Thanks to innovative application of data analytics, Mazuma Credit Union’s collections team can spot members in financial trouble several months before they know they need a hand.

And by proactively addressing that situation, the $490 million credit union in Kansas City, Mo., has been able to prevent delinquencies and charge-offs that can be costly to both the credit union and members alike.

It’s not always easy to tell members they’re in financial trouble, says Mazuma Chief Financial Officer Justin Mouzoukos, who worked with recovery leader Jay Broz to develop the approach. But often, members are happy the credit union is looking out for them, Mouzoukos says. “This reflects the credit union difference all the way.”

By cross-referencing credit scores and loan-to-value migration, Mazuma identifies members who appear to be experiencing financial difficulty. The credit union also has explored using debt-to-income ratio, but obtaining information cost-effectively has been problematic.

Mazuma approaches the targeted members with offers to consolidate debt and create plans that allow them to repair their financial condition.

“This is probably one of the more exciting ways analytics can be used at our credit union, because it directly affects our members and helps them preserve their financial health,” Mouzoukos says.

Meanwhile, Mazuma’s net interest margin has increased 15 basis points year-over-year.