Credit unions have a wealth of insightful information trapped inside their core and technology platforms. This has always been the case, but until recently, comprehensive views of the data were not readily available. Today, decision makers have access to tools that analyze data from disparate sources and provide summaries across multiple levels, from executive dashboards to drill-down detailed reporting.
Perhaps even more importantly, data is now available right away, offering insights into yesterday’s activities as opposed to last month’s. To properly leverage this goldmine, one must know what data to track, how to track it and how to react.
The first thing to understand about reporting is its value. Settling for only partial reporting, or whatever comes built-in with the core platform, can mislead decision-makers. Rather, credit unions should look for data analysis tools that provide more thorough assessments and customizable reports, enabling them to segment information as needed and to filter it by various parameters.
Having the ability to drill down to the factors that matter most to each unique credit union is paramount. In order to do this, reports must include more than just core data. It is also important to have third-party vendor information to ensure a comprehensive view into particular performance areas of the credit union. Credit cards and mortgage loans are two products that are often outsourced. These loans need to be integrated, measured and accurately reported along with in-house loans.
Once a credit union decides what is important to track for their unique business plan, it must determine how to track it. Many reports may be best geared toward day-over-day, month-over-month, year-over-year trends and comparisons. In this case, measuring changes by percentages offers a better perspective for what type of growth, or fluctuations in demand, are actually being represented. For instance, adoption of a product that increased by 20 members over the last three months may not seem significant, but if it represents solid 10% growth, then it may be far more substantial than at first glance.
Beyond time-trending analysis, member demographic data can provide a picture of service adoption across age ranges, delivery channels or geographic areas. It can be highly beneficial when planning targeted product and service promotions, and identifying cross-sell or up-sell opportunities.
Once executives have a comprehensive, accurate view of the trends in their credit union, actions should be taken to maximize the effectiveness of business plans. Measuring and reviewing key data on a daily basis enables decision-makers to make frequent, incremental adjustments to programs and offerings and keep them on track for continued long-term success. Furthermore, decisions will be made based on what is best for the credit union and its business plan, rather than what the nearest competitor is offering.
With properly leveraged data, credit unions can immediately improve how they take action in three primary areas.
Lending. In the past, decision-makers were often delayed in receiving access to useful, summarized delinquency and charge-off reports. Now, credit unions have the opportunity to assign additional resources, change policies or adjust rates to hold the line on loan losses. They can also closely monitor their application pipeline, in addition to recently funded loans, to ensure they are not exceeding policy maximums for specific loan products, such as real estate.
Profitability. Executives can quickly and efficiently analyze the areas that have the greatest potential to generate revenue and react accordingly. This may mean fine-tuning pricing to balance the source and use of funds. For example, finding out sooner versus later that a welcomed increase in member loan demand is occurring helps executives get a jump on the best way to attract deposits for funding loans.
Branch and ATM resources. Knowing where, when and how often members access financial services can help increase efficiency across branches and plan for ATMs. Staffing is a major budget line item, but having insight into the volume and type of branch activity enables branch managers to plan ahead and prevent hours of downtime. Branch analysis also helps managers adjust activities, rates, or promotions to achieve monthly goals.
Credit unions have the tools available to turn data into decision-making information and to arm themselves to answer fundamental business questions. Once data is analyzed and presented, credit unions can identify their highest potential opportunities and risks and adjust accordingly. The most noticeable impact will be to the bottom line.
Sue Chriest is director of R&D and operations at Symitar Cruise Core
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