BY SCOTT MCCLYMONDS
What is member portfolio management? If the term conjures up images of old-school analytics, then you’re getting it all wrong. The scope of member portfolio management goes wider and deeper into a credit union, ultimately resulting in an uptick in profitability. Learn how to leverage it to your CU’s advantage.
In the last two issues of this column I have covered the approaches of Doug Fecher and Steve Hennigan in serving moderate income Americans and the cultural changes their credit unions are undergoing to accommodate their new direction. I’d like to take a different focus in this issue and speak with you about something I call member portfolio management.
If you have attended any credit union conferences in the last few years, you know the cousin of member portfolio management, also referred to as big data or analytics.
In fairness to CEOs, executive teams and boards, the people who sell and make presentations on big data and analytics have made these topics as hard to understand as trying to take apart the transmission of my F150 and put it back together. In other words, it’s either way too esoteric to make any practical sense, or it’s so detailed that executives’ eyes glaze over.
Actually, I don’t even use the terms “big data” or “analytics” anymore. I cringe when I’m asked to speak on “big data.” Those are words used either to sell software or do tactical campaign management, and that’s not what we’re about here.
What Is Member Portfolio Management?
So what is member portfolio management? Member portfolio management breaks the entire membership of your credit union into critical, digestible parts so you can build appropriate strategies for each member group.
Just think about your loan portfolio for a minute. It has different risks, maturities and ALM concerns. Similarly, your members have different attrition risks, profitability levels, revenue mixes, demographics, levels of financial health, preferences and life events.