Today’s credit union environment is dynamic, with abundant opportunities arising with new members lured by fewer fees, better interest rates, and intimate member-first experiences for which credit unions are known. Conversely, credit unions face competition from Tier 1 banks and an ever-growing pool of data-centric fintech players. It’s time for credit unions to fully embrace a data-driven strategy to remain competitive.
The Untapped Potential of Credit Union Analytics
According to the 2020 Credit Union Innovation Index, only 11 percent of credit unions have invested in data analytics innovations over the last three years, despite the fact that the financial services industry as a whole has accelerated digital transformation efforts considerably in that same period.
One of the factors that may be slowing the adoption of stronger data and analytics strategies is a lack of analytics technology specifically built for credit unions. Traditional enterprise solutions and pre-built tools are often not a good fit for credit unions. That lack may be partially responsible for the fact that, according to a survey by BIG Consulting, 65 percent of credit unions do not have a roadmap or strategy for using data analytics in their organization.
A data strategy offers two significant benefits. First, it is focused, which means the data team tends not to waste time, energy, and resources collecting unnecessary data. Second, it reveals quick wins that can easily be leveraged to solve critical problems and make challenging goals more attainable.
Benefits of Credit Union Data and Analytics
Some of the benefits of a data-centric credit union include:
- Strengthening member relationships: Analytics yield deeper insights into member needs and preferences, enabling credit unions to create personalized experiences and build greater satisfaction.
- Improving market segmentation: Data analytics goes beyond basic demographics to reveal more nuanced patterns for more accurate market segmentation. Analytics can model critical trends in member behavior and fuel highly-personalized and targeted marketing campaigns.
- Reducing fraud: Advanced analytics can spot suspicious activity faster and more accurately, enabling credit unions to take proactive action and manage risk.
- Building competitive advantage: The wealth of insights generated by analytics lead to increased efficiency, effective marketing, and reduced risk—building a competitive advantage.
How to Leverage Credit Union Analytics
Below are three notable success factors for getting your data analytics strategy quickly off the ground.
Build the Right Team
The success of your data analytics program hinges on the resources and skills available. A top-level manager or executive championing the cause demonstrates a commitment to analytics and motivates the rest of the staff to collaboratively contribute, making the program a success.
Create a Solid Process
The credit union data analytics journey is typically segmented into four stages:
- Strategic planning: In this stage, the team presents, organizes, and prioritizes its ideas on the analytics and data necessary to achieve strategic objectives and business outcomes (identified by leadership) and discusses what is needed to execute the program.
- Developing a platform: This step entails selecting and assembling the resources required for successful execution. Requirements include people, processes, hardware, software, and data access.
- Cultivating penetration: With the right plan and platform in place, the next stage involves accelerating adoption by integrating data from relevant sources, using ideal data analytics tools to derive the prioritized insights, and demonstrating the value of these insights. People will be most receptive to analytics when the campaign actively displays the business, financial, and operational value that analytics brings.
- Establishing controls: Finally, develop observations and measures that will keep your analytics program aligned with strategic objectives, performing as expected, and helping measure workability and impact.
No credit union analytics program can succeed without a robust implementation process that considers these four stages.
Invest in the Right Tools
A data analytics initiative is only as good as the hardware and software tools it uses. Proper data management tools integrate data from all relevant sources within and beyond your credit union, regardless of their disparities, and deliver insights that reveal the full, accurate picture for effective decision-making. Robust data solutions also offer optimum levels of safety, quality, and accessibility, ensuring all systems and staff members get the data they need when they need it.It’s time for credit unions to fully embrace a data-driven strategy to remain competitive. Click To Tweet
To learn more about the significance of analytics in credit unions and how TIBCO’s purpose-built credit union analytics solutions can reinforce your data strategy, download the ebook: How Credit Unions Achieve Profitable Growth with Data and Analytics today.