How far behind are credit unions when it comes to data analytics and digital transformation?
According to a recent study from Best Innovation Group and OnApproach, 45 percent of credit unions don’t currently have a strategy in place, and those that do have a strategy still say it will take three to five years to implement.
“The competition is already three to five years in front of most CUs,” declared Kirk Kordeleski, senior managing partner at BIG. “FIs, including the largest CUs in the U.S., are investing heavily in data strategies and analytics and are now seeing increased membership growth, loan originations and digital brand/marketing awareness.”
And, Kordeleski added, those CUs that aren’t making the most of data analytics could be in even bigger trouble if the economy goes south.
Kirk Kordeleski, senior managing partner at Best Innovation Group
“As we go forward there will be a significant performance difference between those that have invested and those that have not,” he continued. “We think any downturn in the economy will highlight the advantage that data-oriented FIs will have over their competitors.”
Approximately 85 credit unions participated in the survey, titled “National Survey Findings: Credit Union Data Analytics and Decisioning Trends.” Questions focused on topics ranging from strategies and timelines to budgets and staffing.
“The majority of CUs don’t have a clear understanding of what digital transformation means and why it is important it is to their future,” explained OnApproach CEO Paul Ablack. “I firmly believe that digital transformation should be the number one strategic priority for credit union leadership.”
The survey revealed that 70 percent of respondents had invested in analytics tools compared to the previous year. CUs allocated budgets most often toward staffing, data warehouses, analytics tools, and dashboard and reporting tools.
The OnApproach/BIG study is believed to be the first nationwide look at data analytics trends within the U.S. credit union movement.
Just over half of the credit unions who responded to the survey revealed they have budgets in place for data analytics, and 45 percent of those CUs plan to spend less than $100,000 on such tools this year. Roughly one-third of respondents will spend more than $200,000, while 15 percent will spend more than $500,000.