By Tim Peterson
The amount of available customer data is rising at an incredible pace, increasingly covering all aspects of a customer’s life. Approximately 90% of worldwide data has been created in just the last two years. According to McKinsey & Company, by 2020, approximately 1.7 megabytes per second of new information will be created for every human being on the planet. In addition, more than 20-billion smart-connected devices will exist in the world, all developed to collect, analyze, and share data.
The sheer volume of consumer data opens up opportunities for credit unions but also brings challenges as they look to use data to grow and strengthen member relationships. In a recent CUNA Mutual Group research report, almost 75% of credit unions see data analytics as a way to transform the way they do business.
While credit unions view data analytics as a top strategic priority, less than 10% of credit unions have a comprehensive, multi-year roadmap established. More than half of credit unions surveyed feel they’re underinvesting in data analytics, while one-third feel their capabilities are above par compared to their peers.
The Need for Scale
And with the insurgence of insurance technology startups entering the credit union industry with disruptive and, at times, fragmented solutions, “data as a service” requires more than a new technology approach to data analytic capabilities. Building these capabilities require the ability to scale across various types of credit unions, member segments and markets. It requires solutions to help credit unions organize, translate and ultimately execute upon the data available.
It is also critically important to understand the deep trust-based relationships between a member and the credit union, as well as the intimate understanding of a credit union’s business in order to develop the right data analytics strategy.
In the many conversations I have had with credit union leaders, it is clear to me they not only recognize the transformational potential of data analytics, but place it at the core of their business strategy to spur growth and drive member retention.
3 Major Areas of Opportunity
Here are three major opportunity areas credit unions can capitalize on for success:
- Boost traditional levers: These levers include improving the member experience and retention with new products; services and pricing options; improving efficiency; and managing risk.
- Develop new growth areas: Data can strengthen insights to explore new product and business models. Many financial technology companies are capitalizing on this today.
- Deliver upon the digital experience: By gathering and analyzing real-time data, credit unions can improve the digital multi-channel experience for members.
CUNA Mutual Group has built a strong history of data analytics with our extensive data on 60 million-plus credit union members and our analytics-led growth, with TruStage marketing initiatives. With the recent launch of CUNA Mutual AdvantEdge Analytics, we continue to serve credit unions with our commitment to develop data analytics solutions collaboratively to better serve members and further strengthen the credit union movement for the future.
Tim Peterson is president of CUNA Mutual AdvantEdge Analytics. Contact him at tim.peterson@cunamutual.com.