The Decision Maker

Analytics Tools: Cultivating the “Data Wilderness”

Posted by Nate Wentzlaff on Jan 22, 2015 3:47:20 PM

The credit union industry is living in a wilderness of untamed data.  Cultivating this “data wilderness” will require a vast array of analytics tools.

Analytics Tools: Cultivating the "Data Wilderness"

Credit unions are in the middle of an information revolution.  As data becomes cheaper and easier to store, it is growing exponentially.  This phenomenon is known as Big Data, and it is creating a thick wilderness for credit unions to clear.  However, with the right mix of analytics tools and strategy this data growth can be leveraged.  By transforming the wilderness into a field, credit unions can plant an abundance of new products and services.  Similar to a farmer tilling his land, credit unions have the opportunity to leverage analytics tools to cultivate their data for a financial harvest.

Designing and Planning the “Data Field”

Planning how you will build your “data field” is the first step of any analytics program.  Before deciding what data to begin collecting and transforming into useful information, credit unions must design their field according to how they plan to utilize their data.  With an organizational strategy communicated by upper management, the blueprint for the “data field” can be designed.

Data as a Raw Material

Data is the raw material of the credit union industry.  Therefore, credit unions must treat data the same way a farmer would treat his soil.  Farmers must purify their soil and test its quality before allowing seeds to be planted.  In a similar fashion, credit unions must treat data as a raw material that must be cleaned and refined before allowing it to enter their analytics tools.

Cultivate with Analytics

Once the desired data has been collected and purified according to the design of the analytics program, analytics tools must be built (or purchased) to cultivate the data.  Identifying where to apply the analytics tools (e.g.  lending vs. marketing) will be determined using the organizational strategy developed by upper management.

Stocking the Credit Union Analytics Toolkit

Analytics tools are shaping the information revolution of the credit union industry.  Credit unions must have the right tools in their toolkit to solve the industry’s toughest problems.  Throughout the country, credit unions are currently developing tailored offerings to their members.  In order to keep close relationships with members, credit unions must leverage analytics tools.  Also, credit unions are constantly being bombarded with new regulations and business needs.  A plethora of analytics tools will give credit unions the support they need to prosper with their data assets.

Harvest the Insights

Analytics tools can bring deep insights to the employees of a credit union.  However, the real value is in the decisions made using these tools.  As employees become more comfortable using analytics, they will begin learning more about the underlying data of the credit union.  Acting on insights is crucial for a successful analytics program because employees have experience and knowledge about the business problems they need to solve each day.  Analytics tools are only as good as their users and will depend on how employees are trained to use them throughout their daily decision-making.

Continuous (Analytics) Improvement

The performance of analytics tools must be monitored.  As credit union employees begin relying more on their analytics tools, they will be able to give better feedback on how the analytics tools are performing.  For example, if one predictive analytics tool is constantly over-estimating loan originations for the next month, it can be re-programmed.  Analytics is more about people than technology.  The people who use analytics tools effectively will shape the future of the credit union industry.

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Topics: Data Integration, Data Analytics