Careful contingency planning and watching shifts and trends can help firms be prepared for challenges, Velera CEO Chuck Fagan writes in a new PYMNTS eBook, “Beyond the Horizon: How to Identify Unexpected Threats That Could Impact Your Business.”
The past four years have shown us that industry leaders should always keep an eye out for the unexpected. However, it should also remind us that with a bit of flexibility and resilience, no headwinds are too strong to navigate — including a global pandemic, tumultuous election cycles and the economic uncertainties that followed. In fact, sometimes these unprecedented events can yield positive momentum and opportunities for innovation.
The 2024 presidential election is obviously top-of-mind when it comes to unpredictability. To date, this election cycle has proven to be even more irregular and tumultuous than previous. It also goes without saying — of course — that those within the payments and credit union industries, like Velera, are perpetually in-tune with the political climate and policy changes that present an impact to our business, partners and consumers. Regardless of the results of this year’s election, Velera is already preparing for policies and initiatives that could be influenced by the next administration, including fluctuations in inflation, interest rates and more.
Specifically, Velera has kept a close eye on potential Regulation II (Durbin Amendment) changes and the resulting impacts it will have on credit unions and other financial institutions. While this regulatory change is targeted toward debit issuers with assets over $10 billion, it will hit the least affluent consumers the hardest. The Durbin Amendment takes critical resources away from smaller financial institutions, including some of the credit unions we serve, whose revenues were heavily impacted by this ruling. As a result, these smaller institutions were forced to offset their interchange revenue losses by raising other fees that now fall to the consumer. As the election cycle unfolds, Velera will continue to engage with legislators to advocate for the best interests of our credit unions and our industry, voicing our collective opposition to these proposed changes.
The threat of cybersecurity incidents, which have the potential to compromise the data privacy of our credit unions and their members, is also top-of-mind at Velera. The recent CrowdStrike incident and ripple effect it had across the financial services, healthcare and transportation industries — among others — is a stark reminder that technology can open organizations up to a certain level of vulnerability. This recent incident proves just how important it is to have the right protocols, tools and processes in place if unexpected vulnerabilities arise, be that from technology glitches or cybersecurity and fraud concerns.
While uncertainty will always remain present in the payments and credit union industries, careful contingency planning and keeping a pulse on shifts and trends can help organizations be best prepared to overcome any challenges they face. With the right tools and protocols in place, along with a willingness to be flexible and resilient, organizations can be well positioned to navigate the remainder of 2024 and enter next year ready to succeed.
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