Mine your data
Once you’ve collected data, Simpson advises mining the data to find the information that hides within. You might be relying on ﬂawed intuition, and you might not be asking the right questions.
“Once you see the minorities of members producing the extreme majority of balances, debit card transactions, and fees, you’ll naturally want to know more about them,” Simpson says. “They will become a critical segment. You’ll see how they diﬀer from the majority of members. Ten you’ll want to know how to get—and keep—more like them.
“Look at the process you use to engage members,” he continues. “We want members to use us as their primary financial institution, so do they have a checking account? Typically, 30% to 40% of members do not. So that’s step one. Ten when they have a checking account, do they use it? We don’t achieve success by getting a lot of unused checking accounts.”
Simpson suggests oﬀering an incentive for members to choose your checking account, and walking them through the process.
“Provide an instant-issue debit card and then make sure it works by having an employee walk over with the member to use the ATM,” he says. Also, provide incentives for staﬀ who open accounts that are active, Simpson advises.
Focus on execution
Time matters when onboarding new members, says Chris Nicholas, chief analytics officer for CUNA Mutual Group’s AdvantEdge Analytics, a CUNA Strategic Services alliance provider. “This is where you start to collect the data and understand behaviors.”
But it’s not all about the data.
“It’s easy to become enamored with algorithms, analytics, and artificial intelligence,” Nicholas says. “But the ability to execute is key. Execution matters most. Test and learn. And measure.”
Measurement is critical to knowing if you should stop trying to convert an inactive member into one who is engaged. “Identifying a quick ‘no’ or a segment you can’t inﬂuence or help is as valuable as finding the segments you can,” Simpson says.
For credit unions that close dormant accounts, test tactics to restore them by measuring your results. Ask whether spending the money and eﬀort to revive 10 out of 1,000 accounts constitutes success.
What if your credit union doesn’t have the in-house resources to take a deep dive into data? AdvantEdge Analytics and OnApproach oﬀer potential solutions.
Through a secure, encrypted process of integration and translation, OnApproach leverages existing data—from the credit union’s core processor and from data pools—and employs a data scientist to provide solutions.
“We’re the Rosetta Stone of our credit unions’ data,” says Austin Wentzlaﬀ, OnApproach vice president of business development.
As credit unions grow, it becomes harder to provide a personal member experience. But ironically, data analysis might help credit unions to better know their members.
“What’s the cost of not doing it?” Wentzlaﬀ asks. “Becoming irrelevant.”