To learn more about its members, Wings Financial Credit Union introduced its member engagement score in early 2019.
Comprising 349 unique data points and five weighted categories, the score is used to plot members in one of five groups: from significantly less engaged to significantly more engaged.
CU QUICK FACTS
Wings Financial Credit Union
Data as of 12.31.19
HQ: Apple Valley, MN
12-MO SHARE GROWTH: 8.0%
12-MO LOAN GROWTH: 21.2%
What makes a good member?
In 2020, that’s not a new question; however, as data tracking grows more sophisticated and business intelligence more robust, some credit unions are finding modern methods to answer that age-old question. Such is the case of Wings Financial Credit Union ($5.6B, Apple Valley, MN), which tasked its business intelligence team to solve that query.
In the first quarter of 2019, the team introduced the first iteration of a solution, an internal-facing member engagement score, which assigns a numerical grade for a given member’s overall engagement with the credit union.
We’ve had conversations about just how engaged our members are, says Mike Lindberg, vice president of analytics and business consulting services at Wings. But we wanted to push beyond just counting transactions or branch visits.We wanted to paint a full picture of our members’ engagement.
The Credit Score Corollary
Wings’ member engagement score is modeled on another score familiar to industry participants, the credit score.
Mike Lindberg, Vice President of Analytics and Business Consulting Services, Wings Financial Credit Union
In practice, 349 unique data points, across five differently weighted categories, are analyzed and weighted to create a single, three-digital numerical score for each one of the credit union’s 281,466 members. Most data points the credit union collectsitself, while the remainder are gathered from Experian, a credit union partner.
It’s a meshing of all the various types of information that Wings collects, Lindberg says.
Each data point is grouped into one of five categories products and services, product utilization, performance, Wings relationship, and competitive relationship. These data points pinpoint a positive or negative indicator of a member’s engagementwith the credit union and, in sum, strengthen or weaken the category score.
Wings chose its five categories because, together, they create a holistic view of a member’s financial life.
The products and services score indicates whether a member has ownership of or relationship to a product or service. Data points include account ownership (the primary owner of an account), account relationship (the secondary owner ofan account), mobile app registration, safe deposit box ownership, financial advisor client status, and more.
The product utilization score shows how much a member is using a product or service. Data points include days since last line of credit draw, aggregate checking account transactions, aggregate online banking logins, frequency of directdeposit, member rewards redemption, and more.
Rolling these into the overall member engagement score gives us the opportunity to gain a better understanding of who we serve. And in finding the answer to that, we can strategize ways to deliver better value.
The performance score considers transactions or bad data, including aggregate late payments, mortgage loan refinance, percentage of on-time or early payments, wrong address, and more.
The Wings relationship score looks at channel usage, like aggregated online banking visits, time since last branch visit, marketing campaign response, loan applications submitted, and more.
The competitive relationship score is pulled from Experian and other external sources to understand how much a member uses other financial institutions. Data points include whether a member has outgoing ACH to external bill pay serviceor another financial institution, an open auto or mortgage loan elsewhere, and more.
Rolling these into the overall member engagement score gives us the opportunity to gain a better understanding of who we serve, Lindberg says. And in finding the answer to that, we can strategize ways to deliver better value.
Think of the way a credit score is pulled up or down based on its components, Lindberg says.
In sum, the analysis produces a three-digit score that ranges from negative to positive We wanted to allow a negative score because some factors are indicative of negative behavior, Lindberg says but the credit union alsowanted each category to be independently understandable.
The categories are insightful in their own right, Lindberg says. We’d want to see that a member is stronger in products and services than competitive relationship, for instance.
Wings doesn’t publish these scores. In fact, looking at a three-digit number is not the most useful way the credit union has leveraged its engagement metric. Rather, Wings groups like-scoring members into five groups: significantly less engaged,less engaged, engaged, more engaged, significantly more engaged, to create an insightful spectrum of member engagement.
We see where our members fall and we know how to classify them, Lindberg says.
The Use Cases
Based on the availability of its data Wings can pull its own data daily, while Experian data is gathered monthly the credit union can update its engagement scoring as frequently as it likes, providing historical insight that offers much-neededcontext as the credit union looks to learn from member engagement.
And learning is the goal, Lindberg says. Rather than start with the intention to increase the percentage of members who fall into the more engaged and significantly more engaged groups, the engagement score works to educate internal leaders with a point-in-timelook at the member relationship, whether good, bad, or in-between.
Our approach wasn’t to increase the score, Lindberg says. It was to leverage our data to see where they perceive and receive value now so we can deliver it back to them.
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Lindberg points to two notable learnings from the scoring process. First, the member engagement score offered insight into Wings indirect member population; of those with an indirect auto loan, 61% are grouped in with those who are significantly lessengaged.
They are likely to have loans elsewhere, they don’t use online or mobile channels, they don’t visit a branch, use a contact center, go to an ATM, Lindberg says. That’s not a huge surprise but it’s interestingto see borne out in the numbers.
Second, while the average member credit score does not vary notably among the five engagement groups, from 10-15 points, the average loan size does.
That tells us that even a low double-digit increase in credit score can essentially double the loan we offer our members, Lindberg says.
Thus far, Wings has used some learnings to refresh projects and update marketing campaigns, and it continues to build a historical engagement trend log. In the future, Lindberg has designs to iterate upon the current score, whether by adding more at-riskmarkers or a member feedback mechanism to help inform the score. Even with these changes, Lindberg says, the heart of the engagement score will remain, as will the credit union’s interest: Finding everything it can about its value as a cooperative.
Our goal, he says, is to give back in the ways we understand are most valuable to our membership.