By Mike Scott
For many credit unions, widely available industry data is the primary source of information for forecasting, scheduling, and other important management activities.
Metrics from the institution itself are perceived as being too inaccessible or difficult to use in a meaningful way, so collection and analysis efforts often falter.
While collecting, analyzing, and using internal metrics isn’t a simple task, this highly focused information is invaluable. It’s simply not possible for a credit union to generate accurate forecasts and make decisions based on them without analyzing data unique to the institution and its branches.
Even from one branch to another, location-specific variables such as large employers’ pay schedules, daily or weekly traffic jams, and other factors come into play.
Where's the data?
Although many credit unions are familiar with industry statistics such as national mortgage, credit card, and business loan growth, as well as NCUA call reports, they miss the productivity metrics inside their own branches.
Some of the most powerful information you can gather is captured by the credit union’s core processor. This data includes the time stamp of the transaction, transaction type, and the employee performing the transaction.
Individually, this information isn’t valuable. However, if you record this data, you can chart it and over time see the patterns that should be leading your forecasting efforts.
Find the patterns
Once you begin collecting core processor data, whether manually or with the help of a third-party provider, your first step should be to build transaction trend charts.
What times of day are the most and least active? Do these volumes vary by week or month? What transaction types are most common, and when?
These trend charts can help you determine exact times during the week when there’s an abundance of idle time on the teller line. You can also combine transaction details with payroll data to determine your labor cost per transaction.
A new approach
With this data in hand, you can schedule employees more effectively. This will decrease your payroll during slow times and ensure sufficient coverage when you’re busy.
The result will be not only lower labor costs per transaction but also increased customer satisfaction.
Of course, such a project can seem overwhelming to many credit unions, especially those with a weak or nonexistent production reporting system in place.
Indeed, setting up such a system without dedicated software is challenging and will require a realistic, long-term resource commitment. It's also crucial to have buy-in from your branches to collect and input the data (or deliver it to the designated entry person).
If you decide the effort is too much to manage, there are software solutions that can automate the process of collecting, analyzing, and reporting on these metrics.
Such solutions will help pinpoint cases of excessive labor cost per transaction, generate monthly productivity reports, provide peer-to-peer ranking reports that allow you to compare your metrics with other banks and credit unions, and more.
MIKE SCOTT is president of Financial Management Solutions Inc. (FMSI) in Atlanta. Established in 1990, FMSI provides easy-to-use, yet sophisticated, business intelligence systems that allow financial institutions to manage and staff to meet their service and sales needs. For more information, call 877-887-3022.