By Anne Legg
There are currently more than 6,000 financial technology start-up companies actively targeting small pieces of profitable credit unions’ business. These start-ups are forcing credit unions to quickly identify survival strategies to combat this disruptive climate.
Fortunately for the industry, credit unions have robust amounts of data that can be connected to gain insights to help them better understand their members, including:
- Member Next Product: Identifies the make, model and competition for member’s next vehicle.
- Member Purchase Behavior: Identifies where members shop, buy their groceries, fast food, and gas.
- Member Media Consumption: Identifies what members are most likely to watch, read and listen to.
- Disruptors: Identifies who is currently disrupting your business.
Here is how the $350-million Our Community Credit Union in the Pacific Northwest has been a ble to connect its data, create insights and take action. They engaged with the OnApproach M360 data warehouse solution and THRIVE Strategic Services to connect their data and build strategy.
The Process:
Step 1: Connected their quantitative data using OnApproach M360 data warehouse solution.
Step 2: Connected their quantitative data with their qualitative data via the THRIVE Transformation Process.
Step 3: Worked with THRIVE to study the BI generated from the process and developed impactful growth strategies.
The BI:
The credit union’s data was combined and analyzed to produce a 56-page discovery report.
The following are insights from one of the credit union’s identified member segments.
"We know we need to increase income, reduce expenses and create efficiencies, "said Ryan Drake, Our Community Credit Union Chief Financial Officer. "This process provided for many insights. One was identifying our true competition, the competition that is our member's wallet. Our competition was much narrower than we thought and it made us realize that we don't have to compete with everyone, just our key competition."
Actions
At an onsite strategy session, the credit union team developed growth strategies based on the discovery report. The following are Key Performance Indicators (KPIs):
1. Improve efficiency of the account opening process.
2. Increase loan growth via new loan products.
A) Retail lending loans medical and dental procedures not covered under insurance
B) Separate aftermarket truck accessories loan.
3. Increase Indirect auto loan conversion via new conversion program.
4. Increase interchange income via the creation of exclusive and individualized rewards programs.
5. Improved loan base analytics to more clearly identify lending opportunities, rate opportunities, and improve risk management
Identify your survival strategies
“This process illustrates how important the data is to understanding our members and creating authentic and sustainable value to them.” Said Bert Fisher, CEO Our Community Credit Union.
The data currently housed in core processors, loan origination systems, transactions and other data silos are full of insight that will provide a deeper understanding of current and potential member’s needs. Harnessing this insight to build growth strategies is crucial to succeeding today and sustaining tomorrow.
Anne Legg is founder and principal of THRIVEStrategic Services, is a recognized credit union expert and thought leader with an MBA thesis on the credit union business model as well as two internationally published whitepapers on credit union business strategy. For info: anne@anneleggthrive.com 858-255-0636, www.anneleggthrive.com