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Data And Analytics: Unlocking Insights To Stay Competitive

Financial institutions have a wealth of data available to generate insights to inform difficult decisions about how to adapt and thrive in real time.

As a crucial resource in the modern world, data is often called the “new oil.” However, data and oil provide little value until they are refined and used to power practical applications. Financial institutions have a wealth of data available to generate actionable insights, and, in the rapidly shifting financial services landscape, these insights can help inform difficult decisions about how to adapt and thrive in real time.

Preferences And Behaviors

Over the past three years, the COVID-19 pandemic and economic unpredictability have significantly altered cardholder behavior and preferences, underscoring the importance of data. Lockdown restrictions resulted in a decrease in in-person transactions and an increase in the utilization and preference for digital channels and platforms. Germ exposure concerns converted many cash users to debit cardholders, as merchants avoided handling cash and turned to touch-free alternatives.

Examining timely data insights on cardholder preferences and behaviors during events like this enable credit unions to optimize their offerings and meet consumer demands for more variety, choice, and personalization across preferred digital channels.

The benefits of data and analytics extend beyond individual cardholders’ behaviors by revealing patterns on a larger scale. Geospatial data analysis offers a prime example. Its numerous upshots include the ability to visualize and understand cardholder demographics and calculate the number of members within a specific driving distance of branches and ATMs. These insights can help financial institutions understand their footprint, identify how to scale up and down, and pinpoint where to locate branches for the greatest return on investment. Additionally, geospatial data enables credit unions to detect clusters of transactions and cardholders, mitigate fraud through location and merchant analysis, and discover new markets by combining data on household spending, income, education, local businesses, and other factors.

Financial Wellbeing

Predictive cardholder behavior analytics also help credit unions improve their members’ financial wellbeing amid economic volatility. With the ability to anticipate a cardholder’s risk of financial hardship, credit unions can leverage connected experiences and proactively reach out with supportive tools and resources. By getting ahead of financial challenges, credit unions can help members maintain their financial health, preventing delinquencies and other negative consequences. This level of care and counsel can be a significant differentiator for credit unions by strengthening members’ loyalty to their trusted financial partner.

Digital Payments

The emergence of disrupters in the payments space presents another key use case: the adoption of digital payments methods, like quasi-cash service providers and peer-to-peer (P2P) platforms like CashApp and Venmo. The shift in consumer behavior persists today, and PSCU’s 2022 Eye on Payments study found more than half of consumers plan to use a digital payment solution like Venmo in the next six months. With data insights into this shift, financial institutions can adjust their strategy through connected experiences — driving cardholder loyalty by promoting the use of their card in the preferred P2P platform through marketing banners or pop-up messages in online or mobile banking. This still encourages the use of the member’s preferred P2P application, with the benefit of the money movement of the financial institution’s card keeping that member engaged and that card top-of-wallet.

Data insights are vital for maintaining a competitive edge in the constantly evolving financial landscape, particularly with the effects of the pandemic and new players in the payments space. By staying informed and utilizing data to produce timely and actionable insights, credit unions can deliver optimized products and services, connected experiences, and targeted marketing to their cardholders — fueling member experiences that help credit unions drive loyalty and stay ahead.

Ivana Spadijer is the Manager of the Data Science and Insights team at PSCU. She leads a team of data scientists who develop predictive, machine learning models addressing some of the top challenges for financial institutions. Additionally, Ivana analyzes payments industry data to extrapolate meaningful and actionable insights for credit unions in the rapidly changing payments market. Ivana has spent more than 18 years in the payments industry, holding various roles in data analytics as well as fraud and risk prevention. She joined PSCU in 2016 to establish a Product Management team with a focus on fraud and risk and in 2019 transitioned into a new role on the Data Science and Insights team.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
March 6, 2023

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