Credit unions, like all financial institutions, are deep in the era of digitization. There’s been a key trend of moving traditional banking activities online, which generates lots and lots of data. The sum of this online financial activity creates a detailed picture of the behavioral patterns of members.
Credit unions are growing in their acknowledgement of the importance of leveraging this data, but are falling behind other financial institutions in maximizing the opportunities. According to a 2018 study by Best Innovation Group and Trellance, 45 percent of credit unions don’t currently have a data and analytics strategy in place, and those that do say it will take three to five years to implement.
Right now, within your data are the answers to many pressing strategic questions:
- Which products and services do my members truly want?
- What are our most valuable new business strategies?
- How can we respond to market challenges?
- How can we identify and minimize the biggest areas of risk?
Understanding how to dig deeply into your data to extract accurate insights seems complicated and time-consuming, and many credit unions fear they don’t have the resources or staff in place to manage the effort.
But, technological advances in computing power, artificial intelligence and machine learning mean that credit unions can efficiently and affordably recreate the power of an entire team of data scientists. Working with an expert analytics CUSO can level the playing field, enabling credit unions of all sizes to implement sophisticated, data-driven strategy quickly and without the need for in-house experts.
With the right analytics tools in place, there are three high-impact strategies your credit union can implement within a matter of months.
Design highly-targeted intelligent marketing campaigns
Marketing messages are constant, and everyone’s time is short. Personalized, relevant offers are one of the best ways to capture members’ limited attention – and show that you understand their needs.
Older marketing methods use demographic information as a primary means of customization –but, that assumes that people of the same gender, geography or age group all want the same things. The new era of data analytics allows for hyper-personalized targeting based on product adoption, level of engagement and life stages. This means the ability to efficiently focus resources on higher quality efforts. Credit unions that use data-driven marketing report deeper relationships, more effective cross-selling, and stronger customer loyalty.
Identify your next best products – for each member
Predictive analytics is an exciting area of data science that uses sophisticated machine learning algorithms to make predictions about the future. Predictive models are able to capture the hidden relationships among many factors and assess the likelihood of a potential outcome.
CU Rise’s Next Best Product predictive analytics models drill deep into individual member behaviors to gain insights about which products and services are most likely to be adopted. It’s the foundation upon which to build perfectly targeted marketing offers that reach the right member at just the right time.
Retain more members
The predictive analytics “magic” that gives insights for increased wallet share can also tell credit unions which members are in danger of leaving. This isn’t merely a forecasting tool, but powerful, actionable data that provides the opportunity for proactive outreach before it’s too late. Attrition models like the one offered by CU Rise allow for targeted and specific re-engagement campaigns that significantly reduce attrition rates and strengthen relationships with members.
The more credit unions embrace digitization, the more new opportunities for growth it provides. Credit unions must actively participate in the digital transformation in order to not just survive – but thrive – in the rapidly changing financial services landscape. Leveraging the power of data and analytics is the logical next step.
Karan Bhalla is the CEO of CU Rise Analytics, a Virginia-based CUSO. CU Rise helps credit unions that want to focus their time and resources on the most advantageous strategies by fully leveraging the possibilities of data analytics and technology. Request a free, customized benchmarking report to see how your credit union’s performance compares against other financial institution’s at www.cu-rise.com/peer-benchmarking-report