The Decision Maker

Data Insights – Back to the Basics

Posted by Merrill Albert on Oct 8, 2019 12:51:00 PM

Many people are talking about data insights, or data analytics, without exactly knowing what they mean. They’ve heard that the company will benefit but don’t know how to get there. They might try to “throw money at it” and hire talented Data Scientists hoping they will magically get results, but that’s not the way it works.

Getting the right results all starts with what you do with your data. You collect data on your members based on their business activities. Now you must apply mathematical techniques to this data to obtain analytics. You then apply business knowledge to your analytics to gain insights. These insights will ideally provide you with information about your business that will allow you to act. For example, it might be an insight around payment trends that can help you work with members before there are problems, or it might be an insight into something new happening in the industry that you have to react to.

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Topics: Reporting and Analytics, Data Visualization

Manage Your Vendors to Protect Your Brand

Posted by Jeff Johnson on Sep 5, 2019 10:54:00 AM

As the web of vendors to credit unions becomes more complex – core vendors, digital banking vendors, credit/debit card processors, Loan Origination System (LOS) providers, IT vendors, consultants, loyalty programs, legal services, and the list goes on – vendor management has become a necessary core competency. However, most credit unions don’t have the time, resources and/or expertise to manage their vendors properly. At many credit unions, the problem goes much deeper. With no contract life-cycle management in place, auto-renew contracts continue, sometimes in perpetuity. There is a lack of awareness of the risks of not managing vendor contracts. 

Without formal vendor management, a credit union lacks awareness of who their key suppliers are, where they are spending their money, and ensuring that their third-party vendors remain compliant with Federal and State regulations. In addition, vendor management will ensure that the third-party vendor continues to protect and secure the credit union‘s data and that of its members, whether on-premises or outsourced, reviewing annual reports and ensuring the vendor is compliant with the SSAE 18 / SOC 2 Report and Payment Card Industry Data Security Standard (PCI DSS), for example.

It’s hard for a credit union to ignore its vendors. They are critical to success, and most times, are at the heart of the organization’s processes and activities. Although invisible to members when everything is going well, failure on the part of a vendor is a direct reflection on the credit union.

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Topics: Strategic Partnerships, Data-Driven, Vendor Management

Three Factors for Success with Credit Union Data Analytics

Posted by Mitch Nelson on Aug 28, 2019 11:52:00 AM

The credit union industry looks very different now than it did twenty years ago. Just think about what credit unions will look like twenty years from now. Where does the journey for the next twenty years start? Twenty years ago, it would have been hard to imagine remote deposit capture, peer-to-peer payments, or even mobile banking. It is equally hard to imagine what banking will look like twenty years from now. However, one thing is certain: the trend of digital transformation will continue. For many credit unions, data analytics will play a big role in that.

Credit unions don’t necessarily need data analytics programs. However, credit unions that leverage their data remain better-positioned to provide individualized member experiences, remain in compliance, or identify attriting members—and that’s just the tip of the iceberg. It all comes down to the basic idea that knowledge is power. And data provides that  knowledge. As credit unions continue to consolidate and disappear, those that are strongest come out ahead and leveraging data is a competitive advantage. Here are some basic success factors.

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Topics: Data Integration, Data Analytics

The Failure of Nokia: A Lesson about Credit Union Data

Posted by Lou Grilli on Aug 14, 2019 10:02:00 AM

Credit unions have a great deal of data on their members - how much they earn, where they spend their money, how much their house is worth. Credit unions now have access to more data than they ever had before. But most fail to leverage that data, and this should be a big concern.

The corporate landscape is littered with companies that couldn’t see or refused to see, changes in their customers’ expectations. For example, Nokia was once the most popular mobile phone provider, dominating the market. However, the company relied on its reputation, which was stellar initially, and in its belief that it knew what the consumer wanted. The problem is that many consumers don’t know that they want something until they see it. Apple, on the other hand, introduced a phone without a keyboard in 2007, something Nokia refused to do until several years after the introduction of the iPhone.

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Topics: Big Data, Branch, Disruption

Are Credit Unions Missing Out On a Growth Opportunity?

Posted by Ann Farrell on Aug 6, 2019 11:52:00 AM

Credit unions see an average of 7% year-over-year growth in their credit card portfolio revenue. That’s not bad, but it’s also not great. The issue isn’t necessarily that credit unions don’t have strategies in place to increase their card portfolio. They do. There are marketing initiatives, competitive rates, rewards features, and so much more. Nevertheless, more can be done. And, if you want your credit union to capture top-of-wallet revenue, more has to be done. The following five strategies are tried and true, and have helped over a hundred credit unions grow their credit card portfolios by an average of 19% per year. Fair warning: these are easier said than done.

Credit Line Increases

On average, about 60% of a credit union’s cardholder accounts qualify for a credit increase. If you haven’t run a credit line increase in a few years, that percentage is even higher. That presents a lot of opportunity!

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Topics: Business Intelligence, Credit Unions, Membership, Lending

Why Loan Analytics are Key to Your Credit Union's Profitability

Posted by Dan Price on Jul 30, 2019 11:51:00 AM

One of the most common questions I hear thrown around is, “what is the purpose of analytics?” It’s a great question, but that’s because the answer isn’t as straightforward as it might seem.

The purpose of analytics is to solve complex problems with many variables. Analytics provide a multifaceted view of data sets. Each different view of those data sets gives a slightly different understanding of the data.

However, that answer doesn’t specify which data is being used, or for what. Here’s why that matters:

The Purpose of Analytics Changes Depending per Application

Different business units will use analytics differently. In credit unions, you may have marketers, compliance teams, loan officers, and many more all looking to get something different from an analytics solution.

In that sense, there is no exact purpose of analytics. The purpose is decided by the people who require, gather, work with, and utilize data.

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Topics: Business Intelligence, Data-Driven, Lending

The Credit Union Data Analytics Journey: 4 Steps to Success

Posted by Cassidy Cochrum on Jul 23, 2019 12:07:49 PM

Data analytics is no longer available only to massive technology corporations and big banks. In fact, with access to enough data, even smaller credit unions can join the fun. With several data analytics platforms that are accessible and affordable, credit unions of nearly any size can start taking advantage of integrated access to data. Plus, it’s surprisingly easy to start your own credit union data analytics journey.

At first, it might seem outlandish. Can you really keep up with the Amazons, Googles, Netflixes, and Facebooks of the world? Maybe not at their global level, but in many cases, credit unions have more data about each individual member than Amazon has about each of its customers. Well, sort of. But you can definitely catch up to the Wells Fargos and the JP Morgan Chases out there.

So, how does it happen? How does it all start?

Step One: Find a Project

If you want to establish your own credit union data analytics program, your first step is to find a project. Your project can’t be vague! It’s not enough to choose “use analytics” or “become more data-driven” as a goal. Analytics itself isn’t a goal—it’s the tool you use to accomplish one.

When you choose a goal or project, choose one that addresses a need at your credit union. Some examples that credit unions have had success with are:

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Topics: Business Intelligence, Data-Driven

Do You Know Where Your Report Data Is? Security for Your PCI Reports

Posted by Lou Grilli on Jul 16, 2019 11:56:00 AM

A typical credit union downloads its report bundles, daily from its processors. Usually the only option is to store those highly sensitive PCI report bundles on a network drive, with some level of appropriate user access controls. The reports contain 16 digit card number, transaction-level details, and PII of credit union members. However, the network drive is not in a PCI compliant environment. Does this sound familiar? More importantly, do you know where your processor reports are being stored?

More and more Board of Directors and Auditors are getting involved in this area of security and asking pertinent questions regarding storage of information. Even if you do not believe that a data breach is a possibility (which is a false sense of security) this is still not the proper way to store and secure your reports.

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Topics: Reporting and Analytics, Security

Data: The Key to a Successful Card Portfolio

Posted by Ann Farrell on Jun 25, 2019 1:17:41 PM

Understanding your members’ behavior gives you the opportunity to serve them effectively, and in turn, increases your bottom line. Unfortunately, it is not uncommon for credit unions to overlook existing cardholders as a significant opportunity to help stimulate portfolio growth and increase profitability. With the use of data, you can identify trends that will help you to ensure that you are offering the right incentives, rewards, and services that will not only retain your existing cardholders, but also attract new prospects.

What can data do for you?

Data can open the door to product and service opportunities that your credit union did not offer in the past. Also, by utilizing data from your card portfolios, as well as home and auto loan applications, you will have a vivid picture of each member that will help you to create unique member experiences. In the end, you can feel confident that you are offering a competitive card product and doing what is required to stay “top of wallet.” With rich data you can:  

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Topics: Marketing, Membership, Data-Driven, Lending

Why Using Data to Understand Membership Trends is Important

Posted by Stephanie Hainje on Jun 20, 2019 1:28:10 PM

Many credit unions are struggling to retain members and capture the wave of increased credit union membership the industry is experiencing despite paying out a record level of membership dividends, helping members affected by the government shut down earlier this year, maintaining lower rates and fees, and providing stellar member experience.

5M new members joined credit unions Y/Y September 2017 to September 2018, but why aren’t consumers flocking to more credit unions in larger numbers? There are nearly 5,000 credit unions with assets of $500M or less, and some think these are the most vulnerable credit unions who may not survive to serve their membership.  Year over year, credit unions with less than $50M in assets (58% of all U.S. credit unions) have reported negative membership growth, while the top 552 credit unions with assets above $500M have experienced strong membership growth.

If your credit union membership isn’t growing, dig in and determine why. How many new memberships were opened in 2018 versus the number of closed memberships?  There is a lot you can do with your membership trends from data you already have. You can:

  1. Identify your most profitable members and apply strategies to shift low profitable members to highly profitable.
  2. Examine the behavior of long term members. What are your member acquisition products? What other products and services have been added throughout their membership? How many products and services do long term members have with your credit union? Are members using the digital products you offer?
  3. Analyze member attrition over the last 3-5 years and create predictive models to decrease member attrition. What segment of membership has the highest attrition? Do they have similar products? What products do long term members have that short-term members do not? What is the average length of membership and what do you want it to be? Does a change in address to a zip-code more than 25 miles from your credit union trigger a closed membership?

Additionally, credit unions need an internal membership champion who is continuously focused on membership numbers.  Do your employees know how many members you have?  Do they know what your membership growth goals are?  You have one, right?  Have employees been trained on how to retain a member and informed of the conversations to have at account opening, and throughout a membership life-cycle to continue developing member relationships?

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Topics: Reporting and Analytics, Membership, Data-Driven