The Decision Maker

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!

Read More

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.

Read More

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:

Read More

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.

Read More

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:  

Read More

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?

Read More

Topics: Reporting and Analytics, Membership, Data-Driven

Data Use Cases for Credit Unions: Chapter 2

Posted by Lou Grilli on Jun 6, 2019 10:09:00 AM

Getting Out from Behind The Curve

Chapter 1 of this series considered the importance in establishing a specific goal to solve using data analytics and proving the ROI in order to justify automation and decisioning using business intelligence in a credit union. Chapter 1 also highlighted two real use cases of success credit unions have had using data analytics to solve real-world problems. According to a recent study conducted by Best Innovation Group (BIG) and OnApproach (now Trellance), 45 percent of credit unions don’t currently have a strategy in place, and those that do have a strategy still say it will take three to five years to implement. Credit unions that aren’t making the most of data analytics today could be in even bigger trouble if an economic downturn occurs, as some economists are forecasting. “As we go forward there will be a significant performance difference between those that have invested and those that have not,” says Kirk Kordeleski, senior managing partner at BIG. “We think any downturn in the economy will highlight the advantage that data-oriented FIs will have over their competitors.”

How Much Will It Cost

The survey revealed that more than half of the 85 credit unions surveyed have budgets in place for data analytics. Of those, one-third plan to spend more than $200,000, the other two-thirds plan to spend between $50k to $200k. In addition, credit unions need to consider on-going costs. A rough rule of thumb is that a CU with $500 million in assets should budget between $150,000 and $300,000 per year for three years to cover software/hardware, analytic applications, and strategy. Smaller credit unions can find some savings by relying on a CUSO to provide the analytics and associated services.

The following paragraphs are real use cases that credit unions have shown to prove out their investments.

Read More

Topics: Business Intelligence, Credit Unions, Data

Cooperative Data Analytics Through a Semantic Layer

Posted by Nate Wentzlaff on May 30, 2019 11:04:00 AM

Credit Unions Need to Establish a Common Language to Strengthen the Credit Union Movement

On a recent trip to Malaysia, I was able to play basketball with my brother-in-law (my wife is Malaysian). As we began the game, I realized that we were all relying on a single source of truth for the rules of basketball.  Even though we are from very different parts of the globe, we were operating under the same definitions of the rules of basketball. Imagine if we all began playing according to sources of the truth that dictated different ways to play basketball. Maybe my source of truth told me that I don’t need to dribble to play the game. The other team’s source of the truth dictated that they can tackle the other team. This game would end horribly and would probably escalate into a conflict quickly. The same is true for data analytics within the credit union movement today.

Different Sources of Truth

Within most credit unions, there are many different sources of truth. Marketing departments have their sources, Accounting has theirs, and Lending has as many sources as types of loans (i.e. credit cards, mortgages, student loans, etc.). Over the course of time, every department begins establishing their own language based on their sources of truth, which are usually centered around a specific source system. For example, the marketing team has an MCIF system, which has an abundance of data regarding households and members’ profiles. The lending department relies on its loan origination system, which displays information found within a member’s loan application. All the while, the contact center relies on their CRM, which houses data collected during calls with members. When there is a need to work together to accomplish a goal, these various departments come to a meeting speaking different languages and using a separate understanding of the rules of the credit union. Like the game of basketball without a common source of truth, the project or initiative often ends horribly.

Read More

Topics: Data Integration, Semantic Layer, Collaboration

IMMERSION19 - Top 10 Takeaways

Posted by Erika Hill on May 23, 2019 11:52:00 AM

Trellance just concluded its annual conference, IMMERSION19, where ideas and strategies took the shape of keynote presentations, breakouts and networking among credit union professionals. As in past years, there were many key takeaways. Here are the top 10 takeaways from the keynote presentations.

60% of all data analytics endeavors fail.

Tom Davis, President & CEO of Trellance, shared a warning in his opening keynote that many data analytics efforts within organizations fail more than they succeed—and cost more money than expected. Tom urged credit unions to consider partnerships to advance their moves into big data.

Take big data and make it small.

Credit unions have more data about some of their members than what Amazon knows about its customers, according to Erik Qualman, an author recognized by Forbes and Fortune as one of the Top 100 Digital Influencers. Credit unions need to be using their collective data to customize the member experience according to each member’s unique needs. That’s taking big data and making it small.

Digital leaders are made, not born.

Eric Qualman also spoke about how, with advanced technologies, everyone can exert more direct and indirect influence than ever before and become an effective digital leader — anywhere at any time.

Disrupt or die.

Former IBM Chief Innovation Officer and best-selling author Linda Bernardi gave several examples of companies that didn’t see changes coming. Nokia, Motorola, Kodak, Blackberry, Toys R Us, were just some corporations that were blindsided by changes in consumer preferences and changes in technology. Linda suggested that companies have two choices – be the innovator or get pushed out of the way.

2019 AXFI Conference, June 9-12, Minneapolis MN

If someone is going to eat your lunch, it might as well be you.

Eric Qualman also shared the same cautionary message as Linda Bernardi regarding companies that need to innovate or be left behind. His perspective, though, was to not be afraid to disrupt your own organization. He gave the example that Netflix used to be in the business of mailing out discs; at its peak in 2002 Netflix was mailing around 190,000 discs per day. But the company also saw that streaming content was about to take off, so it created a streaming video product that cannibalized its own video-by-mail business, and upended Blockbuster’s market.

Read More

Topics: Collaboration, AXFI Conference, Disruption

Unlock the Data in your Reports

Posted by Lou Grilli on May 16, 2019 11:07:36 AM

Simple Steps To Make More Informed Decisions And Enhance Member Experience

There is a lot of buzz about big data and data analytics, but all the data in the world does no good unless it is utilized. Credit unions are behind retail and online companies in using data to make informed decisions. For example, if your forms, such as a HELOC application, do not have the fields for name, address, etc. already filled in for your members, that indicates that you are probably not using your data. You should already know this information about your members. Save them the hassle and give them the option of updating if necessary.

There’s so much more data than was available in the past that can be collected and used for purposes that can benefit the member. There are also better tools than previously available to aggregate the data to help decision makers. These two factors are bringing a wave of data analytics to credit unions. More importantly, it’s a matter of survival. Credit unions must take advantage of these opportunities to guide their sales initiatives. For example, the data can help you to decide who to target, like a new member who joined the credit union to access an auto loan, should be offered your credit union-branded credit card to maintain a sticky relationship. Or, who not to target for a specific product, like a member who already has your credit card but accessed a new loan, should not be sent another offer for the same credit card. Rich data helps you to determine who your target is for specific products and services, which helps to enhance your member experience.

Read More

Topics: Reporting and Analytics, Business Intelligence, Data Visualization