier. But, Joe, please chime in again.
So someone in our audience asked the question, what have you found to be some of the compliance pitfalls of mobile banking and remote deposit capture, anything that pops out of your head? James Gukeisen: From a compliance perspective? Kathryn Baxter: Mm-hmm, that credit unions have
concerns about. James Gukeisen: Yeah, the knee-jerk reaction to hold the funds for ten days, because it's a mobile deposit as opposed to what has now become a traditional ATM deposit. There is a certain level of - I think in the
industry and it's just opinion, there's still a certain level of discomfort in trusting members to deposit the image rather than the physical item. And you tend to want to hold the funds so that they don't run out and deposit the physical item
at a third-party location so that you get double credit. It's been my experience that it's a possibility but it's a rare occurrence. That's just not something that happens. Typically, that's controlled by a credit union decision the deposit privilege in
general on an account at the account opening. So that tends to mitigate it. Your (prodsters) aren't going to want to wait six months if they just open a savings account or just a check in and savings for that privilege. They're going to go to the target down the street that doesn't have that type of protocol. But in
general once it's an established member, you don't need to hold the funds any longer than you would an ATM deposit. As far as specific compliance issues, I don't know. I would need to know the state and you're talking about making a deposit to give you any type of qualified
answer. Kathryn Baxter: Okay, no worries. Joe Woods: Yeah. Kathryn Baxter: I'm sure there are some. James Gukeisen: Well, yeah, because there are some states that are much more stringent and then others, some, you just follow federal rules and you're good, some states have additional rules and I am not read up on that. Kathryn Baxter: Okay. James Gukeisen: So I couldn't
give a qualified advice yet. Kathryn Baxter: Well, here is a good one. Dom, you look like you have something to say? Okay. All right. Here is a good question too. So the credit union wants to know about, is it possible to join more networks, ATM network, to benefit the members and to get more surcharge fee from ATM?
Is it cost effective for a credit union to have multiple vendor networks? Two-part question. Joe Woods: From an ATM perspective, yes. Kathryn Baxter: Okay. Joe Woods: From both an issuing and acquiring side. Now, and you split the two up, and it's appropriate to split the two up. From an issuing side, you can partner with multiple ATM networks
to add surcharge-free options for your membership. From an acquiring perspective, you can add multiple networks to enable your ATM to acquire more transactions and potentially even more interchange-friendly, interchange-heavy transactions, so you can gather more interchange
at your ATM and help cover the cost of that terminal, absolutely. James Gukeisen: Yeah. So you never want a transaction to walk away to an ATM down the street. Kathryn Baxter: Speaking of ATMs, how is this? Someone from the credit union wants to know, does (CU24) offer ATM machines?
James Gukeisen: Am I allowed to talk about that? Kathryn Baxter: It's a question. James Gukeisen: Yes, the answer is yes. Kathryn Baxter: Okay. James Gukeisen: We offer managed services. Joe Woods: Yeah. Kathryn Baxter: Okay, very good. James Gukeisen: I want to respect the spirit, not just the rule. Kathryn Baxter: You did. You did. James Gukeisen: Okay. Kathryn Baxter: You did good. Okay, let me get another question here.
Also, I don't think you guys had your contact information but we've had a credit union request your contact information. I don't think it's on the - here are pictures. Joe Woods: I think it's on the bio. Kathryn Baxter: Is it? Okay. So if you download the bios, you'll get their contact information.
Joe Woods: And if for some reason you can't download the bios, James and I are both on Linked-In. James Gukeisen: Yeah. Kathryn Baxter: Okay. Great. James Gukeisen: And I know we have some West Coast, again, within the spirit, I'm pretty much available 24/7 because I grew up in a credit union operations environment, so whatever.
Dominic Carullo: Yeah, there is our information. It's right on our bios. Kathryn Baxter: Okay, great. Joe Woods: Yeah. Kathryn Baxter: Very good. There it is. Dominic Carullo: And they pushed a little widget at the bottom of the screen. Kathryn Baxter: Okay. There is the bio widget, which one is it? So it's the blue one. Is it the blue one? Yeah, yes.
So the blue widget at the bottom of your console has their bio information in it. So I think we have one more question for our speakers. So a credit union wants to know what the –
for prepaid debit cards, what are the disadvantages in terms of compliance issues? Is it worth it? James Gukeisen: It depends on the partner you select. It can be worth it. When I say it depends on the partner, you select from a compliance issue,
if you have a good partner, from the delivery aspect of the card, you're basically a retail location. So a lot of the compliance or the vast majority of the compliance or all the compliance should be owned by your partner so that they're not just reaping all the interchange
reward and saying you're stuck with a loss. Typically, it's a good funds model. So all of the compliance materials, all the marketing materials, they should have a pretty standard deck for you or the materials available that have been reviewed and approved by the, ultimately, the issuing institution,
legal and compliance experts, so that you can go into it with a pretty good trust factor. Again, just do a lot of good shopping and, you know, typically you have good instincts when they come in they start talking about their program. Again, it all goes back to a partner or these
people who are trying to just sell you something so they meet their quota. Are they trying to get to the next deal? So in general, yes, but, you know, I've looked at a lot of iffy partners out there, so. Kathryn Baxter: Okay, so this one isn't actually the last question. James Gukeisen: Okay. Kathryn Baxter: We have some more questions that came in.
So here's another one. So the credit union wants to know, can they offer debit card on share savings? James Gukeisen: Well, I did. I did. When I say I, I mean, when I worked at my credit union, I did. We did a little research and, yeah, we could do it. And so
we had all kinds of different flavors of debit cards. We had a consumer debit business data HAS. We had them accessing one or two share draft accounts and then share accounts. So typically, yeah, but again, I'm not qualified. I don't know if there are any particular rules at the state level. So I can just say,
yeah, I did. I did enthusiastically to get debit cards and people certainly can. Joe Woods: Right. In most cases, with a share savings, you typically, you can almost go back to what we used to call the ATM card. James Gukeisen: Yeah. Joe Woods: It won't carry the Visa or the MasterCard brand but you can offer an ATM card and it will allow pinned-POS transactions. So they can go out the merchants.
They'll just have to use the pin option. They won't be able to use the signature option. James Gukeisen: Yeah. Joe Woods: So it is possible. James Gukeisen: Yeah, and I think permission goes back to like, what is a Reg-D? Kathryn Baxter: Yeah. James Gukeisen: Yeah, Reg-D, so, but, yeah, I don't think the fee rules apply anymore, so shared draft accounts are basically transaction accounts. At least that's where we like it. Kathryn Baxter: So here's another
question on ATMs. This credit union wants to know, is it beneficial to drive your own ATM as an intercept process? James Gukeisen: Well, how big are you? And the reason I say that is I've known a lot of people in the industry that move over from processors
and they take credit union jobs. So they have their condition to drive their own terminals and they have the level of expertise and they can keep up with not just compliance but the industry requirements as far as supporting the messages. And when I say message, I mean,
the transaction that moves back and forth between issuers and acquirers. There is a very basic layout, but that layout has to support a lot of things and those things change every six months, every 12 months as the different
functionality is added to that ATM transaction type. So if you have the expertise in house and you're comfortable with driving your terminals, yeah, it's fine. If you don't have that expertise and that time resource to make sure you're supporting the transaction type,
man, I would just, I'd pay the pennies and have my processor do it. Just in general from a management perspective. Kathryn Baxter: So we have a few more questions here. Let's see if we can get to them all. So here's a good one. Credit union wants to know which issuance is more secure for debit ATM
cards, traditional or instant issue? Joe Woods: Well, there are risks associated with both. So from an instant issue perspective, the credit union now has to keep on file or keep in house under lock and key that stack of cards
so that the card itself is not compromised. So there is that consideration. From a mailer perspective, your traditional mailing out of the debit cards or ATM cards, you do have the threat of theft and loss through the mail. That's one of the reasons why more times than not we the card going out
separate and the pin, the four-digit pin, follows in another letter a day or two behind usually. So there are risks with both and you have to manage both accordingly. James Gukeisen: Yeah, the Visa or MasterCard or Discover requirements for the unembossed, unencoded
card stock that you have to keep at your branches so that you can insert the stock into the instant issuance machine which are pretty much laser printed now. If you have an embossed encoded raised instant issuance machine, I would switch over to a laser printed now. It's much simpler. It's much less as far
as cost and it doesn't break as much. Yeah, I would go with instant issuance if I could because a lot of your platforms now support pin select as long as you're maintaining your pin offset at the core processor level and not on your actual card.
Kathryn Baxter: Alrighty. Very good information. Here is another one on ATM cards. So the credit union, it already issues ATM cards and debit cards. So they want to know what are some things that they need to consider if they're thinking about consolidating this and offering debit cards only and no longer offering ATM cards?
James Gukeisen: I think in general, you should always try to shrink your proprietary card. And ATM card and proprietary card are one and the same. You know, people say ATM card is a bit of a misnomer because most of your ATM cards are not ATM-only cards anymore. They're both ATM and point-of-sale cards.
They just can't sign for the transaction. And in general, you should set up a reissue cycle that tries to shrink your proprietary inactive cards. And if you have some activity, reissue debit cards for those members since the accounts that they're tied to be probably transaction accounts. And you can go ahead and get that
branded card in their hand and they have not just the pin and signature but now you have a wider online purchase opportunity for that member. Kathryn Baxter: Okay. Now here's another. This is a - can you tell us the difference between an ATM
card and a debit card? James Gukeisen: I think we just did. Joe Woods: I think we just did but that's all right. Yeah, the ATM card typically will not carry the Visa or MasterCard brand and it is only a pin network based card. So you can use at an ATM or you can use it at a retailer or merchant if you select pin;
if you try to select signature, it won't work because then it will be trying to route it over Visa and MasterCard and they won't recognize the card. Kathryn Baxter: Alrighty. Okay. Now, here is an interesting, I think this may be our last question. So the credit union wants to know, they've heard
that debit card interchange will be decreasing in the future or possibly going away. Have you heard anything? Joe Woods: Oh, yeah. James Gukeisen: Yeah, I hear that every other year. No, I'm not being whimsical. So, and Joe, I think, I may step on your toes, I apologize. Joe Woods: That's all right. James Gukeisen: There's two competing forces. There's
the issuers and the acquirers. The credit unions, banks, other financial institutions and then the retail locations, they both have large groups of lobbyist that are working at the Hill non-stop trying to increase interchange on one side
or decrease and significantly control interchange on the other side. Who's going to win? I honestly, I just don't know. I just know that there is two highly-motivated well-compensated groups on either side advocating for both positions. So I just don't know. Joe Woods: Right. We have seen over the
years these signature, Visa and MasterCard interchange has come down at the same time the debit or the pin-network interchange has gone up. There still is a little bit of a gap between the two of them, but now, with the markets really at its maturity, interchange will begin to
compress. It will begin to shrink over time. I think that's unfortunate. However, fortunately, the United States is behind on this. But the rest of the world has a much smaller interchange spread. So we've been fortunate for a while and I think we'll continue to
ride that wave for the near future, but we do have to recognize that in other areas of the world interchange is not what it is here. James Gukeisen: Yeah, yeah. Kathryn Baxter: Wow. Well, everyone, I think we are fresh out of time. I told you we'd have a great
webinar for your today. We'd like to thank our speakers, James I'm going to mispronounce your name again. James Gukeisen: Gukeisen. Kathryn Baxter: Gukeisen. James Gukeisen: There you go. Kathryn Baxter: James Gukeisen from CU24 and I'm trying to push their pictures out once again. There is James somewhere here.
And here is Joe. There's James and here is Joe. Joe said he looks like Robert Downey Jr. Joe Woods: Oh. Kathryn Baxter: If he gets a mustache and a goatee he might. So thank you so much for joining us gentlemen. Joe Woods: A pleasure. Kathryn Baxter: And we'd like to thank Dom Carullo who is our wonderful host, Franz Ayento
is our behind-the-scenes guy. And we'd like to thank the ON24 cast for helping us out. This is Kathryn Baxter, I am signing off of the afternoon. We hope to be checking in with you in May because we will have a webinar, hopefully, on grants. So take care. Have a wonderful afternoon everyone and a great week.
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Sélectionner la langue de votre choix - Facture des services d'eau - Duration: 0:36.
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Business News Report | Virtual Office & Business Services in London - Duration: 2:51.
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British companies falling behind the rest of Europe when it comes to investing in workplace
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Paterson Oration 2018: Peter Hughes on a 'spirit of service' in the public sector - Duration: 38:37.
<Māori greeting>
I greet you today in Te Reo Māori - the language of the indigenous
people of New Zealand. I acknowledge you as individuals of standing, I acknowledge
in particular your families and the peoples from whom you have come here
tonight and I acknowledge you as leaders in our cause. To all of you my
greetings. He's not here but I do want to thank Uncle Ray
Davidson for his very warm and very special welcome here tonight and it's
important that you do this and very special that he did. I'd also like to acknowledge the Gadigal people and the elders of the Eora nation and to
extend my respects to them. I also would like to acknowledge Dr. John Peterson a
founding member of ANZSOG and one of Australia's
most esteemed public servants and extraordinary thinkers. we honour his
commitment to the idea of public service and it's a great pleasure
and absolute privilege to deliver this Oration today
especially with John's family here and his wife Mary I want to acknowledge you
and also Sophie his daughter. I think it's very special having you both here
Lastly I'd like to acknowledge the ANZSOG board and other members of the ANZSOG
family Dean Professor Ken Smith and all of you associated with ANZSOG
in various ways and especially our prize winners welcome and thank
for coming tonight. So let me start by just saying simply this
and that is I really do believe in the idea of public service I really do
believe in the spirit of service that our New Zealand state sector act talks
about. And while perhaps it's an old-fashioned word I really do believe
that it is a noble thing to choose to serve your country and your fellow
citizens as your career and like all public servants like many of you in this
room I choose to do that myself because I care and want to make a difference
we all do. I believe that public service is
something that we should acknowledge celebrate and reward and all too
often that doesn't happen and all too often the reverse happens and I find
that very sad. So many of you in this room have made a commitment to public
service and while we might each talk about it in different ways at some level
I think we're all meaning the same thing so let me talk a little bit about what
it means to me, for me public service is about three things and the first
thing is putting the needs of others first putting others first it's about
opening our hearts and our minds and our resources and our time and our energies
to the needs of others and it's about being totally focused on the customer
client or citizen. It's also secondly about bringing the right attitude to
that not that we are subservient in any way but we approach our work with
humility in the desire to serve others to be of service to others and finally
for me it's absolutely about having a higher purpose that's about being
motivated by something bigger than ourselves the desire to use our skills
in their talents to make our world our country our families our communities a
better place.
So I want to also start by sharing a little bit about my story
we all come to public service in different ways and I'm one of
those people who fell into public service so I was at university I was
doing two degrees total and degrees I did a degree in English literature and
French language you get a long way in the public service with French language, but I was also doing
a law degree in those days we had to pay our way through university by
working in the holidays all of the holidays every day of the holidays and I
was very lucky in getting a permanent job at the old Department of Social
Welfare in New Zealand and they put me on the front desk and I loved that work
I absolutely loved that work I used to look forward to the holidays, I used to look
forward to working on the front desk they put me on the front desk of the
dole office because in those days women weren't allowed to work in the
dole office it was regarded as too rough so they put me there out front and
what happened for me was the counterpoint between that andstudying law I finished
the other degree just became too big for me it just became too big for me
personally and I just couldn't see myself being a lawyer I couldn't see
myself doing trust and estate planning for the rest of my life but I
couldn't see myself doing what it was I did that the old Department of Social
Work because I thought I was making a difference
and I found the work hugely meaningful and I thought I was making a difference
so I dropped out, I dropped out of the law degree and I went on permanent staff
and stayed out on the front line for a number of years a
short time later I got a job on the domestic purposes benefits division this
is the outfit that pays sole parents and this was a promotion because it was more
complicated work and the very wise woman who was the section head
sent me out with the home visit officer to to visit the sole parents in their homes and we used to do that every time somebody applied for benefit
and I don't know about Australia but in New Zealand this is a
group of individuals who are very stigmatized in the community and you see
and hear and read a lot of really negative and awful stuff about them but
that was not what I saw when I saw when I had the privilege of going into their
homes was women struggling I saw courage I saw determination and I saw a heap of
love and the thing that I learned doing that job the really important thing that
I learnedin doing that job that has served me well all through my time working in
welfare is that there is nobody in this world who cares me more for a child than
their parents, whatever it is you hear about people on benefit that is true and
so that for me was a huge privilege and it was really meaningful and that was
when I decided to make public service my career and I stayed in that organization
for quite a long part of my career. I ended up
having the privilege of leading it. One of the things I think that we don't do
enough these days is talk about that stuff is talk about why we're here let's
talk about the values that drive us let's talk about the higher moral purpose and
one of the reasons for that is our experience in the public service I guess
around the world but certainly in New Zealand over the last 13 years in New
Zealand in the early 90s the public service the state sector underwent huge
reform these were very radical market-oriented reforms now I was a huge
advocate of these reforms and I still am but one of the things that happened with these
reforms in New Zealand as we shifted our focus away from the public service
as a whole onto our own individual agencies these days in New Zealand if
you asked somebody where they worked and they were a public
servant they would not say that they're a public servant they would say that
they worked for a particular agency they would say that they were a social worker
for health the Ministry of Health or a probationary officer in the Department
of Corrections they wouldn't say they were a public servant so with the reforms we
shifted our focus on to the individual agencies and I do think we've lost
the sense of being part of something bigger with a higher purpose with a
moral purpose and in many ways I think we lost our heart so like I'm doing here
tonight since I've been in this job and I've been in this job that nearly two
years now I start every single speech no matter what the audience what the event
what the topic is by talking about this stuff and I always get a hugely
positive response to it always even from private sector audiences. I get the
hugely positive response and that is because I think I'm articulating
something that everybody believes in or wants to believe in but nobody says
anymore and I think we need to start saying it. In March of last year about
nine months after I took up this job we held that public service leaders summit
in Wellington because as incoming head of state services I thought I
should front up and I thought I should talk about what I'm about and I should
thought I should talk about my ambition for us in the public service and so we
hired the biggest venue we could and we filled it with as many people as we
could we had about seven or eight hundred public service leaders in this
huge big venue and we spent the morning of the day
reflecting on why we'd signed up to public service I asked them the
question we also talked about the spirit of service and what that means to each
of us and just as I shared with you each of those individuals shared with each
other how it was that they came to be a public servant and when it was the
moment it was that they decided to make public service their career and the
stories that we heard were inspiring humbling and very often moving now we
didn't plan to do this but what we decided to do on the day was to get some
of those people up onto the stage huge stage hundreds of people in this
venue, big screens microphones to share these stories and they did and for
about an hour there was a queue on either side of that stage of people
wanting to come up and talk about this stuff and talk about why there were
public servants and how they came to be here and in particular the spirit of
service now we haven't got time for me to show you those stories but I am going
to show you some of those New Zealand public servants talking about its
spirit of service
VIDEO: the spirit of service for me is all about integrity we've got to have
integrity and everything we do to help the people of New Zealand have fantastic
lives It's about the sense that ultimately it's
not about me it's about the country and so there's a sense in which you're
working for something that's beyond me and something that's in service to
something else. In the projects that you get to work on are
just so diverse and span every community in New Zealand that really I mean you come to work
feeling like you are really making a difference to New Zealand and to New
Zealanders and to all the people who live here and it's a really strong
connection. That's what I love about being a public servant is
that I have an opportunity to make a difference just because I'm in the room
and just because of what I bring to the conversations that we have that are
going to make a difference for this nation. The first point is that the
public should expect something of us you know we need to help them have high
expectations of us to set standards for us to deliver to. There are a lot of
things I really missed from being in the public service: empathy and understanding
and remembering that you are dealing with people. Our life is not about self
it's really about what we can do to make lives much better. I work for my country
and I'm incredibly ambitious and aspirational for what this country can
be and for the people who live here and that to me is the ultimate job. What I've
learnt over that 30 years is that us working together collectively making
sure that we're open and transparent and effective can make a significant
difference for all New Zealanders. Well you know I think the opportunity to make
change in people's lives is such a huge thing in something that often I think is
underestimated so when you get to run a large public service organization you
really get to feel how much authority you've got to change lives and to shape
the futures of the people that you deal with. It's really hard to corrupt your
democracy if you've got a hard-working honest effective and efficient public
service. The spirit of service is the question
why are we here and why are we here is to make a difference for New Zealanders
in whatever area we work in. At the end of the day all of us all the time should
be thinking does this make a difference and does this make the lives of New
Zealanders better. For me it's just about doing the right thing and I think the
service is recognizing that these are jobs but they actually contribute so
much and it's believing in that and wanting to be part of that and just
doing the right thing for people in our country. Peter: So you notice they're talking
about the spirit of service we're starting to talk about the spirit of
service in New Zealand and these are all salt of the earth public servants
talking about that and why they do do these jobs and back in that venue in
Wellington is I listened to them I realised that the spirit of service is
alive and well in the New Zealand public service I realized that it was deeply
felt is deeply felt and held by the people who choose to work in our public
service and I realized that that particular baby was not thrown out with the
bathwater of the '90s reforms. It is there but we are not fostering that we
are not nurturing it and we are not leveraging it. So I say it's time to
start talking about it all of us but especially those of us called to public
service and called to leadership in public service
we're often criticised and we often get down about that but if we're not clear
about why we're here and what we believe in how can we expect anybody else to
believe in us and for those of us who are leaders that call starts
with us. We need to articulate communicate and model the ideal of
public service and the spirit of service. We need to acknowledge it and reward it
wherever we see it in action and it needs to be absolutely fundamental to
our expectations of our staff, their work in the motivation that they bring to it.
We've started talking about the spirit of service in New Zealand I say let's do it.
Let me talk a little bit now about the public service and its
constitutional role because this is part of it now I'm not one of those who believes that the
public service is simply the delivery arm of the executive branch of
government. I am somebody who believes the public service is a special part of
our constitutional democracy. I often refer to the public service as a
constitutional artefactt so for me it's part of the
constitutional architecture that guarantees our form of government and its
legitimacy and for me there are four things that underpin the public service
in that constitutional role and I call them the foundational pillars because
pretty much everything else proceeds from that and these are things that are
really precious and I think we need to pay some attention to. The first is
political neutrality the second is free frrank and fearless advice the third is
merit appointments we all take that for granted but it's really important and the
fourth is open government and I believe it is the responsibility of each
generation of public service leadership to nurture and protect these and I'll
talk about three of them just very briefly. Political neutrality is I think
the absolute bottom line to assuring an enduring career public service in the
Westminster tradition but it's something that's under pressure in various ways in
most jurisdictions and I know that some of you here feel that about Australia as
well. The public service as a whole must be
able to garner the trust confidence and ultimately the respect of successive
administrations in order to do its job. And the key for me is to engage actively
with the political context without becoming part of it so for me there is a
line. There is a line and politicians respect public servants who go down to
the line but not over it. Politicians put themselves out there every day. There's
nothing tainted about politics in my view politics is the
democracy in action and our politicians put themselves out there every day but they
don't respect public servants who stay posited in an ivory tower of neutrality
or independence who take no risks who sit on the hill looking down on the line
lobbing their advice over it shrugging their shoulders and washing
their hands of accountability. Thatt's very easy to do. There is a line and I say we
go down to the line but not over it. Often there are people and forces trying
to pull us over the line - every public servant in the room will know that this
is not easy stuff. Political advisors can be one of those. You have political
advisors in your system we now have them in New Zealand. They will respond to the
complexity of a fast-moving political context powered up
by social media and other media and like many other jurisdictions, political
advisors have just happened. They just arrived on the scene. They filled a
market gap but it's a role that in my view needs to be positioned in a
constitutional sense otherwise it is a risk to us. We need political advisors to
understand and own the line we need them to understand and own the role of the
public service. In New Zealand political advisors are public servants, they work
for a government department and before the last election I took the opportunity
to issue using my powers as Commissioner under the Act, a code of conduct for
political advisors - a special code of conduct for political advisors. Now this
was not an easy thing to do and that's a whole other story and probably one I'd
rather tell when cameras are not present. But anyway we did it before the last
election we issued the code following the election because we had a change of
governments. I issued further guidance for political advisors because
I wanted to be crystal clear about where the line was. Political advisors working
in the right way, working with their ministers and their public service in the right
way are a guarantee of political neutrality more than they are a threat
to it. Let me talk a little bit about free and frank advice, and again I want
to be clear about what we mean by this, free and frank advice in my book is not
about the bold and fearless public servant facing down the minister as
characterized by some people. It is not a license to be obstructive to the
government's objectives or a minister's policy position. The intended
outcome of free and frank advice is better results and better services for
our country, not officials advancing their own agenda or looking to
demonstrate fearless independence for its own sake. The convention of
giving free and frank advice is designed to support ministers achieve their
objectives but again we need to make sure that this convention operates fit
for purpose in our modern age so when I joined the public service as you now
know it was a long time ago and there were no computers, no mobile phones, no
emails, no texts, none of them. There was one computer
locked away in the third floor and that's what they paid benefits through
otherwise we hit the typing pool as our means of communication. These days the
way I communicate most often with the minister's I work with is
text message - in real time and it's fast and sometimes it's furious but some advice
some advice is so significant that it needs a little more formality than that around
it and it needs to be written down, it needs to be formal and I think we need
to be clear about what constitutes free and frank advice tand why and we need some
rules around it. Free and frank advice in my view is a duty of public servants
it's a bottom-line obligation but we do need some rules around it so again in
New Zealand we've spelled out some of this in the cabinet manual and we've written
it into the codes of conduct applying to political advisers in the public service
in general and I had written that into the performance expectations of our
chief executives or secretaries and we've issued guidelines about that using
my powers under the Act these have formal force of law. We're
also developing a practice around free and frank advice and this has been led
and championed by the head of the policy profession appointed by me to do that so
these things need to be taken care of and they need to be brought up to date
in their operation in the modern age. Open government there are a whole
basket of things under this heading and I've often got myself into trouble
talking about this topic the last time was in Singapore where I found myself on
the other side of the argument with the head of the Australian delegation there
as all of the Asian participants looked on at us arguing about this from our end of the planet.
Open, easy, timely access to official information is an antidote to suspicion
and mistrust and most certainly the converse is true. It's basic in my view
to political and public service accountability and I've heard people say
that open access to information will constrain government and effective
decision-making. I totally disagree. There is a phase in policy development where
things do need to stay confidential where things are flying around floating around
moving around where it's highly dynamic where things do need to stay
confidential otherwise you disturb the creativity of their process but beyond
that when things become more settled when things become propositions they need to
go out they need to go out not just requested but proactively we need to put
them out before we're asked to do that. Now I can't speak for the politicians
but most public servants I know don't fear being accountable
but they do fear being treated unfairly. And they do fear the media and the
others in this regard and that is why we are sometimes reticent about official
information and its release but you can't look at this without the backdrop
of strong ethical active leadership from system leaders and we absolutely need to
back our people to do the right thing and we need to back them to do
this right thing. The thing that I've learned on this job this last job that
I've got is that politician and politicians and others don't always
agree with you in the heat of the moment but if you do the right thing they will
respect you for doing that - not in the moment but in the round, they
will respect you for doing the right thing . And the right thing in my book is
always to be upfront open and accountable. I say to the chief
executives in New Zealand that I don't expect perfection but I do expect
accountability and I say to them that if they do that that they stand up and are
accountable I will back them. When we make a mistake I want us to own it fix it and
learn from it and to do that publicly if necessary and they tell me that that
gives them the confidence to put stuff out and to front up and maybe New
Zealand is a smaller softer more benign society but I find in our country that
people are just sick to death of people like me ducking and diving and spinning
and running for cover and I find that when you do front up and
you tell the truth and you put it out there and you're up front out there and
open they don't want your head on a stick they're just grateful for having somebody
stand up and own something they just want somebody to own something. But all
of these things we can't get away from it none of them work without the guiding
star of clear moral purpose or strong ethical and fair leadership and if we
don't have that and proceed from that all of these things become
very difficult. Let me talk a little bit about the public service and its
future against that backdrop so if the public service exists to support good
government the bigger part of that is helping the government meet the needs
and aspirations of citizens and I want to start here by returning to where I
started out on the front desk of the dole office: the New Zealand before
the reforms of the early 90s we were a bureaucracy, the reforms freed us up
There's a TV program it's very old now called variety of Gliding On, it was a
comedy series I see it more as a documentary, it portrays the public
service head of New zealand before the 90s and you all have a view of what
that looked like, the reforms of the 90s to me were like the Vatican II of the
public service, the windows were open fresh air came in and we were liberated to
get on and do some really good things. Now back then when I started out on the
dole counter in those days it would take on average six weeks to process an
application for the dole - six whole weeks. You would come in fill the forms out
with someone like means I would go in the back office
it would take us six weeks to give you an answer and in the mean time you would
come in and you would beg for money you would beg for emergency grants in order
to feed your family and pay for bills and then at the end of six weeks we'd send
you a letter and we would say congratulations you've been granted the unemployment
benefit there's arrears due but you're not
going to get most of them because we've offset the emergency grants, now get out
in the labor market and sell yourself to employers and prove to us that you're
doing that. But we actually did you know I joined all the right reasons but we
were actually doing a lot of damage and we were doing a lot of damage because
we weren't doing a good job, the reforms of the 90s enabled
us to turn that around and I can remember because I was Southern Regional
Manager for the New Zealand for the Department of work and income in New
Zealand I remember the day we got to same-day service and that is you walk
and and you walk out with an answer. You walk in and you walk out and you get on
with your life - huge progress, and that was enabled by the freeing up of
the system that came from the reforms. But as I said the reforms were before
the age of information technology and these days citizens expect to get all of
their government services by one-stop shopping they expect to go on their device
go onto an app and get the whole lot. Yhey don't see us as separate government
departments they see government as one thing and they want what they need
from government once, in one go and so we need to step up again and we need to
reform again. Citizens also expect governments to deliver better outcomes
not just better services but better outcomes they'd expect government to deal
with social and other problems and to make lives better. Now the first thing
that you figure out once you start focusing on outcomes as every public
servant in the room will know, is that unlike delivering services most of
what you need is not in your department it's elsewhere. Most of what you need to
deliver better outcomes is not in your department. One of the biggest
leaders for better health outcomes is accommodation it's not in the Ministry
of Health, one of the biggest levers for delivering
better educational achievement outcomes is Health Services, one of the
biggest levers for reducing prison musters and doing better in the justice
system is an education ending welfare. So
the engine of better outcomes, the key to it becomes collaboration we need to get
joined up across agencies, across the system, around individuals, families
and community. We need to start with them and organise
around them. So how do we do that? The very first thing in my book has been: be clear
about the outcome. Now I want to be really careful here not everything that
is of value can be measured and not everything that can be measured is of value and I
really believe that otherwise I wouldn't have said everything that I've said so
far but if the outcome is not clear and you can't articulate and define it and
measure in some way, you're really going to struggle to achieve it. In New Zealand
one of the things that's really unlocked things for us is this outcomes focus and
having the governmen step up and take the risk of setting clearly defined
targets or goals, around things like long-term welfare
dependents, supporting vulnerable children, skills and employment, reducing
crime. And the government actually established targets that they published
and published progress on and put them out there and made themselves and us
accountable for them and that's really unlocked things. Of the 12 targets
published we achieved four, partially achieved another four, failed on two and
are still working on two. The point is not that, the point is that we had the
targets and they became a unifying force and focus for the public service and for
us to organise around and what we learned and we learned most on those that we
failed on is that that's exactly what we have to do. Now the new government is
bringing its own approach to targets they're higher level they're more encompassing
and they're legislating them but they're still targets and they still serve the same
purpose. In this new world going forward IT or digital and data
are the keys. IT or digital is the engine of better services and data is the key of
better outcomes and again in New Zealand we're using digital
to join up services for citizens around life events so we don't
actually have to physically get organized IT can do that for us. We've
just launched a thing called Smart Start which is basically an app or a
website for people who are having a baby now to have a baby in New Zealand there
are about twelve different government services you've got to register for or
navigate it's actually a hell of a thing to do at a time in your life when you've
got other concerns and priorities. Smart Start enables you to go and do all of
that in one go at once at one time. It enables you to register the baby
organize paid parental leave, birth certificates, passports, access to health
providers and financial help and a whole lot of other stuff. There are 17 life events
where we are going to do the same thing starting with end of life we're doing
that now, getting a job, starting school, becoming a senior citizen and accessing
health services. So IT is a big engine going forward but actually we still need
to physically change the way organized. IT can do that virtually but
actually physically we need to do that in reality. In New Zealand we've had
sector groups at agency level for some time and we've combined that with the
outcome targets to get some traction. Now we're starting to physically to join up
around outcomes we're organizing around things like child poverty reduction and
climate change. The new Prime Minister's new cabinet committees and those
will align so we've got alignment across the public service political marry. And
those of you who are public servants will know how important that is. We can all
get organised to do better but if the thing fractionates into dozens of
little parts once it crosses the political divide we're wasting our time
so we're achieving that alignment. At the front of the system we've experimented
with a whole bunch of models from loose cooperation to formally mandated teams.
One of the tools I think we're missing though is the ability set up joint
venture companies, joint venture agencies, joint venture organizations in the
private sector if you had a number of private sector companies wanting to
exploit a market that's what they would do, they'd set up a joint venture and I
believe we need to be able to do that in New Zealand as well.
Some of what we do will be virtual through IT some of it will be
hardwired in the ways that I'm saying but the key is to start with the
individual they family and their community and work back from that and organise around
them some of you all know this is not easy
some of you will know that there are big information and privacy issues to do to
be traversed here and I don't intend to go into those partly because it's too
hard but also because we don't have the time but let me just talk a little bit
about privacy and give you my own view. We are in my view wasting our time
trying to adapt current arrangements to do with privacy to this new world, the
paradigm is wrong. In New Zealand our privacy arrangements were born out of
data matching for compliance and administrative efficiency and I know
that because I did it many years ago. What we need is a different regime for
information sharing and data pooling to deliver better services it's a
different thing for a different purpose. Trying to adapt one for the other will not
work in my view and that's what we're experiencing in New Zealand, and in my
experience as well, citizens think differently about this as well. In many
many years of working in this area I've never once encountered resistance from
clients when the purpose has been to help them
not to track them or to catch them out to help them not once. Now all of this
begs some big questions for the future of the public service
especially on transactional services delivery. In one future sees the public
service providing platforms off of which third-party providers can provide
services a bit like Amazon does. When it comes to the outcomes focus especially
if we're dealing with vulnerable marginalized individuals and families
also public servants might not be the right people to get through the front
door we might not get through the front door at all, so partnering with third
parties or allowing them to take responsibility but delivering the whole
service might be as effective. However clearly there are some
areas particularly those using the coercive powers of the state where the
government needs to be the provider it needs to be directly accountable I just
want to be clear about that. But into the future more and more we
will see approaches to the delivery of public services which are clearly and
squarely put the individual client or the family at the
centre of everything. Technology and alternative forms of organization will
play a big role and the boundaries as I've said as to what we do in others do
will shift. But all of this will enable us to make a bigger difference and all
of this I think is very exciting and all of us I think is totally aligned with
the spirit of service and the imperative of moral purpose I talked about earlier.
Around the world in our country, in our two countries and around the world
public servants, politician,s academics and others are grappling with these
issues and in an era characterized by disengagement from governments how do we
build trust and confidence in our public institutions in their important role? How
do we ensure that they are fit for purpose in the 21st century? How do we
meet the ever-increasing expectations of citizens so these are some of
the things that we're thinking about in new zealand and some of the solutions
that were working on in New Zealand. To finish where i started underpinning
everything all of this and propelling it forward is that spirit of service. Our
first and last responsibility as public service leaders is to support, protect and
nurture that spirit in the people who give expression to it every day, every week
they deserve that from us and they also deserve a public service system that
enables the spirit of service to be translated into better services and better
outcomes. The better services and better outcomes that they are so very very
motivated to deliver.
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