Bringing Together the Credit Union Heart and Head with Data

During a recent webinar, How to Utilize Data to Build Strong Member Relationships, my co-presenter Anne Legg of Thrive Strategic Services said something that struck me.

She spoke of bringing together the “heart and the head” of a credit union.

Credit unions are financial institutions with heart. Being mission-driven, they strive to do right by their members. That has become what credit unions are known for, and it has been evident this year in particular.

A member-centric approach leads with heart. But all heart, and no head isn’t a sustainable strategy amidst the financial industry’s major digital transformation. Applying the science of data analytics to a members-first mindset is the marriage of head and heart that is needed to succeed.

Understanding the Fundamental Member Problems

Anne noted that what drives a heart-centered approach is understanding the four fundamental problems that bring people to credit unions. Those are:

1. Transportation: “I need a car.”
2. Shelter: “I need a home.”
3. Travel and play: “I want experiences.”
4. Rainy day and retirement. “I need help saving for short and long-term goals.”

Notice that no one is waking up in the middle of the night thinking “I need an auto loan or mortgage.” So, even when you understand members’ common pain points, there is still more work needed to effectively reach with them. Connecting in the right way around the right solutions requires a more complex view

Generating those needed in-depth insights and meaningful interactions isn’t going to happen through in-person interactions (at least not to a significant degree). With fewer members than ever conducting financial business in-branch, credit unions need to harness modern methods to understand what message, through what channel, and at what time they should be engaging members.

Companies Are Using Data to Make People Love Them – And So Should Credit Unions

It’s not an overstatement to say that data has helped companies like Amazon and Netflix build empires. Big Tech companies are on the leading edge of data analytics, but it’s no longer their exclusive playground. Fintech companies continue to make data analytics adoption more accessible, and mission-driven credit unions can and should follow tech companies’ lead.

Entities that are most successfully creating the ultimate customer experiences are constantly synthesizing their data to deliver highly personalized service. It will only grow more difficult for credit unions to remain competitive if they don’t keep up with these trends. Member-centric service today means deeply analyzing behavioral data and understanding how to act on it.

Only about 5% of credit unions are actively managing their data today. And while their attention is elsewhere, technology companies are making moves into the financial space. Apple, Google, Amazon, Facebook and even Uber are eyeing the financial services market. If credit unions wait to act until they see members starting to leave, it will be too late.

You Have Enough Data Right Now

Not long ago, I spoke with an executive at a smaller credit union that wasn’t sure if they had enough data to implement a really effective analytics program. In the course of our conversation, we determined that his members averaged around 7-8 transactions per month.

Just by applying simple math, that translates into 28,000 transactions every month, and more than 330,000 transactions each year. That is assuming static behavior, when in reality, members’ digital footprints are growing all the time. Even this small credit union has a sizeable amount of data from which extract meaningful insights and formulate much more sophisticated strategies. The idea that you don’t have enough data doesn’t match up to reality – don’t let it be an excuse for not getting started.

Analytics isn’t a shiny new thing anymore. It’s a necessary tool that will enable credit unions to continue serving their members with heart as the field gets more competitive. With a “smart heart,” they will connect with members, differentiate from the competition, and prosper in the changing landscape  

Karan Bhalla is the CEO of CUES Supplier member CU Rise Analytics, Vienna, Virginia.