Fintechs, cyber-crooks, digital currencies, and new regulations all demand adaptive action from credit unions, says Fabiana Burkett, vice president, enterprise risk management, at $2.2 billion asset Orange County’s Credit Union in Santa Ana, Calif.

She discusses how to thrive and better serve members.

CUNA News: What are the biggest compliance and risk issues credit unions face? 

Fabiana Burkett: Cybercrime is one of the major risks credit unions are facing today. Cyberattacks, which are becoming more sophisticated and frequent, can be costly and seriously damaging to a credit union’s reputation. 

Implementing and maintaining robust cybersecurity programs will help prevent breaches and allow for quick response if incidents occur, mitigating the impact. 

Another concern is the fast advancement of digital technology, automation, artificial intelligence, and the evolving competitive landscape. Tech giants and other entities are starting to blur the definition of a financial institution. 

To continue to prosper, credit unions must innovate while staying true to our core values as member-owned cooperative financial institutions. Partnering with fintechs can be a solution. But vetting these companies well and evaluating the risks involved with such alliances—especially compliance risk—is key. 

Additionally, our current political environment has created a new regulatory climate, and the expectation is that regulatory burden on credit unions will continue to increase, especially around consumer protection laws. That will create higher compliance costs which, especially for smaller credit unions, directly threatens our ability to lend and operate. 

By tapping into resources like industry associations and networking with other credit unions and vendors, we can keep abreast of proposed legislation and advocate for credit unions. We must have a voice. 

Q: What future risks should be on credit unions’ radar?

A: Credit unions need to pay close attention to the developments around digital currency and decentralized finance. They have the potential to displace many traditional financial solutions by becoming easier to use, and they have bigger players adopting them. 

We need to acknowledge and understand this growing trend so our industry is not caught off guard. 

Great opportunities may arise from this potential shift in consumer preference. For example, credit unions may offer processing payment services or even make loans in a digital currency. 

Q: What's the most interesting part of your role?

A: I love creating and protecting enterprise value by managing risks and identifying business opportunities. I work with a wonderful team who shares this vision and commitment to Orange County’s Credit Union’s safety and soundness. 

I also get to interact with talented associates from different areas of the credit union daily. I appreciate that no two days are the same with multiple projects to keep things interesting.