The impact of the “Great Recession” hit the financial services sector hard, including the usually hardy U.S. credit unions. Without the profit pressures of endured by commercial banking institutions and a core belief of putting their members first, credit unions have tended to weather past financial storms.
However, the economic dislocations of the past few years have deeply affected credit unions. Like their for-profit cousins, they are suffered from decreased revenues and the prospect of more woes to come in the form of the Fed’s pending interchange rules.
In seeming panic mode, the prevailing response to the prospective interchange rules by banks has been to increase existing or create new fees. Credit unions are being encouraged to follow suit. However, there is another area in which credit unions can find new revenue: cross-selling existing customers.
The typical first step to launching a cross-selling program is to identify a target product line. Then, a list of qualified member prospects needs to be generated. That’s a problem for many credit unions: discerning which members to approach with an offer to acquire the target product. Information on which members own which products is usually locked up in different systems that don’t “talk” to each other. The result is often an expensive, one-time effort to connect member data from the various databases to support the cross-selling effort.
A better way to accomplish the cross-selling goal is to create a comprehensive reporting and analytic capability that combines data from disparate systems into a central repository (data models) and makes it available to business users in the form of a highly intuitive and robust user interface.