Is the fear of undertaking a core conversion holding your credit union back from making better business decisions that can lead to the growth? In the article, "Two Products That Will Increase Credit Union Growth," it is discussed how the number of credit union members in the U.S. represents approximately 43% of the economically active population, a number that is continuing to grow as distrust in big banks continues (think Wells Fargo). Additionally, a commitment to product development by CU executives has contributed to the sustained growth we are experiencing. However, what works for one credit union doesn't always work for another. How can you be sure you are investing in the technology that your members demand if your existing credit union core provider does not deliver meaningful data and reports?
While reporting is not the focus of credit union core systems, providing useful access to stored data within the core is imperative when budgeting and planning season comes around. Your member data, when reported in a relevant way, can not only tell you what products are best positioned for cross-selling to different members, it can provide insight into how your product investment dollars should be spent. For instance, knowing how and when your member base uses mobile banking can drive the direction your mobile app takes.
A Filene Research study conducted late last year predicted a trend in credit unions being stuck with outdated technology, mainly because of their fear of undertaking the necessary steps that a core conversion requires. The study observed that "credit unions largely employ outdated data technologies to power their core business functions. More alarmingly, rich sources of “new” data, such as user activity data from mobile, are largely ignored."
The study continues that traditional data is sometimes stored in silos, requiring inefficient and cumbersome processes to be used to extract information. Between this and the lack of "new" data, credit union executives are dissatisfied with the information they are given to help determine new marketing and product development areas from their existing reporting structure. Understanding, for example, how your members cycle through different products in your offering at different stages of their membership can help you introduce the right product to them at the right time, as well as know what products to invest in at times when the majority of your members are advancing through those particular phases.
While the need for progressive reporting is recognized, there is an underlying fear of adopting new technology due to the sheer amount of work involved in a credit union software conversion. A core system review can appear daunting, but it doesn’t have to be that way. As expressed in 3 Obstacles to Overcome in Core System Implementations, CUs should reflect on how much more efficient they will become when they are better able to serve their members with a new and improved credit union data processing system, providing access to advanced reporting information and product enhancements the right system can provide.
