There’s no escaping the increasing reliance on advanced data analytics. Your credit union’s data is a critical asset you have that can anticipate member needs and allow you to execute personalized interactions.

How do you make a data analytics strategy work for you even more in the coming year?What do you need to include in your 2020 initiatives?

How do you plan a strategy that delivers insights that can be turned into tangible business outcomes – insights that help you increase your credit union’s performance and drive greater efficiencies?

Most failed data analytics strategies can be traced back to the fundamental error of focusing solely on the technology and not the credit union’s vision, mission and strategic goals.  As you plan for your 2020 Data Analytics Program, consider these key action plans to ensure a successful data analytics strategy and outcome:

1. Identify organizational strategic priorities and align the technology solution accordingly.
2. Establish a data warehouse to centralize data integrated from several applications.
3. Identify and plan for tangible and measurable use cases.

Business Objectives, Strategy and Technology Alignment:


Too often, executive teams have an unclear strategic direction with regards to their data analytics investments and how they align with their corporate objectives. In these cases, I recommend that the team take a step back and work on clarifying the overall strategic direction and outlook. Without this direction as a guide, the credit union’s technology decisions end up driving the overall strategic direction instead of the strategy driving the technology.

Your data strategy and strategic priorities should include:

  • A strategy defining your how analytics will help drive the credit union’s strategic priorities
  • A tactical roadmap describing how you will accomplish the analytics goals outlined
  • Plans, tactics, and processes to develop analytics skills and create a data-driven culture that embraces the daily use of data analytics

Clearly understand and outline the long-term strategic goals of the credit union (i.e. growth, branching, new products and services, etc.) to identify and select data analytics solutions that fit your requirements both today and, more importantly, where you want to be in the future. Otherwise, you run the risk of a costly blind spot: investing in software that doesn’t fit the credit union’s vision, and the cost of converting later can be significant.

Implement a Data Warehouse:

The foundation for a successful analytics program is data. But, without accurate and quality data, it’s nearly impossible to make informed business decisions. As data becomes an even greater asset for the credit union, the ability to store large amounts of complex data in a unified, central database, known as a data warehouse, is critical.  This single source of truth is the repository for all the data that has been collected and integrated from multiple sources across the organization. Everyone in the credit union is using the same data derived from the same source, which leads to quick, easy access to accurate data and better decision-making.

Measure and Monitor Success:

Tracking and measuring the ROI of an analytics program allows the credit union to re-prioritize goals and take corrective action steps along the way. By measuring the action taken from the data’s prescriptive recommendations, the credit union can focus efforts on the most promising and revenue-driving opportunities, resulting in an immediate boost to earnings and member service and resources. Once key data segments are identified, efforts should be focused on the campaigns that delivered the greatest ROI and devise a set of recurring best practices for future campaigns.

Some tangible and measurable data analytics use cases The Knowlton Group clients have experienced include:

 Effective Marketing and Segmentation:

Deeper, data-driven member insights are critical to tackling challenges like improving member conversion rates, personalizing campaigns to increase revenue, predicting and avoiding member churn, and lowering member acquisition costs. Deploying member segmentation such as geographic, demographic, behavioral and other categories will help your organization target the right products and services and help reduce member churn. Using data analytics, you can successfully segment your members data, and invest more resources into those members who are most likely to respond to your product offerings.  You can then further refine your messaging and product/service offering to retain their loyalty.

 Enhance Member Experience:

Analytics also has the potential to identify the needs of new and existing members, so the credit union can effectively match the best products for them. For example, the credit union can use call center contact information, new member questionnaires and other behavioral attributes to predict what type of products would be the best fit for a new and existing member.  By matching members with the right products and services, the member is less likely to have complaints or start looking for better services elsewhere.

Elevate Efficiency:

Advanced data analytics provides credit unions with intelligence to make better, faster and smarter decisions. This knowledge leads to reducing duplicative systems, manual reconciliation tasks and redundant information technology costs.

 Improve Analysis of Transaction Data:

Your members’ transaction data is a goldmine of information and opportunity.  Deploying transaction categorization and classifications allows for the combining of ACH, Debit Card, and Credit Card transactions into a single view.  You get clean and standardized merchant information to gain the most value out of the data.  And you can identify where your members are spending their money and to which competitors’ payments are being made.  By categorizing member data into tiers, you have the greatest opportunity for deep analysis of transaction behavior.

Refine Member Engagement

Utilizing a member engagement analytics model, the credit union can assign an engagement score to each member based on all member activity.  It will enable you to separate members into defined segments based on their engagement and can create recommended action to take for each segment so you can continuously improve member engagement scores.

 The Right Guidance Leads to Success

Looking for help with developing your data strategy and plan for analytics?  The Knowlton Group is staffed by resources with both extensive technical analytics skills and decades of a line-of-business strategic leadership knowledge.  We work with many credit unions– helping them understand the full impact of data analytics to their business model, define a compelling data analytics strategy and ultimately provide results. From strategy, to conceptualization to full implementation, we are ready to make your credit union a data-driven organization. Contact us today.

For years, financial institutions have enjoyed the abundance of low-cost deposits. Today, we are in a new era of banking, with deposit acquisition becoming a significant point of focus for most credit unions.

The change represents another consequence of the Federal Reserve’s decision to raise short-term rates which influences the mortgage market, stocks and other corners of the economy. (1) Higher-rates available in money-market funds and other investments are luring consumers to move their money out of minimal interest-bearing accounts.

Adding to the challenge, the competition for acquiring new deposits is coming from not only big banks but from new digital players. In a rising rate environment coupled with a healthy economy, achieving deposit growth goals is one of the best ways to control funding costs while meeting the lending needs of members. Could data analytics be the game-changer to best understand member behavior and motivations to attract, win, and keep new deposits?

Here’s how you can maximize your member data for greater deposit growth:

Segment Your Existing Members

Member segmentation allows the credit union to divide specific target markets and member commonalities into more specific groups. By tracking and measuring important indicators in a member’s life – age, gender, marital status, income, a move, and more – you can segment members into easily targeted groups. This is important for optimizing marketing spend, effective reach and for acquiring deposits. Segmenting your members will help the credit union target the right member for the right deposit programs. Using data analytics, you can successfully segment your members’ data to create personalized, compelling marketing messages that are relevant and allow you to cater to your member’s needs—leading to potential deposit acquisition opportunities.

Create Member Acquisition Programs

Consumers have tons of options when it comes to financial services. Attracting their business requires smart, personalized marketing. Do you know which of your products consumers are more likely to use, or the segments which represent the strongest growth potential for your credit union? Through data analytics you can target the high-growth, high-opportunity member segments, create more relevant messages and product offers and promote your deposit services to the right prospective member, with the right message, at the right time.

Maximize Cross-sell Opportunities

I’ve mentioned before, the cost to acquire new members is ten times more than cross-selling/up-selling to existing members . Cross-selling deposit accounts to existing members is one of the best ways to grow core deposits. Through analytics you can gain a deep understanding of your existing members wants, needs, products and service offers and execute effective cross-selling initiatives. Data analytics helps you determine current product penetration and propensity by member as well as any gaps in products within your existing member-base. An analysis of existing member behavior can lead to efficient cross-sell of products. These efforts can drive an increase in member engagement while ensuring your credit union is maximizing all opportunities to promote high-interest yielding deposit accounts to your existing members.

Execute Retention Strategies to Keep Members

Controlling attrition is a top priority for credit unions. A change in address, marital status, or even a change in job status can lead to a member switching financial institutions. By using data analytics, credit unions can take proactive measures to understand and analyze the factors which might trigger thoughts of attrition in members. Using member data, credit unions can dramatically improve their ability to anticipate member behavior and key life events at an individualized basis. Data analytics is helping credit unions gain greater insights into their member’ needs, preferences and likely behaviors that lead to attrition. This valuable information enables the development of member loyalty strategies that strengthen the credit union’s ability to retain the members that are costly to attain.

Fine-Tune Marketing Messages

With the amount of the data now available, credit unions can create individual messaging to members and prospective members. This is a crucial factor for success in a time when deposit growth is critical. Analytics can empower the credit union to access extremely granular and detailed information on each member and allow marketing departments to send promotions on deposit services to each member segment based upon their specific needs and financial objectives. Emphasizing this personalized approach to marketing will allow members to feel a more personal connection with your credit union.

Deposits fuel revenue and the lending operations of the credit union. Without deposit growth, credit unions could face the challenge of reining in lending or pursuing more expensive funding.

Those credit unions that recognize the strategic importance to focus on deposit growth through data analytics will be the most successful in this competitive environment. Is your credit union looking for support to help maximize your member data? The Knowlton Group can help you devise a plan to put your member data to work.

1. The Biggest Banks Are Gobbling Up Deposits. Here’s Who’s Not. Wall Street Journal April 2108

If your credit union is seeking new ways to deliver exceptional member experiences that drive revenue and build loyalty, it’s time to put your member data to work. By 2020, Gartner predicts that more than 40 percent of all data analytics projects will relate to an aspect of the customer experience. (1)

Given how critical member satisfaction has become to credit union success, it’s important to understand just how deeply analytics can impact the member experience while boosting engagement. Making it a priority to improve member service now means using advanced analytics and insights to further add value and offer uncompromising service. Here are some insights into how your credit union can use member data to build long-term relationships, reduce attrition, and remain competitive.

Insight #1: Personalize for Maximum Engagement

Understanding the products and services that are right for your members is crucial during their life-cycle or journey. Without the proper data mining protocols in place, it’s impossible to provide a custom-tailored experience and accurately understand the services your members need.

Data allows your credit union to create the ultimate personalized experience, which is a key component to build loyalty. By leveraging a strong data and analytics competency, organizations can deliver the right product or service to the right member through the right channel(s) at the right time. This includes knowing: what channels your members prefer, how to best engage with them, what products do they need, and when do they need these products or services. Tapping into various data points allows you to find out these critical personal touch points that will appeal to your members while driving a higher ROI. As the credit union drills deeper using data discovery tools and analytic models to better understand the member’s purchasing habits, these insights provide the foundation from which further personalized member experiences can be made.

Insight #2: Gain a Single Member View

Data analytics allows credit unions to gain a holistic, 360-degree view of their members and gain a tremendous competitive advantage in earning loyalty. It allows the FI to offer products and services that members really want, instead of what we think they want. The key is having a centralized platform for all users that integrates everything from core, LOS, CRM, mobile activity, branch visits, social media engagement, and more. When your credit union has a single view of the member, you can dive deep into knowing member interests, purchasing trends, and communication preferences. All areas within the FI should have access to that same single-view so the member is engaged in a consistent manner. This single view of each member will help your FI answer a critical question: “Who are our most valuable and profitable members?”

Insight #3: Anticipate Their Next Move

Leveraging data analytics can help you seize opportunities today, but you also need to predict what your members need and want tomorrow (before the competition does!). Understanding your members and their expectations is crucial for delivering the best personalized experiences. Every experiential decision should be backed by data helping to refine messaging and increase conversions. Staying on top of member trends and at the forefront of members’ minds starts with understanding the audience inside and out. This means collecting incoming data across all campaigns, platforms, channels, and devices.

Final Thoughts

From identifying ways to improve member engagement to discovering member pain points to enhancing cross-sell opportunities, the possibilities for improving member service are endless when data analytics strategies and programs are deployed. Leveraging data can make all the difference in achieving the relationships credit unions are seeking to create with their members.

Are you capitalizing on these opportunities to improve member service and loyalty? At The Knowlton Group, we believe that every organization – no matter their size – can become data-driven. The best data and analytics program starts with a great strategy and clearly defined roadmap and implementation plan. Our personalized approach to each engagement ensures that the specific needs and goals of your credit union are captured for maximum results. Want to know how you can further improve your members’ experiences? Let’s talk. Contact me today at brewster@knowlton-group.com or call 860-593-7842.

Sources:
1. Gartner Group: The Member Experience in 2020