Credit Union Giant Taps VAR For Authentication Technology

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In the banking industry, it's all about compliance and security. In fact, ensuring that it was keeping step with the latest requirements proved to be an increasingly full-time job for Forum Credit Union, one of the largest credit unions in the country. So the credit union turned to technology partner Allied Solutions to find a workable technology solution to help it adhere to the latest requirements for online banking and safeguard its employees as well.

Forum Credit Union, headquartered in Fishers, Ind., was founded by employees of Indiana Bell Telephone in 1941. The company holds $980 million in assets, placing it among the three largest credit unions in the United States. Forum has 240 employees in more than 11 branches nationwide and serves 88,000 members.

"Our membership and assets continue to grow over time," says Carol Minges, director of technology services at Forum. "We've been in a growth phase for the whole time we've been a credit union, but particularly in the last five years."

The company has strong IT support from its 34-employee Forum Solutions subsidiary, which specializes in helping financial institutions use technology wisely. Forum tapped its reseller partner, Allied Solutions, because it was confident that Allied could bring it up to date on the latest security technologies.

"Last year, with identity-theft breaches and all the ID-theft compromises in the news, we've really been trying to focus on security solutions for clients," says Traci Mottweiler, product support manager at Allied Solutions, which has dual headquarters in Carmel, Ind., and Plano, Texas. Founded 26 years ago, the solution provider offers its banking customers a unique combination of insurance and marketing vehicles, as well as technology products to meet the needs of banks and credit unions.

"In the past, we've done more marketing and insurance," Mottweiler says. "Over the last two years, though, we've started to have more technology products." Today, the reseller offers a select number of handpicked products in different areas of technology, including loan-origination solutions, online-collateral tracking systems and online-quoting software.

A Winning Combination
Forum trusted that with Allied Solutions' insurance background and expertise in technology-based solutions, the solution provider could identify the products that would help the credit union adhere to new regulations and recommendations issued by a host of agencies.

"We have used Allied Solutions as our insurance provider for a long time," Minges says. "In the financial services environment, we need to make sure member data is secure, so when they introduced us to the BioPassword concept, we were interested."

In October 2005, five federal banking regulators under the umbrella of the Federal Financial Institutions Examination Council (FFIEC) umbrella--including the National Credit Union Administration (NCUA) and the Federal Deposit Insurance Corporation (FDIC)--issued guidance to banks and credit unions, recommending that these institutions deploy security measures to reliably authenticate online banking customers.

The latest regulations require that banks and credit unions increase the security of electronic banking systems to minimize account hijacking and identity theft.

"Financial institutions offering Internet-based products and services to their customers should use effective methods to authenticate the identity of customers using those products and services," according to a report titled, "Authentication in an Internet Banking Environment" from the FFIEC. "Account fraud and identity theft are frequently the result of single-factor (e.g., ID/password) authentication exploitation."

The guidance requires that banks assess the risks of their online banking operations and implement multifactor authentication, layered security or other controls reasonably calculated to mitigate those risks, the report stated. The deadline for compliance with the guidance was year-end 2006.

NEXT: Factoring in multifactor methods.