According to a recent Oliver Wyman report, “A Money andInformation Business: The State of the Financial Services Industry2013,” the “source of value in financial services has shifted frombalance sheets and physical distribution networks to data.”

Despite this, many organizations have largely persisted withtheir historical business models and ignored the value that theirdata possesses.

As the financial services industry rises from the recession andadjusts to the new regulatory and slow- growth environments, creditunions are being pressured to find new ways to generate revenue.The data that your business holds is incredibly valuable andleveraging it to attract – and retain – members may be one of thebest ways to succeed in this new climate.

By accessing and understanding members' relationship andspending data, you can develop an in-depth knowledge of yourmembers and their behaviors. Where do they shop? How do they pay?How do they prefer to interact?

Many organizations talk about payments, but credit unions have akey asset that others don't – the actual payment transactions madeby members. And this data shows lifestyle trends and needs that canbe leveraged for more effective product promotions designed tobenefit all parties.

It seems simple in concept, but credit unions frequentlystruggle to get a complete picture of individual member behaviorsdue to an information environment made up of dissimilar, separateinformation systems. As a result, the default is often ageneric, cookie cutter, mass approach to product promotions thatisn't based on true member insight – and subsequently doesn't drivethe desired results.

Too often, I have seen credit unions struggle to attract newmembers, fail to provide existing members with the right incentivesto maintain their business, and miss the opportunity to driverelationship expansion and profitable behaviors for the institutiondue to promotions that were based on responding to a competitor or“best guess” management thinking, rather than on intelligence ofmember behaviors and goals.

The solution to this problem is analytics. Through the use oftools that enable credit unions to segment their portfolio anddevelop insights, institutions can devise targeted promotions thatbetter meet the needs of their members as well as drive thebusiness results that the organizations want.

How might this look in practice? With sophisticated tools,credit unions can analyze members' payment activity (e.g.,electronic vs. cash & check; credit vs. debit vs. prepaid,Store X vs. Store Y shoppers, etc.), demographics (e.g.,age, geography, gender, etc.) and/or profitability (e.g.,top revenue-generating members, underperforming or “at-risk”segments, etc.).

Leveraging this knowledge, an organization can then create moreeffective, targeted strategies for these different kinds ofmembers, and offer relevant, tailored incentives that providemembers value as well as influence decisions that are mostadvantageous to the credit union.

Here's an example: a credit union in California had thechallenge to increase card portfolio profitability. To start theirefforts, they used an analytics tool to evaluate and segment theircardholders to determine those who had used their debit cards lessthan five times per month. Next, they initiated a giftcertificate-based incentive campaign designed to increase thenumber of signature debit transactions to nine per month.

This campaign not only drove an increase in the number ofmembers meeting the nine-transaction threshold, it also encouragedhundreds of others to increase their debit card usage. Only thosemembers who qualified received the offer, making the campaign verycost-effective, with benefits extending well after the campaign. Inthe first 12 months after the promotion, the credit union realizeda 170% return on its marketing investment.

This credit union was so happy with the results that itinitiated another campaign. In this case, it analyzed and segmentedits member base to identify members performing less than $250 insignature transactions during the month. It then instituted apromotion that encouraged these members to spend $500 or more permonth in signature transactions. If they met the criteria, theywould receive $20 in gas vouchers. If their transactions totaled$900 or more per month, they received $40 in gas vouchers.

The results of this promotion included a 12-month program returnon investment of 408%, 83% growth in POS signature spend, 64%growth in POS signature interchange revenue and growth of 156% insignature debit spend per card. Actual net interchange revenue gainwas $53,140 in the first six months of the campaign, with aprojected 12-month net interchange gain of $106,280.

These are just two among hundreds of examples I have seen wherea credit union is able to create additional value by using the datathey have available. You, too, can do this. By analyzing the wealthof member relationship and spending information at your fingertips,you can gain powerful insights to better understand your members'activities and trends, as well as their particular needs.

Armed with this intelligence, you can offer customizedpromotions that simultaneously create high member satisfaction anddrive behaviors that are most beneficial to your credit union.

TysonNargassans is the president/ CEO of Saylent Technologies Inc. inFranklin, Mass.