The Decision Maker

Credit Unions - Are Ready to Play In the Big Data Game?

Posted by Peter Keers, PMP on Nov 24, 2014 12:11:34 PM


One of the best blogs I’ve read on credit union Big Data and Analytics (BD/A) in the past year is John Best’s  Everybody Wants to "Moneyball" Their Credit Union.  John highlights the often cited example of how Billy Beane and the Oakland Athletics stunned the baseball world using data and analytics to successfully drive their decision making. This trend in sports keeps evolving as evidenced in the Wired magazine November 2014 issue article, Court Order: One Cartographer’s Audacious Quest to Map Every Moment of Basketball and Change the NBA Forever.

While the BD/A trend rockets ahead in sports, credit unions have been slow to adopt these types of innovations.  John’s blog is a call to action for credit unions to embrace these techniques. In doing so, he makes two important points.

Master the Data

First, he says “mastering your data” is a key step. This is an immense issue for most credit unions. The frustrating reality is the data needed to fuel data-driven decision making is locked up in core and other operational systems. The problem is echoed in the basketball mapping article in which cartographer Kirk Goldberry was limited in the data he was able to access for his analysis until an innovation emerged.

For credit unions, the necessary “innovation” has been around for awhile in the form of data warehouse technology. Integrating data from various systems in an easy-to-access data warehouse is a fundamental milestone in the effort to master credit union data.

The Predictive Element

John’s second major point is what he describes as the “predictive element”. This is the Big Opportunity in Big Data. Retrospective reporting is typically the initial step most organizations take once they have an integrated data source. Such reporting is important but it’s basically a rehash of existing reports plus some additional “backward-looking” reporting based on the integrated data source.

The real breakthrough opportunity is in predictive analytics. When credit unions are able to take this step, anticipating member needs and marketing to those needs is where the real paradigm shift will occur for the credit union movement.

While these points are compelling, the typical non-sports examples of BD/A innovators are Amazon and other major companies with massive resources. How can credit unions take advantage of the BD/A wave?

The good news is the BD/A industry has evolved and there are a handful of innovative CUSOs developing solutions specifically tailored to credit unions. In both data integration and analytics, there are now affordable alternatives available.  Credit unions no longer need to sit on the sidelines of Big Data and Analytics.

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Topics: Analytics, Credit Unions, CUSO

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