Fast Facts: Cybersecurity

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more. 

The financial services sector and private industry are increasingly targeted by complex cyber-attacks. Attacks can have potentially disastrous effects including theft of confidential data, damage to critical infrastructure, and denial of access to customers, shareholders, or investors.

FACT: The White House has recognized the importance and need for increased cyber defense and information sharing through both a policy directive and executive order signed February 12, 2013.

FACT: The financial industry has successfully withstood three waves of distributed denial of service (DDoS) attacks beginning in September 2012.

  • DDoS attacks involve a flood of electronic traffic from locations around the world to a website intended to slow down or disable an institutions site.
  • While DDoS attacks are not designed to steal confidential data or expose sensitive personal information, they inconvenience consumers and businesses attempting to access online services and could be leveraged as a distraction for more harmful attacks.

FACT: Information sharing remains one of the best defenses against cyber-attacks.

FACT: Establishing a system where the private and public sectors share and use timely threat intelligence will help America create a more capable and expansive cyber-defense network.

  • Protecting the privacy and security of customers is an industry priority. Information shared is limited to data needed to protect from and respond to cybersecurity attacks.

You can view all previous Fast Facts at www.RoundtableResearch.org.

Copyright © 2013 The Financial Services Roundtable, All rights reserved.

 

Fast Facts: Financial Literacy

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Below are some updated Fast Facts on Financial Literacy in honor of National Financial Literacy Month.

2004 was the first year the United States Senate officially designated April as National Financial Literacy Month, with the House following in 2005. The overarching goal is to teach Americans how to establish and maintain healthy financial habits and make informed financial decisions.

FACT: Research shows that financial curriculum can have a positive impact on how consumers manage their finances.

  • Financial education is likely to increase savings, use of banking services, home purchases and improvements in overall financial health.
  • Prudent use of insurance products protects financial assets, including the consumer’s most valuable asset – the ability to earn an income.

FACT: Even after the pain of the most recent financial crisis, few Americans are making wise financial decisions.

FACT: Through the Financial Literacy and Education Commission, the Federal Government has developed a national financial education website and hotline, compiling information from over 20 agencies.

  • Efforts include teaching materials provided by the FDIC, Department of the Treasury, Securities and Exchange Commission, and Department of Education.

FACT: The Financial Services Roundtable member companies have focused much of their community service initiatives on financial literacy, completing 42,320 financial literacy projects in 2012.

  • Projects served a broad base of consumers, including students, adults, service members, the elderly, and un-banked or under-banked Americans.
  • The vast majority of Roundtable companies are engaged with Junior Achievement USA, fostering financial literacy to 4.2 million US students annually.
  • A full listing of programs provided by our members is available on our website, in addition to a financial literacy roadmap with free resources and curriculum for K-12 education.

FACT: The Roundtable Scholarship Foundation established a financial literacy scholarship in 2011 to encourage high school students to participate in financial education courses before entering college.

  • 17 students received the award in 2012, an increase from 9 students the previous year.

 

You can view all previous Fast Facts at www.RoundtableResearch.org.

Copyright © 2013 The Financial Services Roundtable, All rights reserved.

Fast Facts: America Saves Week

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast Facts on America Saves Week, an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own saving status.

Each year since 2007, America Saves Week, coordinated by America Saves and the American Savings Education Council, has been an opportunity for many organizations to participate in the education of employees and consumers on the importance of personal savings.
FACT: The US savings rate has been steadily on the rise since September 2012, reaching 6.5% at the close of the year.

  • The savings rate was on a downward trend for 23 years until 2008, when consumers tightened their budgets in response to the recession.
  • The average savings rate from 2000-2007 was 2.8%.

FACT: The Consumer Federation of America’s annual savings report found that only half of Americans think they are prepared for the future or are saving for retirement.

  • The FDIC recommends planning for life events and emergencies early. An emergency savings fund of 3-6 month’s income is a good way to cover unforeseen events like job loss or car repairs.
  • The Principal Financial Group’s retirement readiness program projects workers need to save 11-15% of total income over the course of their career to maintain a desired standard of living.
  • When planning for retirement, learn what your social security benefits will be and use an online calculator to budget your savings each month.

FACT: Many employers offer automatic savings or retirement contribution plans. Participating in these programs may be the easiest way to save, with a percentage of income automatically invested or transferred to an account to compound interest.

FACT: By 2002, all states had developed Section 529 college savings plans to encourage saving for higher education. In 2011, the value invested in those accounts rose to $165 billion.

  • 529 plans can either be set up as savings plans to be used for various college expenses or a prepaid tuition plan, where savers can purchase units or credits at participating colleges for future tuition.
  • Investing in a 529 plan often provides tax benefits, but will reduce eligibility for need-based financial aid. If a child or beneficiary of these plans decides not to attend college, funds they remove from the account will be subject to tax.

You can view all previous Fast Facts at www.RoundtableResearch.orgCopyright © 2013 The Financial Services Roundtable, All rights reserved.

Fast Facts: Child Identity Theft

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast Facts on child identity theft as children may be an easy target for identity theft and often don’t discover it until years later when they apply for a job or attempt to take out a loan.

FACT: One in 40 households in the US with children under the age of ages 18 is affected by identity fraud.

FACT: 56% of child identity theft cases reported misuse of the child’s Social Security Number (SSN).

  • Thieves will often create a ‘synthetic identity’ using the child’s SSN and a different name, date of birth, and address, to obtain new bank or credit accounts for financial gain, or services such as utilities, phone, cellular, and Internet.
  • Children’s information is also used to commit non-financial identity theft, including obtaining fraudulent tax returns or government benefits, housing rental, employment, medical treatment, or evading criminal charges.

FACT: Lower income families are disproportionately affected by child identity fraud, with 50% of victims living in households with incomes under $35,000.

  • Of victims who were able to identify the perpetrators of these crimes, 36% found them to be family members, and an additional 35% were family friends.

FACT: Child identity fraud can be avoided. Check early and often.

  • Keep personal information like birth certificates and social security cards locked away and sensitive computer documents password protected. Use a cross-cut paper shredder before disposing of paper documents of this nature.
  • Teach children how to be safe online, particularly while visiting unsecured websites and using social media.

FACT: Federal law under the U.S. Fair Credit Reporting Act allows for the request of one free credit report per year.

  • If your child’s identity has been stolen, contact the three credit reporting agencies to place a fraud alert, and then file the theft claim with the Federal Trade Commission.
  • Because a child’s SSN is often used as part of a synthetic identity, ask each of the three major credit reporting agencies, Equifax (1-800-525-6285), Experian (1-888-397-3742) and TransUnion (childidtheft@transunion.com), for a manual search for your child’s credit report, based only on the child’s SSN.
  • Ask each agency for its mailing address, because you will need to provide a cover letter with proof that you are the child’s parent or legal guardian.
  • You may consider placing a credit freeze to prevent thieves from opening additional accounts under your child’s name.

For more information on how to combat child identity theft and learn preventative measures, visit the Identity Theft Assistance Center website.

 

Copyright © 2013 The Financial Services Roundtable, All rights reserved.

Fast Facts: Student Loans

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast Facts on student loans, which are  the largest form of consumer debt outside of home mortgages.

FACT:  More Americans are attending college at a time when college is getting more expensive.

  • Total college enrollment has increased 50% in the last 15 years.
  • College costs are increasing at double the rate of inflation.  Last year, tuition and fees grew 8.3% for in-state students at 4-year public schools, whereas the Consumer Price Index increased 3.6% between July 2010-July 2011.

FACT:  Many students borrow money to pay for a college degree.

FACT:  Student loans are now the largest form of consumer debt outside of home mortgages, eclipsing both auto loans and credit cards, according to the Federal Reserve Bank of New York.

FACT:  The vast majority of student loans are federal loans.

FACT: Private student loans often supplement federal borrowing to help families pay for the higher cost college of their choice.

FACT:  Private student loans have a significantly lower default rate than federal student loans.

FACT:  The federal government can recover defaulted student loans through administrative wage garnishment, offsetting federal tax refunds, and even part of Social Security checks.

  • In contrast, private lenders may not use these methods to collect on education loans.  Further, collections on private education loans are subject to statute of limitations; there is no statute of limitation on the collection of defaulted federal loans.

FACT:  Seventy-two percent of college students who graduated between 2006 and 2011 report that they have paid off one-quarter or more of their college loans, according to the Center for Workforce Development.

FACT:  On average, Americans with a college degree are twice as likely to be employed as the national average.

  • According to the U.S. Department of Labor, unemployment for those with a bachelor’s degree and higher is 3.9%, compared the national average of 7.8%.
  • An American with a bachelor’s degree can expect to earn more than $1 million more over their lifetime than someone who never went to college.

Copyright © 2013 The Financial Services Roundtable, All rights reserved.

 

Preventing Financial Exploitation Of The Elderly

The Financial Services Roundtable released its 2012 Fast Facts Book in September, which contains Fast Facts from January 2012 through July 2012. Fast Facts provides reliable, bullet-point research about issues facing the financial services industry. Below are a section of Fast Facts on preventing financial exploitation of the elderly.

By 2030, seniors will make up over one-sixth of the U.S. population. As our population grows older, it is essential to educate people about how to protect themselves from financial exploitation.

FACT: The annual financial loss for victims of elder abuse is around $2.9 billion, which is a 12% increase from 2008, according to a 2011 MetLife study of Elder Financial Abuse.

FACT: The elderly are a target for financial abuse because they may be more likely to depend on others for help, have predictable patterns, and have little understanding of modern management of finances. Additionally, they often have accumulated savings. Persons over the age of 50 control over 70% of the nation’s wealth, according to one survey.

FACT: Men and women of any race, economic level, or health status can become victims of elder financial abuse.

  • Women are twice as likely to become victims
  • Most victims are between the ages of 80 and 89
  • Most victims live alone and require help with health issues and home maintenance

FACT: The most common perpetrators of financial abuse are family members, who commit nearly 75% of crimes.

FACT: Signs of exploitation of the elderly include: unpaid bills, changes in banks or attorneys, changes in spending patterns, missing property, unfamiliar signatures, and a lack of personal amenities.

FACT: Many Roundtable member companies are coordinating to protect elderly customers from financial abuse. Examples include:

  • Capital One has partnered with the Consumer Action advocacy group to create MoneyWi$e. MoneyWi$e is a national personal financial education program offering free materials and community-based training opportunities on various topics including elder fraud, identity theft, and money management. In Canada, Capitol One partnered with SeniorBusters to raise awareness about the prevalence of elder abuse and fraud.
  • City National Bank has published various materials regarding elder abuse. Such materials include a facts bulletin regarding the actions and consequences of elder abuse, examples of common identity theft methods, and what to look for when elder financial abuse is suspected.
  • Comerica Bank provides publications on how to be aware of the signs of abuse and how the bank can help. They make an effort to partner with law enforcement to conduct community seminars open to all regarding various fraud topics. They have also created county taskforces to address the issues of elder abuse to provide a response plan for elder abuse and develop a network of contacts for the members.
  • Fifth Third Bank conducts a program which informs and offers protection from elder financial abuse. Fifth Third works regularly to protect assets, prevent losses, and safeguard information through customer interaction. By getting to know their customers, they are able to watch out for unusual activities. They also pay close attention when seniors come into a banking center for service by observing if they have someone with them, noticing if they seem uneasy, and noting if the transaction is unusual in nature. They will then take immediate action to safeguard the customer.
  • First Horizon is kicking off a program to prevent identity theft in their headquarters city of Memphis. In partnership with the Memphis Police Department, County Sheriff’s Office, and the District Attorney General’s Office, employees will make presentations at retirement communities and other groups regarding how to protect their finances. These presentations will also be made free to any organization interested in identity theft prevention.
  • Regions Financial is providing communication and instructor led training to all associates focusing on elder financial abuse prevention. By September 30, 2012, every Regions associate will complete training on how to prevent, detect and report elder financial abuse. Regions has a long standing commitment to elder protection efforts. Since 2003, Regions has invested in the Senior Housing Crime Prevention Foundation, a nonprofit whose mission is to protect vulnerable seniors in housing facilities in various locations across our footprint and to provide ongoing crime prevention programs for senior housing residents.
  • The Principal Financial Group has provided grants to support WesleyLife Community Services’ Money Management program since 2007. This no-cost program promotes independent living for low to moderate income older adults and persons with disabilities who are at risk of victimization because they cannot manage their own finances. WLCS-Money Management program curriculum was designed by AARP which provides training, evaluation and technical support. Nationally, this program helped 6,000 adults in 2010 with a 98% satisfaction with service rate.
  • Wells Fargo has developed training and informational content for distribution. This includes periodic articles which are distributed via internal channels. Additionally, their Regulatory Affairs group has coordinated and hosted regional Elder Financial Abuse Symposiums in various cities around the country. This group will also conduct ongoing meetings with regulars such as FINRA, SEC and State, and is in regular contact with State APS.

For additional resources and examples of member programs, visit http://www.fsround.org/fsr/financial_literacy/financial_literacy_corner.asp.

Satisfaction With Social Media Interaction

Guest post by Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates

Social media, a non-traditional method of customer interaction is clearly becoming increasingly important for banks to understand.

It’s no longer just a vehicle for customers to vent about poor experiences, praise their bank for exceeding expectations, or read about other customers’ positive or negative experiences—it has now become a legitimate service channel!

Social media sites not only allow customers to interact with their bank, but also provide another medium to converse with representatives, get questions answered, and resolve problems. For example, data from our 2012 J.D. Power and Associates US Credit Card Customer Satisfaction Study shows that during the past 12 months, 5% of credit card customers have contacted their issuer through their social media site to ask a question, resolve a problem, or make a request.

Although many questions or problems may need to be handled outside of the social media site that was the initial contact, it is important for banks to show they are listening to their customers’ “pain points” by providing an actual response to the social media posting.

Did you know that only 60% of customers who contacted their credit card issuer via social media received a reply?

Needles to say, the impact of replying to a posting on overall satisfaction is profound, as Interaction satisfaction among customers who have received a reply to their social media contact is notably higher than among those who did not receive a reply (802 vs. 748, respectively). Findings from our recent study also revealed that optimizing customer satisfaction with their social media experience does not end at merely responding to the request, but that issuers should continue to focus on the following:

  • Resolving the initial issue at hand
  • Offering additional assistance
  • Thanking the customer for their business

When each of these best practices are met, Interaction satisfaction increases to 839, which is 91 points higher than when they are not met.

Source: J.D. Power and Associates 2012 US Credit Card Satisfaction StudySM    

The Bottom Line:
With the continued advancement of technology shifting the way customers interact with financial institutions, it is vital for banks to proactively respond to the changing demands of their self-service channels and understand the importance of being responsive to feedback posted on social media sites.

 

Social Media Statistics: By-the-Numbers, September 2012

Below are some interesting statistics on social media usage. Feel free to share your favorite social media statistics in the comments section or Tweet @bankingdotcom.

  • 20: The percentage of US newspapers that now have online paywalls, twice the number that did one year ago. (Source: News & Tech)
  • 139: The number of Fortune 500 companies with a public-facing corporate blog in 2012, a five percent increase from 2011. (Source: UMass)
  • 24: The percentage of U.S.-based small businesses who claim to currently use social media in a “strategic and structured way.” (Source: eMarketer)
  • 63: The percentage of Pinterest users that are age 35 or older. (Source: Pingdom)
  • 129.7 million dollars in projected US mobile advertising revenue for Twitter in 2012. (Source eMarketer)
  • 235,000,000: The number of people who play games on Facebook each month. (Source: Facebook)
  • 65: The percentage of U.S. grocery retail executives who said they plan to use social media tools like Facebook and Twitter as part of their marketing arsenal within the next five years. (Source: eMarketer)

It’s no secret that smartphone growth is growing rapidly, but a Nielsen snapshot shows that teens and young adults lead growth in smartphone adoption. Read more here.

Social Media Statistics: By-the-Numbers, July 2012

It’s been a few months since we published a social media stats post, and there has been a lot of social activity this summer! Below are some interesting statistics on social media usage. Feel free to share your favorite social media statistics in the comments section or Tweet @bankingdotcom.

  • 250,000,000 The number of accounts that have upgraded to or signed up for a Google+ account (Source: Google)
  • 17: the percentage of cell phone owners who do most of their online browsing on their phone, rather than a computer or other device (Source: Pew Internet)
  • 3.6 billion dollars in gross revenue is projected by the end of 2012 for video sharing platform YouTube (Source: Citi)
  • 52: the percentage of all cell phone owners who use their phones while watching television (Source: Pew Internet)
  • 18: the percentage of teens who would stop communicating altogether if their favorite technological channel of communication disappeared (Source: AWeber)
  • 7.56: the average percentage of traffic to Facebook Pages from external referrals (Source: PageLever)
  • 41.7: the percentage of the top 10,000 websites that have some form of Twitter link on their homepage (Source: Pingdom)
  • 36.6 billion online content videos were viewed by US Internet users in May 2012 (Source: comScore)
  • 152,000,000: the number unique US visitors to Facebook.com in May 2012, placing the social network in second place behind Google (Source: Nielsen)

Curious if LinkedIn Groups are useful? Here are some tips on how marketers can benefit from participating in LinkedIn Groups.

Key Banking Topics in Social Media

*Guest post by Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates

The challenges confronting banks that seek to bolster their bottom-line profitability, retain customers, and stay competitive in the marketplace are formidable. Research conducted by J.D. Power‘s Consumer Insight and Strategies Group to track social media activity regarding banking issues between April 2011 and March 2012 finds that:

  • Online sentiment was distinctly negative not only regarding fees, but also for bank technology
  • Complaints associated with website or online issues were a major source of discontent in technology-related messages

 

 

 

 

 

 

 

 

 

 

 

 

 

With customer feedback on critical topics discussed online going from technology to fees and service, banks should see the handwriting on the wall and provide an appropriate outlet for these customers, along with an acknowledgement and guidance for direction for immediate response.

Retail Banks aren’t the only ones that have an opportunity to engage with the vocal online customer. Credit card holders appear to be even more outspoken online, but card issuers appear to have learned this a bit faster than their Retail Banking peers.

  • 43% more credit card customers indicated that their financial institution responded to their online post than for Retail Bank customers (J.D. Power and Associates 2011 Credit Card Satisfaction Study). This may not be surprising, however, given the more virtual nature of interaction associated with credit card servicing.
  • Mobile apps for payments, online sites for daily transactions and much heavier reliance on phone-based rather than in-person interaction all combine to make the credit card environment more conducive to engaging the customer online.

Financial services, however, need to step up to the plate more and address the disgruntled customer. While these percentages are a step in the right direction, there is much more to be done to placate this online audience and turn the negative intensity and passion around.