The Decision Maker

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

Using Data to Create a Unique Member Experience

Posted by Erika Hill on May 7, 2019 10:59:00 AM

Enhancing member experience has been the subject of many blogs and white papers, and there is a reason why this topic is so popular. In fact, there are three good reasons why this topic is especially relevant now.

  1. Competition- Competition among financial institutions, challenger and online banks is getting fierce. Banks and online financial institutions like Marcus and Ally need your members’ deposits to fund their loan activity, and are offering higher returns for their business. Also, the huge credit card issuers want to put their cards in your members’ wallets, and are enticing them to do so with sign-up bonuses. Plus, every financial institution wants your best members’ loan activity on their income sheets.
  2. Technology– Technology has become affordable for credit unions of nearly any size. The technology to harvest data to drive decision making, segment your members, create targeted offers, and get a real-time view on each member, is much more accessible.
  3. Expectations- Your youngest members as well as the next generation that could become your newest members, demand a unique experience. They, like other customers (retail customers and e-commerce shoppers), all want a customized, digital experience. If it’s not fully digital, they want an experience that has some digital component. How do we create that experience?

The Answer is Technology

Of the three factors that make this topic especially relevant, technology is the one that drives everything else. Creating a personalized, positive experience that differs for each member relies heavily on data. This includes collecting, normalizing, and combining data from multiple sources to create a unique view of each member. This view is then used during the narrow window of opportunity you have while the member is in the branch, on the phone, in an online chat session, or engaged in online or mobile banking. This unique member-centric view is also used to determine which of your members should receive a special offer, which member should get fees waived, which members deserve bonus interest on money market accounts and other business decisions that help to enhance the member experience.

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Topics: Marketing, Membership, Data Analytics

Data Use Cases for Credit Unions: Chapter 1

Posted by Lou Grilli on Apr 29, 2019 11:53:00 AM

Data Use Cases is an ongoing series showcasing real use cases of success that credit unions have had using data analytics to solve real world problems. Data analytics was once the sole domain of giant tech companies – Amazon’s suggestions “If you bought that you might like this”; Facebook’s algorithms that determine which of your friend’s posts you most want to see on your timeline; Google’s ability to propagate data about you so that when you search for something like “hotels in San Francisco” you start seeing ads for restaurants in San Francisco on other sites. With the proliferation of data across multiple systems, the increase in computing power at a decreasing price, and tools to extract and harness data, the science of data analytics to create solutions to business problems, also known as business intelligence, is being increasingly used by credit unions to make better decisions. And it’s not just the biggest credit unions introducing business intelligence through data analytics to their staff. Credit unions with under $500 million in assets are realizing that use cases for data analytics drive ROI, better member experiences, and increased product penetration across their member base. Almost ironically, it is the smaller credit unions that absolutely need to embrace the use of data analytics – they are the ones that need to remain competitive or be merged out of existence.

Data Just For Data’s Sake – NOT!

It’s important to keep in mind that no company, regardless of what industry, invests in data analytics just for the technology. The cost of the tools, the hardware (or more commonly, the cost of cloud storage), investment in staff such as business analysts and possibly a data scientist, consulting services to help get started, can represent not just a significant up-front investment, but an on-going cost that must be justified. The justification comes in the form of use cases – individual examples of data-driven decision-making that makes a difference in how members are rewarded, or sold-to, or what products are offered, or just making a member feel more connected to their credit union through targeted, meaningful campaigns. In fact, for a credit union that’s just embarking on the data analytics journey, the best way to start is with the end in mind. Pick a single use case, a single vexing problem to solve, ideally one that has a fairly high payback if solved correctly. There are many articles that talk about the intangible benefits of business intelligence. But credit unions, especially their CFOs, want to see a return on their investment. The following paragraphs are a few real use cases that credit unions have shown to prove out their investments.

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Topics: Business Intelligence, Data Analytics, Data-Driven

The Death of the Branch: A Lesson About Credit Union Data

Posted by Austin Wentzlaff on Dec 14, 2018 11:01:00 AM

The way we think about credit union data these days doesn’t mesh with what’s actually happening in the industry. Credit unions now have access to more data than they ever have. Failure to leverage that data though? That’s where you should be concerned.

Let’s walk through an example: just over 20 years ago, Amazon entered the book retail market. Their mission was simple: deliver personalized experiences to its customers and make each interaction unique and customized to the individual.

At the time, Amazon was just one man, Jeff Bezos, selling books out of his home. For the book market retail giants, Amazon was hardly a threat, just some crazy guy trying to compete with very large and long-established institutions. Companies such as Barnes and Noble and Borders Books had well over a thousand retail locations and were selling books hand over fist.

Well, we all know how that story ends—Amazon is one of the top retailers in the world and Borders Books is now bankrupt and Barnes and Noble is struggling.

Failure to properly leverage credit union data may hurt as many branches as Amazon hurt bookstores. Basically, the outlook is grim. 

Declining Emphasis on Branches

In the past, credit union success was closely tied to the number of branches it could open. The more branches, the more members, the larger volumes of deposits and loans, and the greater the success of the credit union. All of this success is measured by credit union size rather than credit union data.

As we’ve seen in other industries such as Amazon versus the book market, this has started to change dramatically. The emphasis on the branch at credit unions has since gone away. Members are now looking to more convenient avenues to do their financial transactions.

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Topics: Credit Unions, Branch, Data Analytics

How Data Integration Helps Credit Union Analytics Platforms

Posted by CU 2.0 on Dec 11, 2018 10:59:00 AM

The immediate future of banking and the financial industry is in analytics. The ability to draw conclusions from massive sets of data helps financial institutions improve their advertisement targeting, their ability to underwrite loans, and a whole host of other things. One of the sticking points in the machinery is in credit unions’ ability to perform adequate data integration.

Data integration sounds relatively simple on its own. Data integration is the practice of combining multiple streams or forms of data into a single readable format. The extent of data integration needed increases as the amount of data—or the number of data sources—increases.

Why do Credit Unions Need Data Integration?

This will be a long answer, and so I’ll break it up into three parts. The first part will address the many sources of data that credit unions deal with on a daily basis. The second part will introduce the necessity of analytics platforms in finance. The third section will explain the role of credit union data integration in the grand scheme of things.

1.     Credit Unions Generate Lots of Data

Credit unions exist in the financial sector, which is technologically fast-moving. Partially because of this, and partially because credit unions must record financial and member data, credit unions are inundated with a massive amount of data daily.

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Topics: Data Integration, Data Analytics, Insight Platform

Summer Intern Perspective: Sports and Data Analytics

Posted by Nick Kerbeshian on Sep 25, 2018 11:10:00 AM

Being a summer intern here at OnApproach, I’ve had a different view on data analytics. It’s more than just looking at numbers and seeing trends. To be successful in data analytics, it is very important to have a clear vision and understanding of the industry that you are working in. From working in the industries of sports and credit unions I’ve found a commonality between them. The main goal between the two industries is to make the best decisions for their fans (sports), and members (credit unions). For both industries to achieve that, they need data analytics.

Money is not everything to most people, but it is possible that money is the most important asset that we need for our lives. The way you manage money will be a vital part of anyone’s life or business. I’ll take one of the biggest industries out there, sports, as an example.

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Topics: Data Analytics

5 Reasons You Need to Attend the 2018 Analytics and Financial Innovation (AXFI) Conference

Posted by Mark Portz on Apr 3, 2018 11:01:00 AM

Growing rapidly from only 28 attendees in 2014 to an expected attendance of well over 300 this year, the Analytics and Financial Innovation (AXFI) Conference consistently provides a unique forum for credit union collaboration and innovation. The 5th Annual AXFI Conference addresses not only the growing need to make analytics, innovation, and security top priorities for credit unions, but also provides tangible examples and hands-on workshops so credit union employees can walk away from the conference with a deeper understanding of how to move forward and achieve organizational goals. This conference is designed to be of interest to all levels of credit union management, C-Level, VPs, Managers and Technical Staff.

Here are 5 reasons you won’t want to miss the 2018 Analytics and Financial Innovation (AXFI) Conference:

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Topics: Data Analytics, AXFI Conference, FinTech, Innovation, Digital, Security

Bitcoin crosses $10k; Bezos’ Net Worth $100B – Why should we care?

Posted by Mark Portz and Austin Wentzlaff on Jan 9, 2018 11:07:00 AM

Please note: this article was started when Bitcoin crossed $10,000.Bitcoin is now at $18,000 (maybe even higher as you read this).

When thinking about Bitcoin and Amazon it might be easy for one to ignore the relevance to their own situation. What does a cryptocurrency and an online retailer have to do with me (or my institution)? The answer – everything. It isn’t about Bitcoin or Amazon per se, but rather what they stand for – The new digital world.

Digital Transformation is a term that is relatively new, but a term that is becoming increasingly more popular.  What it means, in short, and to be rather blunt, is that your old ways are broken and we need to reinvent using the new technologies available, namely the internet and mobile devices.

For many credit unions that have been very successful for many years, we are stuck in the old adage of “if it ain’t broke, don’t fix it.”  However, unfortunately, this old adage is just that – Old.  In the new digital age that we live in today, we have to constantly think about reinvention and transformation – not just every 5 years but every month.

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Topics: Data Analytics, Innovation, Digital

Making a Difference with Data at Our Community Credit Union

Posted by Mark Portz on Oct 19, 2017 12:23:10 PM

In the recent BIGcast, Analytics as The Fuel for Innovation – Implementing Analytics at OCCU, Andrew Bertrand, Data Analyst at Our Community Credit Union (OCCU) in Shelton Washington, discusses his role as a data analyst, getting started with data analytics, and data pooling for predictive analytics.

Getting Started with Analytics at OCCU

In the podcast, Andrew explains that prior to installing OnApproach M360 Enterprise, OCCU, a credit union with $360 Million in Assets, had an ODBC connection to their core system. It was a hassle to obtain data, and it didn’t meet the growing needs of a data-driven organization. Andrew realized that he could not possibly perform any predictive analytics without obtaining the history of member transactions.

After briefly (and in Andrew’s words, “foolishly”) considering to build their own data warehouse, Andrew decided it would be an inefficient use of time and resources. As John Best describes, for a financial institution to build their own data warehouse from scratch, is like building a “house of cards” as it has to be rebuilt repeatedly as elements are added and improvements are made.

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Topics: Data Analytics, Case Study, Podcast

A Day in the Life of a Data Analytics SVP: Making Use of Your Credit Union’s Data

Posted by Mark Portz on Aug 24, 2017 11:17:42 AM

If you are a credit union still waiting on the data analytics sidelines, you’re already too late. Data analytics is not a fad – it is a major opportunity for credit unions to gain deeper insights and improve decision making to create a strong and competitive future. However, it is not always clear where credit unions should begin. To help answer these questions, John Best recently spoke with Clay Yearsley, SVP of Data Analytics at Texas Trust Credit Union about getting started on the analytics journey, the skills needed, and the value of data in the podcast, “Catching a Unicorn – Discussing Data Analytics with Clay Yearsley”.

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Topics: Analytic Data Model, Data Analytics, Leadership, Podcast