The State of the Credit Union: Analytics Adoption – Part II

Jon M. Deutsch
June 20, 2018

In our last blog, we explored results from The National Survey on Credit Union Data Analytics and Decisioning Trends—and touched on their implications. In that survey, our friends and partners at Best Innovation Group (BIG) and OnApproach polled 85 credit unions in December 2017 to better understand Credit Union strategies for digital transformation, data analytics and data-enhanced decisioning. The results revealed that nearly half (45%) of respondents do not have a data strategy in place.

Equally concerning was the pace and urgency of implementing those data and analytic strategies. Most credit union investments will occur during the next 3 to 5 years (55%) and to a lesser extent during the next 1 to 2 years, 35%. This is far slower than large bank and fintech competition, as most of them have already implemented technologies and practices to monitor and anticipate customer needs, create new markets and products, improve speed of operations, and reduce cost and complexity.  

Cleansed and trusted data is a critical pre-requisite of this implementation to ensure the integrity of analytical results.  In addition to budget, staff, skills and culture, these competing institutions have learned that the biggest challenge to implementing a successful analytics strategy is the integration of data across disparate systems and worksheets, and the quality of that data.  According to BIG, CUSOs (Credit Union Service Organizations) can help even the smallest credit unions manage these data and analytic challenges by sharing the necessary skills, technology and risk.

Looking forward, the implementation and experience gained from the successful implementation of an analytics platform opens the door to machine learning and artificial intelligence.  At machine speeds, these methods customize offers, pricing and experiences to deliver a relevant and satisfying customer experience by applying the financial institution’s own business rules and models with current and historical data, and industry benchmarks.  Most credit unions are not preparing, or prepared to think about these key areas of investment in future competitiveness, threatening to widen the competitive gap still further.

The good news is that these hurdles can be overcome with assistance, increased urgency, and accelerated implementation as provided by Information Builders’ Accelerator for Credit Union Executive Operations.  Credit unions can begin to unlock the value of their data and position themselves to better compete with their larger counterparts and fintechs, today, while delivering an exceptional member experience.

What kind of progress will credit unions have made in 1H 2018?  BIG and OnApproach will soon be fielding its next round of semi-annual surveys.  If you’d like to participate, contact us, or our partners.  Either way, we’ll be sure to share those insights with you.