Providing superior service and growing membership will continueto be a top priority for credit unions. But, to compete in today'sovercrowded, competitive market, many credit unions are investingin and utilizing advanced analytics. Why? Because many of theircompetitors are already using big data analytics in big ways. Andif they're not yet, they're exploring it. Consider these big dataanalytics investments, which can lead to big returns.

Take Big First Steps

Credit unions need a strategic plan for collecting andorganizing data, and a way to measure how data analytics can createlong-term value. Not all individual credit unions have theresources of corporate giants or mega banks, but advances in datastorage and software tools mean that credit unions can startleveraging the value of their data right away. To get started, thefirst step is to ensure they have the expertise, staff, budget,tools and skills (whether in-house or from an outside partner) toeffectively collect, sort and act on their data.

Capture More Market Share

A big data analytics program allows credit unions to create newrevenue streams and resources for members, while increasing memberloyalty – which makes the credit union stronger. Effectivelycapturing, collecting and slicing through hidden opportunities willdifferentiate the true winners in today's competitive market.

Predict the Next Best Product

Using cluster analysis of 500,000 anonymous credit union membersand 250 million transactions over a five-year time frame,researchers from Filene were able to determine the next bestproduct a credit union member would acquire with 30% accuracy. Thebest predictors are the balance-to-income ratio, theexpense-to-income ratio and the balance of loans to savings.

Gain Actionable Knowledge

60% of financial institutions in North America believe that bigdata analytics offers a significant competitive advantage, and 90%think that successful big data initiatives will define the winnersin the future, according to Capgemini. Advanced analytics allow abetter understanding of behavior trends and purchasing influencesof loyal members. When armed with data about which products membersare mostly likely to acquire, it takes the guesswork out ofcross-sell opportunities and enables enhanced member benefits.Member service is enhanced as cross-sell efforts are more directed;the goal is to offer less and sell more.

Consider Embedded Data Scientists

If your credit union opts not to invest in and hire data talent,which can be costly and time consuming, specifically seek out thosepartners with a customized, sophisticated, yet simple analyticssolution, and/or one with embedded financial institution datascientists that can share industry best practices.

Improve Member Loyalty

Insights from data will help credit unions better managemembers' experiences and help find ways to cross-sell and developrelationship pricing for loyal members. Advanced analytics allowthem to develop a metric to identify loyalty and churn risk.

Create ROI-Driven Marketing

Develop more effective marketing and lead generation campaignsthat are targeted to the right member, with the right message atthe right time. Having a system that allows credit unions tosegment, manage and track specific actions will enhance theirmarketing ROI. Analytics allow them to determine which marketingcampaigns and segmented audiences are the most responsive andeffective today and in the future.

Predict and Mitigate Risk

Enhance risk and fraud management by easily and quickly spottingpattern changes that are an indicator of potential risk. Predict amember's risk of defaulting or becoming delinquent on one or moreloans.

Steven Simpson is senior vice president of financialinstitutions at Saggezza. He can be reachedat 786-859-4100 or [email protected].