In the recent BIGcast, To Fish with a Net or a Spear? Implementing Analytics at CUTX, John Best discusses data warehousing, core conversions, and winning at analytics with Keith Malbrue, CIO at Credit Union of Texas.
Core is NOT King
Years ago, in his previous role at another credit union, Keith Malbrue was the first OnApproach M360 client. He had come to OnApproach (a data consulting company at the time) with a problem. Keith realized member history was very important, and he didn’t want to lose all the member history when converting cores. According to Keith, it often feels like “Core is King” in this industry, but that doesn’t have to be the case. Credit unions should not have to lose member information because of a core conversion. To solve this problem, he engaged with OnApproach to discover a solution to this issue. The solution has come to be known as OnApproach M360 Enterprise.
By equipping his credit union with M360 Enterprise, Keith explains he gained 3 major advantages:
- The credit union now has a single source of truth for member information and reporting across the organization.
- He could now convert to any new system without losing valuable member history.
- His credit union was equipped to perform reliable and advanced analytics
According to Keith, “It’s not about the core, and it’s really not about any system that you use to service members. It’s about your members and it’s about the history that you have over time with your members. I wanted to be on the system that would allow us to go to multiple systems to do whatever it is that we want to do, but we retain that member history regardless of what system it was generated on.”
Getting Started with Analytics Quick Wins
As Keith explains in the BIGcast, “When you have buy-out from the top, and people see the value of having access to that information in a timely manner, they quickly get on board.” This emphasizes the idea that quick wins are important in an analytics project.
As the first M360 client, Keith recalled a story of significant quick wins. His credit union noticed by looking at member accounts that members had been going to a competitive bank to take out car loans. By partnering with Transunion, Keith acquired a list of members that had the loans from the bank. From the data warehouse, they determined a great number of members to whom they could offer reduced interest rates or another relevant and targeted offer. These members were then sent a letter about the offer and the credit union followed up with a phone call. This simple process was highly effective and brought in $9 million in recaptured loans because the credit union had the appropriate access to member data.
Keith’s Advice for Credit Unions
A key piece of advice Keith left for credit unions listening to the podcast is, “Take a look at your core strategy. How do you want your members to perceive you? How do you want your members to use you? And then look at the partners that you have that are supporting that vision. Do you have access to all that information? Are you able to produce reports in one version of the truth that allows staff and boards and everyone in between to be able to act on that information because they know it is accurate, they know it is timely. And look at your partnerships. There are some partners who resist giving you access to the information that you need. I would put all those partners on notice that… this is our members’ information, and we’re paying you for it, so we have to have this information. And if we don’t, then in the future, as soon as the contract is due, you’re not going to be a partner anymore.”
Keith continues to explain that if your credit union is not yet practicing data analytics, then you are going to be competing against those companies that are leveraging their data. He states, “More and more credit unions understand the value of this information, and if you’re not doing it, your competitors will be doing it. It’s not a defensive strategy. It’s not an offensive strategy. I think it’s something that you absolutely have to do. It’s the most important system you have and all the other systems that you have really are just an input into it.”
To listen to the entire podcast, visit http://bigfintechmedia.com/BIGcast-Network/to-fish-with-a-net-or-a-spear