Harnessing enterprise data and then leveraging it to improve members' lives can, well, feel overwhelming. There is the creating a data strategy (what is the why?), the tool (what are the features our enterprise needs now and in the future and then the data itself, (we have on average 60 to 100 data systems) then there is the talent - (how to turn this into action).
We also know that credit unions benefit from increased member acquisition and retention data, deliver relevant value to the member, identify risk, create early warning systems, and create and develop innovative products. There is no denying it; leveraging data can be a big task that feels out of reach for many due to limited resources.
But what is the cost of not doing anything, of standing still?
Let's review how its data impacts the credit union. The following areas harnessed, connected data has a very tangible impact on a credit union's bottom line.
Loan growth
Understanding members' auto loan demand and identifying where they might have these loans and another financial institution available for re-acquisition.
# of new auto/ mortgage/ credit cards
For example, and increase of 25 more auto loans at $25,000 each
for 5 years = $625,000.
Reduce attrition
Understanding the indicators your members give of flight consideration
# of accounts saves = Member growth
Early Warning Systems
Understanding when members are about to default or potentially have fraudulent activity
# of accounts saved from default - DQ ratio
Increased member engagement
The more a member uses products and services, the more likely they know about the credit unions offerings and use more of them.
# of increased use of OLB/ Payments
Increased member value
Understanding the value the member receives from using a credit union as its financial institution.
#increase of credit score
#increase of cash flow
#decreases in derogatory fees
#decrease in payday lending
Using the criteria mentioned above, the cost of standing still will depend on the size, scale, and current financial condition of the institution. An approximated loss (as in the amount not gained from stagnancy) of not gaining new loans, not reducing attrition, not saving members from defaulting, not increasing engagement, or adding additional member value can easily be close to $1 million.
As it is budget season, now is a perfect time to consider the cost of standing still and consider resources to move ahead!
Curious about the current state of data at your
credit union?
Take this quick
Data Success Assessment to find out!
Found at the bottom of the page.
Where can I fill my data knowledge gaps?
With a stop at the
Data Education Center.
We believe that data transformation doesn't have to feel overwhelming or expensive to be impactful. After helping over 600 credit union leaders launch their data journeys, we have identified several consistent knowledge gaps. We have worked hard to fill these gaps with a variety of educational artifacts:
NEW! Read the Data Education White Paper (found at the bottom of the page)
What if I want something more? Does someone offer data education classes with real-world applications?
Yep, that is what we do, of course, and so much more. To learn more, please review our data transformation institute