A Credit Union’s Biggest Cultural Challenge: Its Smart Use Of Data

Many credit unions are successfully building the fundamental skills and infrastructure they need to utilize data more effectively. They’re aggressively investing in analytic tools, staff skills, and warehouses, but less so in the newer tools of decisioning, fraud, and predictive machine learning and AI technologies.

One of the biggest challenges credit unions face today is knowing how to use data to their best advantage. It’s a problem that runs fairly deep, and it stems from a cultural that is slow to accept the data-driven world we all now live in.

The Value Of Credit Union Data Analytics

Not that long ago, credit unions were well-balanced organizations offering better rates, service, and convenience for their members, especially those who could bank right where they worked. Then everything changed, and it seemed to happen overnight. Consumers began to demand digital banking and easier, quicker access to the services they were interested in.

For a variety of reasons, credit unions were slow to adapt, unsure how to make the transition from highly personal, community-based institutions to ones that could embrace the concept of using credit union data analytics to make smarter strategic decisions, shape future products and services, and provide a more tech-savvy experience for their members that was both fast and personalized.

It isn’t that analytics is a new or unfamiliar tool, but for many credit unions it’s been difficult to conceptualize its worth in moving them to the next level of meeting member needs. They’re not alone. Converting data into insights for the digital age may on the surface appear simple, but it’s actually a massive undertaking. Still, credit unions who hope to survive will need to acquire the skills required to use predictive and prescriptive analytics for operational decisions.

Upgrading Your Strategic Thinking

Getting there is not only about asking questions, but in developing the right skills in asking them. That means building a data-driven culture where people are using data to understand their members and making better decisions.

We recognize that it isn’t easy for credit unions, particularly smaller ones, to invest in the data capabilities that larger corporations like Visa, American Express, JP Morgan, Ford Motors, and Disney can afford. But with most of those companies now reporting that their data investments are achieving measurable results, credit unions must find the resources to support digital transformation or forever be left behind.

If credit unions want to attract new members, retain the loyal ones, sell more services to their existing customer base, reduce their operating costs, and expand into new markets, they’ll need to take the steps necessary to overcome their resistance to change. Traditional thinking and banking methods must be consciously set aside, with new approaches adopted that enhance growth and competition in today’s digital economy.

The Takeaway

Credit unions must recognize on a deep level that they need to keep changing if they want to remain relevant to their members. As they face increased competition from digital startups, they must transform their mindset and internal processes to meet their members’ digital needs. Specifically, better use of credit union data analytics must be quickly achieved and shifts in strategic thinking must be made. And they both need to begin today.