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They also facilitate growth and faster and better decision-making.
By now, it’s well documented that the last few years have drastically changed the way businesses and consumers interact. Credit unions and member relationships are no exception. The recent digital transformation has secured its place in the lives of consumers, and the need for credit unions to reach consumers where they are is more important than ever.
Credit unions need the right data and insights to reach both current and potential members with the right product and offerings at the right time, while also being empowered to make real-time decisions with confidence. Advanced analytics are a game-changer for credit unions looking to leverage the power of data to optimize their outreach and customer retention while driving business growth.
Data Is Key for Strategy and Real-Time Decisioning
The path to reaching consumers begins with data. Data helps identify market opportunities, measure the success of outreach initiatives, provide real-time insights and refine strategy for optimal results. A spray-and-pray approach to customer acquisition and retention and to reaching consumers with products and services will ultimately result in disappointing results.
Credit unions need to be able to dissect and digest information so they can quickly make informed and effective decisions that both reduce risk and meet member expectations. To do this, credit unions need rapid access to a plethora of data and analytical tools.
The best data and tools will help credit unions save time and money by identifying the consumers with the greatest need for certain products and services so credit unions can allocate only the resources necessary to reach them. Armed with data and advanced analytics, credit unions can identify enhanced opportunities through the customer lifecycle, from acquisition to account management, and cultivate stronger relationships with members by offering products that make sense for their members while maximizing profitability.
It’s important to keep in mind that the digital ecosystem has changed consumer expectations. Consumers are accustomed to quick and frictionless experiences in an on-demand environment. Competitors are also looking to capitalize on the enhanced access to potential customers, so the ability to make confident real-time decisions is crucial.
Additionally, the same advanced credit risk modeling tools that help credit unions make lending decisions for new members also help identify existing members who may be financially at risk. This gives credit unions the opportunity to intervene before a member has a late or missed payment. Such intervention can be a relationship-builder and lead to the sharing of positive word-of-mouth experiences that result in more customers down the line.
Expanded Data Unlocks Opportunities for Credit Unions and Consumers
More than 100 million consumers in the United States are either unable to secure credit via mainstream models or at an affordable rate, according to our research with Oliver Wyman. These consumers are either credit invisible, unscorable, or credit that’s subprime or below. However, this does not necessarily correlate to an unwillingness to pay and establish good credit. In fact, many of these consumers are making on-time monthly payments, including rent and utility payments.
The research shows that using expanded data sets that include these on-time payments and advanced analytics in the decisioning process can improve access to credit for nearly 50 million credit invisible and unscorable consumers, as well as millions of consumers considered subprime. Credit unions have the opportunity not only to bring millions of underserved consumers into the credit ecosystem, but also to use data and insights to match consumers with offers that meet their needs and drive more opportunity.
Reaching consumers with the right products and services begins with leveraging in-depth data and insights. As credit unions continue to adapt to the digital environment and members’ needs and expectations, advanced analytics play a crucial role in helping identify more growth opportunities and to make better and faster decisions.
Klaudette Christensen is EVP/chief product officer for Experian Consumer Information Services, with responsibility for functions including strategy, product management, marketing and analytics. Before this appointment, she served as chief operating officer for Experian Marketing Services in North America where she was responsible for the marketing lifecycle of a consumer through business-to-business and business-to-consumer solutions, which includes revenue growth, product management and development, product innovation, strategy, and demand generation to meet our clients’ and consumers’ current and emerging needs.
Christensen joined Experian in May 2010 and has undertaken various leadership roles, including growth initiatives for consumer information services, Experian partner solutions, data breach, and direct-to-consumer divisions. She has over 20 years of product management, sales, account management, marketing and operations experience across a variety of industries and functions. Before joining Experian, she led business development and marketing efforts for Prosper Marketplace, Merrill Lynch and E-LOAN.
