Originally published 5.17.21 in CU Times
Data is one of the most robust assets any enterprise can have, and credit unions are in a fortunate position to have a plethora of it.
When connected, data can produce valuable insights. With this knowledge comes the ability to change, innovate and improve processes. This knowledge also allows the credit union to get in front of the member and deliver what the member wants when they want it. This is the power of digital transformation.
Transformation does not occur with the purchase of technology and a hand-off to IT. It is an enterprise endeavor. Paul Lenoradi, a University of California at Santa Barbara professor of technology management, describes this transformation as a "process that doesn't occur from sparkling rhetoric and bold promises,… but from decisions made by employees on the front lines."
Thomas Siebel, author of Digital Transformation: Survive and Thrive in an Era of Mass Extinction, has called transformation the "next do-or-die imperative. How CEOs respond will determine whether their companies thrive or perish." And David Rogers, author of The Digital Transformation Playbook, has identified the five domains of digital transformation as;
Customers
Competition
Data
Innovation
Value
The credit union industry version of digital transformation is:
Enterprise Vision
Identifying the "why" the credit union is harnessing the data
Creating a future state that can be achieved in a reasonable time frame and via a beneficial framework
Leverage internal and external talent to create a transformation village
Member focus
Identify the members' financial goal
Identify friction, competition, and disruption in the member ecosystem
Envision a future member state and data use case
Data maturity
Assessing the data maturity of the credit union
Building a data governance foundation
Identifying the tools needed today and tomorrow
Talent
Building a data analytics consumption capability
Strengthening innovation processes and mindset
Continuous Capabilities
Creating valuable roadmaps
Building centers of excellence
Creating workplace adoption
Transforming a credit union is no simple task. A recent survey performed by MX found that 92% of credit unions do not leverage their available data effectively. Consulting firm McKinsey cites the top five reasons why data effort fail as;
1. Lack of clear data strategy.
Only 30% of FI surveyed by McKinsey had a data strategy
2. Inability to translate data strategy into tangible use cases.
3. Do not have clear road maps.
4. Do not have foundational data governance.
5. Have not leveraged their talent to translate data into valuable action.
For a credit union to be successful with data, it must acknowledge its organizational data knowledge gaps.
It is difficult to move forward when it feels like no one is speaking the same language. Understanding the core competency in data knowledge will only strengthen a credit union's success in launching a data effort.
To build proficiency in a data core competency, a credit union should identify its current knowledge gaps.
Here is a list of the following educational domains that elevate their enterprise data success:
Enterprise data vision
Member-centered data use case
Understanding/defining data maturity
Essentials of data governance
Creative data consumption by enterprise talent
Workplace adoption of data
Assess the leadership team on their understanding of these domains. In most cases, credit unions have some elements of each domain but are not formally leveraging their knowledge. Once the credit understands where the knowledge gaps are, they can build an education program to fill those gaps. Education can come from various sources, including books, articles, webinars, and online classes. Make sure the education is credit union industry-specific and offers application of the knowledge.
For true data success, take the time to build up a data knowledge capability. It will pay back in dividends.
Where can I fill my data knowledge gaps?
With a stop at the
Data Transformation Institue
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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:
Data Transformation Institute (our CPE accredited courses)
If your data governance education doesn't include M&Ms and Skittles it should.
"Data Governance is not the easiest of subjects to get your arms around, but it is exceptionally important in mastering data management. Anne did an outstanding job educating our leadership team on the foundational data governance domains. The online experience was dynamic, engaging, and enjoyable. Our team now has clarity on the function and framework of this important topic and we are looking forward to building upon that knowledge."
VP of BI at a $2 Billion Credit Union
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