By Ray Birch
TAMPA—Calling it one of the biggest ideas to “hit the credit union space in quite some time,” Tom Davis believes now is the time for credit unions to break down walls and collaborate nationally on a data warehouse that could someday rival big banks’ resources, saying it’s critical to CU viability.
As CUToday.info reported, Trellance and the Filene Research Institute have partnered to create the Credit Union Data Exchange (CUDX) and are seeking 100 credit unions to participate. But Trellance’s CEO is stressing CUDX is not a Trellance product and is intended to instead foster conversation around data sharing.
“Credit unions need to join forces and share their data to compete with banks,” Davis told CUToday.info, adding CUDX is the result of a long journey.
“We’ve been in the data analytics space for quite some time,” David said. “We eventually started looking at the cloud, along with a lot of other providers that were offering data analytics solutions for credit unions. We were watching credit unions mature along the cloud path at the same time, and then all of these tools became available in the cloud. But you would build a solution and no sooner than you finished there would be a whole new toolset out there that would basically almost replace everything that you had just built. It has been a constant cycle of evolution around cloud based analytics technology.”
Sharing at Scale
Davis said that enough time eventually passed and sufficiently knowledge has been gained, however, to make it clear to his company that it could easily create something like CUDX.
Davis pointed out there have been limited efforts around data sharing among credit unions in recent years, primarily in the form of “ad-hoc” collaborations with core systems allowing credit unions to form user groups and allow them to share data.
“But sharing data on this kind of a scale, with CUDX, I don't know if anybody's even attempted to do what we're doing right now,” he said. “I don't know of anybody that's ever tried to do this on a mass scale.”
Tom Davis
Opening the ‘Locker’
What Trellance hopes to do with CUDX is “just open up this locker and then have a concept available right out of the gate,” explained Davis. “Credit unions won’t go through this heavy lifting of creating a data warehouse. We're talking about transactional-level data that's frequently updated and is deep and wide. I think this is one of the biggest ideas to hit the credit union space in quite some time.”
Davis focused on the advantages data sharing can bring to the movement.
“If we collaborate effectively to share data, maybe credit unions collectively could compete at the level of a top-six bank. But credit unions have to collaborate and work together much better than they have in the past,” Davis said. “Some of the larger banks are already sharing data, and they're not even considered to be collaborative—certainly not as much as credit unions. I will tell you now, this is something we all can do—something that we all should do, something that has an endless amount of possibilities for credit unions.
Responding to the Amazons & Apples
“This will put credit unions on par with other financial service providers, and we shouldn't just talk about the big banks,” he continued. “We're talking about folks outside of the banking industry trying to enter our space—the Amazons, Apples and Googles out there that harness data and use very large data pools to be able to serve their customers and their clients best.”
While credit unions often talk cooperation, Davis acknowledged it can often be lacking.
“In my mind credit unions feel they need to fiercely look out for members’ data. And while I think that's a good thing, I think that causes a little bit of trepidation—a bit of a pause when it comes to sharing data. A little bit of a hey, let's not move too fast here. But sometimes what forces collaboration comes from outside the credit union space.”
Davis emphasized CUDX is not some big tech or financial services company coming from outside the credit union community.
‘Not a Trellance Product’
“This is a collaborative platform built by Trellance, a wholly owned credit union cooperative,” stressed Davis. “There is no private money here. No one is from the outside trying to make this work. This is not intended to be a Trellance product. It is intended to start a credit union exchange and conversation around data sharing, at which Trellance will have a seat at the table. This is not another business line we are growing. I want CEOs, people who understand data…I want those folks to control the conversation. I just want to be in the room. We are the enablers, but credit unions will take this forward.”
Davis believes CUDX will be much more beneficial for the movement than just credit unions attempting data sharing on their own. He said the company’s goal is to start with 100 CUs, some of which are very large, which will provide the proving ground to drive even greater participation among cooperatives.
He added the CUDX initiative is already more than half the way towards its initial participation goal.
100 + 100 + 100
“We are certainly not capping this at 100 credit unions,” Davis said. “We’re going to start with 100 who will be the pioneers here, share data and collaborate, and watch this evolve. It will expand. There will be sub-communities within this 100. These pioneers will be on the forefront of solving some of the biggest problems the industry faces. What kind of research and use-cases will come out of this? These will be the first 100, and there will be another 100 and another 100…”
Davis added that partnering with Filene will help for better decision-making, relying on the Institute’s research and academic background, as well as the ability to provide a wider perspective from outside just credit unions.