How real-time data can improve credit union member acquisition and retention - Member Access Processing

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Having a solid member base is a large part of what makes a credit union successful. Because of this, bringing on new members is one of the most important goals of a credit union.

One strategy many credit unions have taken in the past is to target particular audiences that would be a good fit for the organization. For instance, a credit union focusing on students at a particular university will gear its marketing tactics toward that institution.

Credit unions, like many businesses, often took this one step further to try to predict trends among its target audience. They use historical data and employ consultants or data scientists to accomplish this. This was always the smart thing to do, because historical data, though reflecting the past, was the most current information people could use.

The downside of historical data
However, there are some issues in using this tactic. The world is constantly changing and evolving, and so is any given credit union’s member base. As Mike Davie, the founder and CEO of DataStreamX, an online real-time data stream company, explained in a blog post for Data Science Central, there are several flaws in using only historical data to tailor a marketing strategy toward a target audience.

Real-time information is the only thing that can give current projections about specific topics. Unfortunately, not many companies and institutions in the U.S. are taking advantage of this innovative method of predicting future trends. Only one-quarter of U.S.-based firms are utilizing these tools, and 28 percent aren’t sure how to begin.

The first step
Getting started can be a significant hang-up for many credit unions. Merlin Bise, co-founder and chief technology officer of GIACT Systems, a risk management services provider, explained it’s important to know how real-time data can be integrated into a credit union’s already-existing workflow, PYMNTS reported. If there isn’t a plan in place for this new form of information, it is essentially worthless.

If the first step to taking advantage of real-time data is finding a specific use for it, the second is to attain the information. The data used must be compiled correctly from companies that have double- and triple-checked for accuracy and are in line with compliance standards.

Making use of accessible information
It is possible for a credit union to begin to collect and analyze data in-house, though this can prove to be difficult. However, there are many ways credit unions can use real-time data to their advantage on their own. John Best, chief technology officer for Wescom Credit Union in California, told Credit Union Magazine that these financial institutions have access to more usable data than the average retailer. Credit unions would be wise to use it to their advantage.

Best offered the example of offering loans to current members. Credit unions have access to data regarding these people from such channels as credit bureaus and subsidiaries of the branch in which the member has invested or obtained insurance, among many others. This information can be useful for retaining members and showing them the many products the organization can offer.

“Wouldn’t it be great to know when Ford Motor Credit has pulled a credit report on your member?” Best pointed out. “… When Ford pulls a credit report, you could send a text to the member with current auto loan rates, a ‘click here to apply’ button, or a preapproval for a new car loan.”

PYMNTS said real-time data is helpful when bringing on new members, too. It can help them to recognize who is more likely to join the credit union more quickly, so the organization can focus its efforts where they will make the biggest impact. The data can also be used to find out what products new members are most likely to be interested in. That way, the credit union can tell members about specific products that will be most helpful in bringing them onboard, rather than wasting their time telling them about something that has little or no value to the new member.

Real-time data can change the way credit unions reach out to new, current or potential members to give them a better onboarding experience and to improve member retention. All they need to do is take the first step.