Making data meaningful for credit unions and their members

April 12, 2021

Every day, humans produce 2.5 quintillion bytes of data (that's 2,500,000,000,000,000,000 if you're curious how many zeroes that entails). And a large portion of that isn't the usual emails, tweets, and YouTube uploads - it's data we generate in the background as we go about our lives. It's location data, transaction data, credit card usage data, cookies, search histories and so much more. And as useless as this data might seem to us, to our financial institutions it offers a unique and valuable insight into the products and services we use, allowing them to better predict and meet our needs.

Credit unions are interested in capitalizing on their data that they have on hand to best use it to offer members tailored services. Regardless of size, credit unions can use “big data” to better assess loan risks and personalize lending rates. This data can also be used to make better-informed decisions on lending rather than relying on a small number of metrics, such as credit scores.

How do credit union members feel about their data being used?

Credit union members trust their institution and are willing to give a little more data to receive better service and solutions. This trust is there because of years if not decades of an already established relationship between both the credit union and their member, but the credit union and the community at large. Credit unions have that advantage over some of the larger banks and have put them in a unique position when it comes to the usage of data.

How can Credit Unions make data meaningful?

Like we mentioned, data comes from everywhere and the amount of data on consumer habits that is available is staggering. Merging that data while monitoring consumer behavior allows credit unions to begin to take advantage of this information and make it impactful. Credit card transactions are measurable insights that credit unions can use to go onto tailor customized services for their members. For example, all these pieces of data that come with credit card transactions can help credit unions assist their members with paying their different loans and obligations. By using data and analytics as a tool for foresight, credit unions can measure the member’s ability to pay different loans down the line and rework the loan through consolidations, reworking monthly payments, etc. This can make all the difference in the world for a member’s financial health. This helps both the credit union and the member in the loan process as the data can help paint a much more comprehensive picture of who that individual is without solely judging them by credit score.

This data also helps an incredible amount with the shift in how credit union marketing is done. In the past, the attitude of credit unions leaned more towards “come to use if you want to”. Now, the realization is that there are so many opportunities to actually “go find the member” and fulfill their need.

Credit unions have a vast library of member data that can be used to enhance the overall member experience. Examining and acting on the insights that this type of data gives you allows credit unions to bring customized rates and rewards to each individual member. “Big Data” gives your organization a firsthand look on how to adjust marketing strategies, loan rates, and your entire card loyalty program to meet the demands of the consumer. Providing this individualized experience is critical to keeping your members engaged.

About the Author
Bill Hampton, Credit Union Division Executive, FIS
Bill HamptonCredit Union Division Executive, FIS

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