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Impacts Of Data Science And Analytics On The Credit Union Industry

Every member interaction offers insight into preferences and habits. Using these data points, credit unions can not only better serve their members but also increase revenue, build loyalty, and grow their organization.

Whether credit unions realize it or not, the future of the industry will be heavily shaped and impacted by access to and full utilization of data science and analytics. By using member data to the fullest, financial institutions can drive strong business decisions and create unique, personalized experiences for their members.

Defining Data Science Analytics Today

Current data and analytics solutions are used to power a variety of functions and enable us to improve the member experience in many ways. These functions include, but are not limited to:

  • Day-to-day operational reporting, providing a look into the credit union’s key statistics and performance.
  • Business intelligence, including key insights that drive decisions on business direction and strategic investments.
  • Consumer insights, communications, and marketing, which leverage data to identify an understanding of members’ behavior and drive offers or messages that are based on their needs.
  • Enabling digital experiences, which in more advanced use cases can drive action in member-preferred digital channels whether that is the website, mobile app, contact center, or branch.
  • Newer to the suite of data solutions, predictive analytics allows for predictive modeling and data science, which advances how precise and personalized experiences and interactions with members can be.

An ideal data and analytics suite will not only include, but go beyond, a flexible data management and warehouse strategy to support ad-hoc queries, data enrichment, and data discovery. Credit unions with a comprehensive solution suite will be able to collect and analyze enriched data to create a holistic view of member behavior, thus driving actionable insights. Those without, on the other hand, will run the risk of member attrition.

How Data ScienceAnalytics Drive Connected Experiences

The possibilities are endless when the power of data analytics is combined with modern consumer experience channels and ever-evolving technology. One positive outcome is connected experiences, which stem from a vision to bring all member data and channels together to produce highly personalized interactions that meet or exceed consumer service expectations, fulfill revenue opportunities, and potentially drive down operating expenses. Positive member experiences across all channels and financial products benefit both the member and the credit union, facilitating high value servicing, promoting product adoption, and supporting communications that can be broadly delivered in a consistently engaging and personalized manner.

There are several ways to consider creating connected experiences for members. First, each interaction should be improved by the best-known information about the member and their prior experiences with both products and channels, consistently connecting relevant data to optimize the capabilities of each channel. For example, a member may begin a business process in one channel, like the mobile app, but not complete it, and subsequently accesses a different channel for assistance, like the contact center, to finish the process. In this instance, a connected experience can be created by using cross-channel context sharing so that the second channel, the contact center, already knows where the member left off on the mobile app and is able to continue the process from that point.

The Value of Connected Experiences

Data-driven experiences show tremendous value for credit unions already, with a promising future on the horizon. There are many cases in which connected experiences can be leveraged to directly increase credit union value.

Revenue can be increased by engaging members via personal experiences on each of their channels through card activation, onboarding journeys, and loyalty programs. Accelerate penetration growth by leveraging member interactions through new card/loan offers, new member acquisition, and top of wallet strategies. In addition, losses can be reduced by protecting members and credit unions in all interactions through the use of expanded user authentication, geographic and transaction velocity patterns, fraud alerts across all channels, comprehensive identity management, and privacy compliance. Finally, improve the member experience by using channels to meet members where they are. This can look like personalized messaging and channel preferences, anticipating service requests, controls to avoid offer and/or communication overload, and more.

Each member interaction can become a data point used to uncover insights into their preferences and habits to benefit both the member and the credit union. Using these data points, credit unions can not only better serve their members by anticipating needs and creating personalized experiences, but also increase revenue, build loyalty, and grow their organization.

Jeremiah Lotz is the Managing Vice President, DigitalData at PSCU. He directs PSCU’s initiatives to empower the company’s Owner credit unions with innovative and engaging payment solutions. With a focus on creating exceptional digital experiences based on data-driven intelligence, Lotz leads an experienced team dedicated to delivering PSCU’s data science, analytics, and digital experience solutions.

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 7, 2022

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