Voice-controlled devices and other internet-enabled and artificial intelligence all feed another technology that is shaping today’s competitive landscape: big data.
In fact, the way big data is reshaping how consumers make choices is nothing less than a “digital revolution,” says Kirk Kordeleski, senior managing partner with Best Innovation Group.
“Buying stuff has evolved into that one-click model, of which Amazon is the greatest example,” Kordeleski says. “That model is fueled by massive amounts of usable data, and that data is now maturing to be used not only from a historical perspective but for decisioning processes as well.”
Anne Legg, director at AdvantEdge Analytics, a CUNA Strategic Services alliance provider, notes that between mobile devices, the internet of things, artificial intelligence, and big data analytics, credit unions can build lifestyle profiles of members.
Kordeleski provides an example. “I’m 61 years old, but I’m not a typical 61-year-old male as you may think of one,” he says. “I’m enthralled with digital and data life. I love the idea of robotics. I’m a different 61 than someone else.”
The challenge is accumulating all of the data sources and “normalizing” the information to make it actionable. “It’s about building a strategy and then producing metrics that reflect good, clean data you can make decisions with,” says Matthew Maguire, chief data officer at CO-OP Financial Services.
Legg says credit unions can leverage big data in three ways:
1. Descriptively. “This is the member’s current state,” Legg says. “Who they are, and where they’re sitting financially.”
2. Predictively. “This is where we can predict with a reasonable amount of accuracy what the consumer is going to need,” she says, “such as when the member will need a new car and when they have a bill to pay.”
3. Prescriptively. This is where you aim to build an experience based on the member’s current state and with the credit union’s ability to meet the member’s needs. “This is when I can predict your needs and give you what you need before you even need it. That’s how companies today are building loyalty,” Legg says.
Credit unions have one big advantage over virtually every competitor in the financial services industry. “They work from a position of trust,” Legg says.
She points to the Chicago Booth/Kellogg School Financial Trust Index, which reports the general public places more faith in credit unions than large banks by nearly 20%.
“Credit union members know their credit unions are going to do good by them,” Legg says. “They should use data to know members better and make their lives easier.”