Data Is the New Oil

Sponsored by FIS

Two of the most frequent questions I hear from credit unions are: “How often do our members go to a particular large retailer?” and “How can we learn more about our members from their transaction behaviors?” Seems simple enough, but it usually sets off a long-winded explanation about how complicated it really is. Regardless, it is so essential to be using the enormous cache of data that your organization has at its disposal in order to create the best possible experience for members. Credit unions that can use their data efficiently can solve complex problems by using insights from retailer frequency and transaction information. Here are three key thoughts to help you with this.

1. You can learn from your data and prevent or minimize attrition.

Credit cards are sometimes reported to have a 10-15% natural attrition rate. That means if you’re not growing by that much, you are losing market share. That’s a large attrition rate, now more than ever with all the competition out there, but what if you could reduce it? With dramatic shifts in consumer behaviors comes the opportunity to learn. Just as natural attrition has key learnings, so does event-based attrition that is caused by market shocks. Data helps credit unions invest in the right technology for their members while finding ways to attract new members. If you have the right combination of data, tools and partnerships, your business can continue to thrive and achieve new heights.

Consumers will still make essential purchases and critical payments, but you likely don’t know how their buying needs have changed until you examine the data. Until they shift patterns, transfer cards or close their accounts, you won’t really know, and it may be too late unless you have the right toolkit. Maybe the decision to change credit unions happened this year when they realized you didn’t have the digital offerings that they need during the pandemic or maybe they were not aware of all your digital offerings. Maybe you have world-class digital products, but your members aren’t 100% familiar with them. You had the data to save the member but not the analysis and tools to see what they wanted early enough. Perhaps you lacked real-time data-driven tools that enable immediate action so you could make the member feel safe with relevant and engaging messages assuring that you were still with them through this crazy year. Regardless, using data and learning from the insights gained from it can help both membersand your credit union, especially during the current pandemic.

2. Timely and relevant member engagement is key.

The truth is that we see precursors in the data all the time. Maybe it’s a high user of debit that starts to show a decline, someone who starts closing secondary accounts, a person that makes a balance transfer on a credit card, or the loss of a direct deposit. The critical point is that you need to be able to act on what your data is telling you. The market standard has raised the bar and your member’s expectations are very high.

The key is timely, relevant engagement. Having the tools to see the data, identify trends, and take near real-time action. Sometimes all that’s needed is an outreach that sparks a friendly conversation. This can be an opportunity to strengthen the relationship, show you care, and find that member’s specific need so you can deliver a personalized and timely solution. In both hardships and good times, data can be a tremendous tool to help break the ice and build relationships. Whether it’s a difficult and unique circumstance or a simple lack of incentives, your credit union can help its member weather the storm.

To do so you need an ecosystem of data, tools and processes that can help you connect and make a difference in your members’ lives. The value of engaging in real-time actions that carry strong word-of-mouth and create a competitive differentiator cannot be understated. Now more than ever, it’s critical to adapt to new trends that face your institution and your member base using data-driven insights. Become a crucial part of their financial success and well-being and they will be a life-long part of yours.

3. Credit unions need more than business intelligence.

First, integrating machine learning is a must. Your members want to know more than what happened, they want to know why something happened and what is going to happen next. Data science techniques like attribution and predictive analytics must be seamlessly integrated into modern business intelligence systems. The interface needs to be humanlike and real-time. Natural language processing, or human language query, is a critical component; NLP is not just a feature but the future. Real-time solutions are changing the data integration landscape and business intelligence must follow that lead.

I have heard the phrase, “Data is the new oil,” numerous times since the introduction of automation and robotic process automation solutions. In fact, your organization can be sitting on a “well” of data just waiting to be examined. The organizations that can use their data to create a personalized, creative member experience can market themselves as industry front runners. The credit unions that do this will establish their brand as centered around innovation and creativity, while most importantly, delivering a personalized experience for members.

Tim Nargassans leads the data solutions group at CUES Supplier member FIS.