Dec 01 2015

Rightsizing Big Data for Credit Unions

Do you think your credit union is data savvy? Or do you have a huge challenge ahead to become more data competent? Click on the assessment tool above to find out where you’re at and get some tips on how to be a more data-driven credit union.

This report explores the experiences of credit unions across North America with “big” data and data of any size. Credit unions of all sizes are learning to rightsize big data, aiming for an end goal of using data to serve members, drive growth, and strengthen their organizations. We conducted in-depth interviews with credit union leaders and data experts to study the business relevance of data and the need for better analytics to drive decision making.

Spotlighting four credit unions and their experiences with rightsizing big data shows the importance not just of data management and infrastructure but of analytical tools and human skill sets. Becoming a data-driven credit union requires appropriate technology, people, and organizational frameworks. Leadership also plays an integral role, as resistance to data initiatives can lead to cultural distrust of data.

For credit unions, big data can shed light on essential topics: managing credit and operational risk, predicting member behavior, segmenting members, and increasing share of wallet with new and existing members. Focusing on data capabilities will:

  • Transform insights into competitive advantage. BlueShore Financial, based in North Vancouver, Canada, has been on its data journey for the past 15 years. Through data analytics the credit union has been able to identify the financial profile of its ideal member. Today, nearly 85% of BlueShore’s 40,000 clients have been identified as its target audience—achieved by improved understanding of potential value and developing deeper relationships with those existing clients to capture increased share of wallet.
  • Improve product profitability. Colorado- based Westerra Credit Union has been keen to undercover methods to add more value for its members by looking at ways to modify its pricing models. Working with its card- processing partner, Westerra wanted to better understand the characteristics of the different credit card holders in the market. Soon the credit union will be launching new cards, including two low-rate card options with (or without) rewards programs tailored to the Westerra membership.
  • Bolster understanding of member needs. Situated in the most eastern province in Canada, Newfoundland and Labrador Credit Union (NLCU) serves more than 21,000 members. In 2012, NLCU engaged a market research firm that explored how members felt about topics such as being part of a credit union and the role of financial institutions. NLCU used the research findings to create a life stages–based framework that outlines each segment’s key characteristics, beliefs, and concerns as well as ways that NLCU can be of service.

Filene thanks its generous partners for making this important research possible:

Report Number 381