Most credit union leaders are familiar with the concept of Big Data and business intelligence, but many fail to fully understand the significance they have on their credit union and its future. Big Data & Analytics can provide credit unions with the ability to make better decisions that positively affect member relationships and ultimately their top and bottom lines. There are several obstacles in the Big Data & Analytics process that need to be overcome in order to achieve success. These obstacles typically take an extensive amount of time to conquer, especially the first time they’re encountered. Credit union leaders should consider the following challenges before implementing a Big Data & Analytics solution:
Credit union leadership teams are increasingly realizing the “buzz” around Big Data & Analytics is real. However, there are two significant questions that get asked about this topic:
- Why should credit unions care about Big Data & Analytics?
- What is the ROI?
As an industry in the middle of a massive shift, credit unions must steer in the best direction to enter a prosperous future.
The Financial services industry has traditionally been an industry where change happens gradually at the direction of a few large institutions. Since the introduction of the internet in the 1990’s, finance has been in a state of exponential change. The digitalization of money is causing an even more powerful catalyst of change: the proliferation of data at a pace most credit unions cannot fathom. Consequently, credit unions must form a data-driven vision to act as a strong rudder to navigate through the data storm.
The DNA of any organism is the model of its identity. Analytical models of data (the building blocks of the credit union) will allow the industry to make better decisions that reflect their character.
As data pours in from multiple facets, credit unions must be able to mold it into a model. Similar to DNA code for each living organism, data needs to have a code. Analysis built on raw data makes organization-wide decisions difficult. Therefore, a certain data structure is necessary. Defining this structure is how each credit union defines their unique character. Every organism has a unique code for their life; DNA. Genetic code instructs every cell and allows an organism to function harmoniously, even when it is not consciously in control. This is the way that the credit union of the future must be designed. The analytical data model (ADM) is a credit union’s DNA code.
The credit union industry is on the cusp of significant challenges with the potential to disrupt the financial services landscape as we know it. Big Data and Analytics is driving a new breed of competitor into what has been a very traditional marketplace. The industry will need to envision and build out the “Next Big Idea” for credit unions to stay competitive and successfully navigate the next 10 years.
Big Data and Analytics lessons for credit unions can come from some unlikely sources. Consider the contest between U.S. and European weather-prediction models. The European Centre for Medium-Range Weather Forecasts (ECMWF) is widely acknowledged to be superior to the U.S. Global Forecast System (GFS). While the GFS has been improved since 2012 when it predicted Hurricane Sandy would not make landfall, the European model is still considered to be the better weather forecasting tool.
Analytics is top-of-mind for many credit union executives. Yet, as with all new technologies, there is a concern that it won’t work. The concern is well justified. There are many technologies that promise to make organizations more successful but fail to yield much for the company besides higher cost every month.
The failure of these technologies isn’t always the fault of the technology itself or the company providing the technology. Rather, it is the failure to properly integrate the new technology into the organization. In the case of analytics, there are several factors that will make or break the technology. Here are 5 factors to consider when implementing analytics:
- Integrate Analytics Across the Organization
OnApproach's Founder and CEO Paul Ablack discusses today's evolution of Big Data and how credit unions can benefit from this increasingly refined information to provide more specific products and services for enhanced value.
Topics: Reporting and Analytics, Analytics, Mobile Banking, Business Intelligence, Big Data, Credit Unions, Mobile Payments, Data warehouse, Data Integration, Marketing, Data Pool, Video, Mobile, Shared Applications, Big data/analytics, predictive analytics, Lending Clubs, Cooperation, Podcast
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