Harness big data to grasp CU member behavior: Filene

December 7, 2015

MADISON, Wis. (12/7/15)--No matter the size of a credit union, it can and should leverage “big data” to help better serve members, drive growth and strengthen operations, a recent white paper from Filene Research Institute argues.

The paper, “Rightsizing Big Data for Credit Unions,” draws on in-depth interviews with four credit unions across North America that have harnessed data in an effort to improve their organizations.

Even for small financial institutions, “in the absence of better-informed decision making, credit unions will continue to face challenges in remaining relevant in a highly competitive financial services industry,” wrote the paper’s author, Linda Young, founder of ponderpickle, an innovation strategy firm.

Young says big data can reveal important trends in managing credit and operational risk, member behavior, segmenting members and wallet share for both new and existing members.

Westerra CU, Denver, for example, wanted to better understand the characteristics of different credit card holders so that it could provide more value. To do so, it partnered with a card processor to identify avid card users and learn the reasons for which members used their cards, among other trends.

By procuring this data, the credit union could then model rewards and rates that would be most beneficial to members; create a more dynamic profitability model for its credit card portfolio; and identify ways to migrate members with existing cards to cards with features better suited to their use.

“The analytical journey Westerra took to uncover meaningful benefits for its members will allow the credit union to realize increased card uptake and usage, making its cards ‘front of wallet’ for members,” Young said.