Improve Credit Union Operational Efficiency with Data and Analytics

TIBCO Credit Unions
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TIBCO Software recently sat down with Kirk Kordeleski to discuss how credit unions can leverage data to increase operational efficiency and improve the member experience. 

Kirk knows a thing or two about operational efficiency for credit unions. He’s currently an Executive Benefit Consultant at OM Financial Group, but before joining OM, Kirk served for 15 years as President and Chief Executive Officer of Bethpage Federal Credit Union. While there, Kirk was gratified to see Bethpage double its size every five years, growing from $950M to $6B. Kirk has also started two consulting firms specializing in credit union strategy, digital transformation, and data analytics. 

With a wealth of experience and demonstrable real-world success in using data analytics to grow credit union businesses, Kirk had several insightful comments to share.

Efficiency Impacts the Member Experience

In today’s competitive financial sector, a data-driven approach is crucial to understand and optimize the credit union member experience. Without data, your organization could miss valuable opportunities to achieve the level of operational efficiency required to smooth the member journey. 

What makes members dissatisfied with credit unions? Many times, the answer boils down to frustration with credit union inefficiencies. Sheila Shaffie, co-founder of ProcessArc, a consulting and training company focused on client experience and transformation, recently wrote for CUInsights

“It is imperative that leadership take a critical and deep analytical look at their operational efficiency, which drives expenses. It is only through this path that credit unions will be able to make a change in their operating procedures and processes to reduce cost and, in the process of making things more efficient, improve member experience.”

Achieving operational efficiency can contribute to a better member journey, which, in turn, leads to opportunities for revenue growth. The difficult part is figuring out where to start.

Areas of Focus for Data-Driven Efficiency

The first step is to get organizational buy-in for the goal of efficiency. How motivated is your credit union? If all your stakeholders are not aboard the efficiency train, your goals will quickly be derailed.

To ensure everyone is committed to operational efficiency, make the business outcome clear and relevant to each stakeholder. 

Make the efficiency case with your Chief Financial Officer (CFO) and finance team by illustrating how efficiency enables teams to do more without having to add members and supports better product pricing, better expense management and, ultimately, higher member value. For your quality control team, link it to better service metrics, improved analytics, and happier members. For your marketing team, link it to better member feedback on social media channels and more opportunities for building brand advocates.

Identifying and Addressing Opportunities for Improvement 

After you get buy-in for your efficiency objective, it’s time to find opportunities for improvement, which is only possible with high-quality data and highly focused analysis. Common areas of improvement to consider include:

  • Each member touchpoint, regardless of the channel used
  • Lending processes
  • Call center and in-branch member services 
  • Back-office operations
  • Collections
  • Credit cards and personal loans
  • Account opening and member onboarding

With so many areas to assess, it’s clear that you will need to analyze your data with a view to determining which areas to prioritize and when and how to do so.

Analysis That Delivers Operational Insights 

Where should you start with data analytics? Benchmarking comes first.

Benchmarking: Who, What, When, and How

External benchmarking involves comparing your metrics against competitors’ metrics. That exercise can reveal strengths and weaknesses, surfacing gaps in your competitor’s offerings that you can work to fill, thereby sharpening your competitive advantage.

Internal benchmarking helps you refine your operational efficiency goals. It can surface opportunities to play to your strengths and improve in weaker areas. And you will use your initial results to chart the progress you make toward improving efficiency. 

What should you measure? Follow the money. Typically, for a credit union, benchmarking should include:

  • Mortgage operations
  • Branch operations
  • Service 

Aim for at least monthly benchmarking to stay on track with your efficiency goals. Rigor is required. You should measure every department against service levels each month to ensure your actions align with stated objectives.

Ask the Right Questions

Use your data to answer important questions, such as:

  • What strategy should our credit union embrace to reach our efficiency goals?
  • What metrics should we track, and why?
  • Where are our largest potential opportunities to improve the member experience?
  • Where are our largest potential opportunities for business growth?

When evaluating operational efficiency at the department or individual level, ask:

  • What do throughput metrics tell us about this individual or department?
  • How is “performance” defined for this individual or department?
  • Which individuals or departments are performing well?
  • Where in the process are stated objectives breaking down?
  • Where are potential areas for automation?
  • Where are errors occurring?
  • Where are service bottlenecks?

Honest evaluation based on data is the key to creating a culture of operational efficiency. Perform evaluations at the department and individual levels. To bolster employee engagement, consider offering performance-based rewards such as bonuses or public acknowledgment of a job well done. Tie rewards to corporate strategy, peer or competitor comparisons, or personal achievement.

Data Needed for Analysis

For a holistic view of operational performance throughout your credit union, pull data from both internal and external sources. Essential data points include:

  • Loan processing data for originators, collectors, and servicers
  • Competitor performance metrics
  • Macroeconomic data 
  • Member surveys, net promoter score (NPS), and member complaints
  • Social media metrics and unstructured social media data

Efficient Operations Plus Smooth Member Journey: The TIBCO Advantage

To achieve operational efficiency that supports a positive member experience and promotes business growth, your credit union also needs the right data tools. These tools include data visualizations, intuitive dashboards, robust business intelligence, and data quality management. 

TIBCO is an industry leader in enterprise analytics and data management. Its solutions are driven by top-range technologies that unite disparate systems to deliver trusted, business-ready insights. Find out how TIBCO’s credit union solutions can provide critical support for your organization. 

Ask a TIBCO expert how TIBCO can help your credit union achieve data-driven operational gains. 

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Managing Director, Financial Services Solutions at TIBCO, leads the effort to develop market-leading enterprise data and analytics solutions for the global banking, capital markets, payments, credit union, and insurance industries. He is an accomplished executive with a long and successful track record starting up and leading technology, marketing, and sales programs that drive software and services revenue, growth, and profitability. Built on a strong foundation of product management, product development, and service delivery, Jon has directed multiple industry consortia uniting vendors and technology professionals to deliver commercial interoperability standards. He is an alumnus of the University of Southern California (USC) and Rutgers Business School.