Dipping your toe into the waters of data analytics does not have to involve a major investment, says payments guru John Best.
Best, CEO of Best Innovation Group, a CUNA consulting partner, addressed the CUNA CFO Council Conference Tuesday in Orlando.
One of the most important—and most easily trackable—pieces of data credit unions maintain is member credit and debit card use. Just as importantly, credit unions earn vital noninterest income off card use.
A key payments trend is the increasing use of cards for apps and recurring charges for outlets such as Starbucks, Netflix, Amazon, and iTunes. The average iTunes account holder, for example, spends $65 per month, while the average Amazon Prime account holder spends $100 per month.
“Your members are not using your cards” for these recurring charges, Best says. “This is death by a thousand cuts. We have to reverse that trend. Top of app is the new top of wallet.”
The most common assumption is that credit union members are using cards from big issuers to get points and rewards.
Members typically contact their credit union for a payoff on an auto loan, Best says, but not when they use another credit card. “Over a lifetime, that credit card is more valuable to you than that car loan,” he says.
There are ways to encourage members to use credit union cards for recurring purchases, Best says. For example, when members enroll in services such as Netflix or Hulu—data that credit unions can easily track—credit unions offer to pay for the first month if members use a credit union card.
Credit unions also can offer to pay for the first months of online subscriptions to video games and software.
Members nearly always embrace these offers, Best says.
“These kinds of notifications build trust,” Best says. “They offer us an opportunity to show why credit unions are better.”
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