If a member who used to use your credit card to purchase all of his airline travel suddenly stopped, would someone from your credit union call him to ask why?
“You should,” says John Best, CEO of Best Innovation Group, a CUNA consulting partner. That relationship likely generates more income than an auto loan.
This is one example of how credit unions can use data analytics, says Best, who addressed the co-located CUNA Technology Council and CUNA Operations & Member Experience Council conference Wednesday in Phoenix.
A true data analytics program requires corralling your data, storing it a data warehouse, and having access to tools that allow you sort and use the data, Best says
But beyond having the right tools, credit unions need to have a data-driven culture. That involves taking seven steps:
1. Stop making assumptions. Prove everything with data.
2. Use data, not intuition or gut feelings, to improve processes or make changes.
“It’s hard to do,” Best says. “We spend a lot of time in this industry using our gut feelings. It’s time to change that. With that, we’ll have increased accountability.”
3. Scenario planning. Data analytics allows credit unions to use predictive data when scenario planning instead of looking at what has already happened.
4. Using data to support all staff communications.
5. Using data to determine deadlines. “If we’re data-driven, we can be date-driven,” Best says.
6. Using data analytics to assess risk. “That’s our sole job; what we do for loans,” Best says. “We should use data to assess technology risks, too. Risk is fine as long as we plan for it and assess it.”
7. Using dashboards to monitor progress.
Creating a data-driven culture allows you to challenge long-held assumptions, Best says, such as the idea that only 25% of members use branches.
“You hear this a lot, but is that really true? Even if it’s conventional wisdom for the industry, is it true for your credit union? We’re all different,” he says.
“Being data-driven is a cultural thing used to challenge assumptions and conventional wisdom—and not have it be a bad thing.”
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Bill Merrick is deputy editor of Credit Union Magazine. Follow him on Twitter via @CUMagazine.