How Credit Unions Can Use Big Data to Drive Revenue
Many of you likely have heard the term "big data" thrown around, but may not be entirely clear on what exactly it means. In short, big data refers to the collection and use of a massive amount of information from a variety of sources that can be analyzed computationally to reveal certain patterns, trends and associations, especially those related to human behavior and interactions. This familiar term is far more than a buzzword, though — it is a valuable tool that should be integrated into your credit union's overall growth strategy.
Here’s how your credit union can use big data to enhance member relationships and increase profitability:
Utilize the member data you already have. Your credit union already has powerful information about your members from your core processor and transactional data. By collecting this data, you can get a clearer picture of your member base, enabling you to build profiles and create marketing campaigns and product offerings. Member spending information can also give your credit union useful insights on different target market segments. For example, by assessing where your members are shopping via their purchase history, you can incentivize members to use their credit union cards by offering gift cards or rewards points for shopping at places they already frequent. You can also use this information to cross-sell other products and services your credit union provides. These types of campaigns are mutually beneficial to the credit union and your members.
Assess data from third party sources. Social media is a prolific tool that can be used to assess what your members think of your credit union. Are they experiencing any issues with the branch or your online or mobile platforms? An easy way to find out is by scanning your social media accounts. You can also analyze what people are saying about your competitors on social media, and use this information to determine how your credit union can differentiate itself and attract more members. Credit union industry groups also house a plethora of member information and can be a great resource. It is important to also monitor current economic trends that can affect member behavior.
Have the right tools and people in place to analyze the data. The biggest obstacle in leveraging big data is finding the right people and tools to analyze it. With such a massive amount of information available, make sure your credit union has the right people to cull the data you need to make informed decisions. Your core processor and third-party applications must be maintained in order to ensure you have the latest, most accurate information. A solid core processing solution, top-notch analytics software and the people to apply the information learned from the data can make all of the difference.
Implement a strategy to use the data to your advantage. By mining big data, your credit union can determine what your members really want. However, in order to be successful in this effort, it is crucial that management is involved and asking the right questions (e.g., What are our goals? What do we need to measure to achieve them?). These questions need to be asked before undertaking a big data analysis project, so you have a targeted approach to the data and can to break it down into actionable items.
Big data can be a game changer for credit unions if it is utilized appropriately. Your insights are only as good as your data — make sure you have the right people and tools in place to collect and analyze it. The results can be transformative for your credit union as well as your members.
Jami Jennings is product management director at EPL, Inc. She can be reached at 205-408-5300 or Jami.Jennings@epl.net.