The Convenience Economy and the Rise of Data Analytics

By Rich Trace, Vice President of Lending and Commercial Protection

Today's consumers rely on technology more than ever to make their everyday lives easier. Meeting their growing demand for convenience is dramatically changing how they do business with you. But in today’s convenience economy, don’t make the mistake of thinking that only the member benefits from a streamlined, digital experience.

Every digital interaction creates a unique data point, and today’s tech-centric lifestyles are creating massive amounts of data. Companies have come to understand that all this (big) data creates a roadmap to consumer tendencies and behaviors. This information can be critical to studying your members, identifying their needs and preferences, and developing strategies to be there for them when and how they want.

The power of data analytics was limited in the past. Not only were there fewer data points, but the available information was pretty much only what a company collected on its own. However, with the explosion in swipes, clicks and third party sources, the ability to research patterns and make educated guesses on future actions has become much more of a reality.

Toos Daruvala, an executive at McKinsey & Company, stated “Every single major decision to drive revenue, to control costs, or to mitigate risks can be infused with data and analytics.” Here are just four benefits for your credit union:

  1. Member Insight: Simply knowing your members better can give you a clearer picture of the products and services they use, channels they prefer, and profitability/lifetime value they offer.
  2. Member Centricity: Armed with insights, it becomes easier to refine communications and offers so they are more likely to reach the right member at the right time, to deliver a personalized experience.
  3. Operational Efficiency: Better segmentation and more refined processes will mean resources can be devoted to other areas of need.
  4. Risk Management: Data analytics can provide information that influences risk-adjusted pricing, portfolio risk management and fraud detection.

Of course, if data analytics were easy, everyone would be poring over dashboards and modeling forecasts today. Major considerations credit unions face include:

  • Technology expertise
  • Analytical skills
  • Financial investment
  • Data security
  • Compliance concerns

While these are important factors, they shouldn’t deter you from considering how the potential benefits could propel your credit union forward. As consumers continue to demand more convenience and drive more innovation, the amount of data produced will continue to grow. Integrating data analytics into your strategic planning process will help you address your members’ growing expectations.

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The Convenience Economy: How Members Are Driving Innovation and Changing Your World eBook