Posted: Jan 24, 2019
Comments: 0
Author: Lou Grilli

In keeping with the tradition started two years ago, where we score how well the Trellance team did on the previous year’s predictions, below is our report card for our 2018 predictions. For a look at what we thought was going to happen in 2018, read more here.

1.     Mike Chenderlin warned that 2018 would bring much more complex and evolved forms of fraud to credit unions, in the form of account take-overs, false account openings, and synthetic fraud.

Score: A

Any prediction that states that fraudsters will become more sophisticated is bound to be proven true. Credit unions are increasingly dealing with forms of fraud that easily transcends the typical counterfeiting, friendly fraud, lost/stolen cards, that we are all used to. One of the most crowded sessions at IMMERSION18, Trellance’s annual conference, was one conducted by PSECU and Visa to discuss a form of fraud called "card-cracking." And several sources, including CNBC,  Forbes and a study from the Aite Group all confirm that synthetic fraud is on the rise.


2.     Dave Chojnacki predicted an increase in the use of AI technology in consumer lending customer (member) interaction/retention, payments and fraud detection.

Score: C

AI was used as a buzzword in countless articles and credit-union-centric conferences. And there certainly have been advances in the use of AI for specific use cases such as scoring of card transactions in real-time. However, according to a recent study conducted by Best Innovation Group (BIG) and OnApproach, 45 percent of credit unions don’t currently have a strategy in place, and those that do say it will take three to five years for implementation. Trellance is a big believer that data analytics will drive business intelligence throughout the credit union industry to assist in loan decisioning, member segmentation, targeted offers, member retention programs, portfolio growth solutions, and many other use cases, but artificial intelligence was not a significant driver in 2018.


3.     Ann Farrell predicted that “Targeting millennials will begin to pay off.”

Score: B

Many credit unions have been working hard to put the infrastructure in place to appeal to a completely digital generation: online onboarding, mobile loan applications, improved apps with consumer card controls and P2P. The problem is that millennials have no money. While it sounds like a wild generalization (which it is), CNBC shared a study, that showed, “most “young millennials” —those between 18 and 24 years old — had less than $1,000 in their savings accounts. Nearly half had nothing saved at all. … Even “older millennials” — those between 25 and 34 — struggled to set aside money: 61 percent had less than $1,000 in their savings accounts and 41 percent had nothing at all.” Given this, spending money to attract millennials sounds like a bad investment. But the investment helped credit unions to remain competitive with online only and digital banks. So, targeting millennials may not have achieved its written intention, but it paid off in even more significant ways. 


4.     Lou Grilli predicted that cryptocurrencies would go mainstream.

Score: B

While all eyes were on the meteoric rise and fall of Bitcoin, two events positively impacted cryptocurrency and made it more palatable to mainstream users, while also making it more useful for its original intent – as a currency to make purchases. Early in 2018, Square announced that its wildly popular app, Square Cash, will add a feature to allow users to buy and sell bitcoin in the app. This allowed anyone to dabble in the world of cryptocurrency without the need for setting up a cumbersome cryptocurrency wallet or an account at an exchange. The second event was the creation of “stable coins.” One of the drawbacks to a merchant accepting cryptocurrency for purchase is the high volatility of the exchange rate of the digital coin to the US dollar (or any other fiat coin). Mid 2018 saw the creation of several crypto coins tied to a tangible asset. Tether claims it is tied 1 to 1 with the US dollar, by storing the equivalent assets in a reserve account. Eidoo is a cryptocurrency that sought to create a more stable token by tying it to the price of gold. While a consumer can’t spend these digital currencies in Walmart, they have become something that the common man can purchase, hold and sell.


5.     Stephanie Hainje set down two predictions.

 a)     “Credit Face-to-Face transactions will decline to nearly 50% / Debit Face-to-Face to decline to 60%, while e-Commerce will continue to grow.”

Score: B

E-commerce undeniably grew. According to Mastercard, U.S. e-commerce sales trotted off to a strong start just before Thanksgiving and rose 18.3 percent year-over-year in the period from November 1 through December 19. The other parts of the prediction are harder to confirm. According to the Federal Reserve’s 2018 Payment Systems Study Annual Supplement, the number of what the Fed calls remote payments using general-purpose payment cards grew 22.8%, more than triple the 7.2% increase claimed by in-person payments. The dollar value of remote payments rose 14.8%, also more than triple the 4.4% growth rate for in-person payments. At face value, this data shows the prediction did not come true. However, the Fed’s data lags, and we will not know the true picture of 2018 until mid-year when the results are updated.

b)    “Income from interchange on debit will decline in 2018.”

Score: C

Turning to the Fed again for data, the average interchange for debit signature transactions (referred to by the Fed as a dual message) increased from 50 cents in 2015 to 52 cents in 2018. This sounds like it contradicts the prediction. However, for debit PIN transactions (referred to by the Fed as a single message), the average interchange for these transactions declined, from 30 cents in 2013 down to 25 cents in 2018, a full nickel. One of the drivers of this trend is the increasing sophistication of merchant processors to steer PIN transactions to the network that costs them less. At the same time, the growth in the number of transactions and the average ticket size has continued to provide an increase in the revenue stream from interchange on debit. Interchange on debit did decline in 2018, as a percentage of the transaction, for some transactions. However, interchange, as a whole, did not.


6.     Finally, Shelly-Ann Wilson Henry gave us this prediction: “CU marketers will spend as much as 10% of their marketing budget to promote their brands via social media.”

Score: A

WebStrategies updated their Digital Marketing Budgets for Credit Unions in December 2018 with end-of-year stats including the statement: “the average credit union spends 10% of assets on marketing.” Another source, The Financial Brand, corroborated that by adding that marketing expenditures among America’s 7,000± credit unions are over $550 million annually - more than half a billion dollars. The top 100 credit unions spend over $400 million by themselves. Credit unions’ total annualized investments in marketing average at approximately 0.10% of assets.


While the Trellance team can’t perfectly predict the future, we successfully guide credit unions with growth strategies and expertise to realize profitability and success today and in the future. Visit us at or e-mail us at for more information.


Rate this article:
No rating
Lou Grilli

Lou GrilliLou Grilli

Lou is the AVP of Product Development & Thought Leadership at Trellance. In this role, he is responsible for managing the organization’s product portfolio, as well as providing leadership on industry trends related to data analytics and payments.

Other posts by Lou Grilli

Full biography , Contact author

Please login or register to post comments.


Featured Stories