As a credit union, the trust of your members and community is second to none. In fact, 63% of consumers polled as part of the Kellogg Trust Index said they trust doing business with credit unions compared to 21% for the overall financial system. While valuable, credit union trust is no longer the end-all, be-all to providing a differentiated member experience—data is.
Yet, it often appears as if credit unions are more reactionary and late arrivers to the data optimization and transformation party. Surprisingly, it's not due to a lack of data, but a lack of analytics to properly interpret the data. Let's take a closer look at the value of data analytics and how credit unions can use it to thrive in a competitive lending environment.
Strategically Drive Growth with Purpose and Insights
By leveraging predictive analytics and intelligence, credit unions can create more strategic plans across all lines of business and products. Tapping into data analytics can open the door to valuable insight into virtually every facet of the business, including:
- Member behavior and preferences
- Loan participation, utilization, and candidacy
- Risk assessment
- And more
Interpreting data with analytics can help your credit union strategically improve, adapt, and thrive in virtually any environment. And amid record inflation, staffing shortages, and global supply chain issues, it's more important than ever for credit unions to identify opportunities where they exist while making more informed decisions.
Adopting an Inside & Out Approach to Data Analytics for Lending
When it comes to data and data analytics, the whole is definitely greater than the sum of parts. In other words, when you aggregate data from external sources and combine it with the precious member data you already have, you can gain an unrivaled big-picture view. Here are a few key external data categories that should be leveraged to amplify your forecasting:
- Third-Party Data Sources—Experian, Zoom Info, financial filings, Amazon, LexisNexis, purchase habits, etc.
- Member Engagement Channels—LinkedIn, Facebook, Instagram,, and other social media networks, as well as website interactions.
- Organizational Business Systems—Marketing systems, core processing systems, card processing systems, etc.
- External Market Analysis & Data Sources—Prescriptive data analytics models and predictive models.
When you aggregate valuable data, you can strategically drive strategic options and supercharge forecasting abilities.
Launch Lending Products More Strategically & Effectively
In the financial services industry, timing is everything. And when you leverage data analytics, you can master timing with surgical precision. Drawing on insights and trends, credit unions can not only unlock the "what"—in terms of lending products—but the "when" as well.
In addition to lending solutions, data analytics can help you make more educated decisions around the most opportune time to expand certain areas of the business to maximize the impact. Simply put, data analysis can empower you to provide the right products to the right members at the right time, similar to the way Credit Karma has mastered personalization.
Reduce and Mitigate Financial Risk
With any decision your credit union makes, there is a certain level of risk and exposure involved. But when it comes to lending, the risk is amplified by the loan amount. However, predictive analytics models are extremely valuable in enhancing your risk modeling and pricing to help ensure an optimized return on investment for your portfolio. For example, you can track the likelihood of loan default risk by analyzing data associated with metrics and indicators, such as insurance, banking, and deposit data, and loan data. In addition to credit risk, data analytics can be used to hedge against market risk, legal risk, operational risk, and liquidity risk toward more profitable decisions.
Supercharge Your Lending Efforts with Data Analytics
Data analysis can help drive strategic decisions, mitigate risk, optimize the timing of new products, and provide a superior, birds-eye-view perspective of members, the credit union, and the industry. Credit unions can wield these powerful insights for a more strategic view of every facet of the business, especially lending.
Learn more about the power of data analytics in lending by downloading the Flex & SavvyMoney Integration eBook.