The Decision Maker

Why Credit Union Digital Transformation Can’t Work Without Credit Union Data Integration

Posted by CU 2.0 on Jan 17, 2019 11:01:00 AM

It’s no good to be a dinosaur in the financial sector. Not only are dinosaurs notoriously temperamental, but they can’t type. Oh, and they’re extinct. If branches don’t want to go the way of the dinosaur, then a little credit union digital transformation is their best hope.

(Hint: credit unions aren’t the only industry affected by digital transformation and the emerging primacy of data.)

While digital transformation is certainly the goal, it can’t just organically happen. Credit union digital transformation is a strategic process that incorporates several approaches, from digital engagement to data integration. In this blog, we’ll talk about the challenges of credit union data integration and collaborative analytics strategies.

Tying Together Data Sources

Typical credit unions have somewhere around six to eight data sources. Some have more. While having the data is certainly nice, it’s not much good to just sit on it.

Core and ancillary systems produce data at prodigious rates. These streams of data are all separate, too. Siloed data streams are great when you need to understand only the data produced by one source. However, individual sources of data have a nasty habit of not producing a clear, complete, actionable picture.

Making matters worse is that each system stores its data differently. If you want to perform data analysis on any of your credit union members, you have to check in on each system and pull different data sets from them.

This lack of robust credit union data integration hampers solid, actionable analytics. The first challenge for credit unions then is reconciling individual data streams into one single source of truth.

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Topics: Digital, Data Integration, Credit Unions

Top 5 (and 5 most missed) of 2018: Credit Union Data Analytics – Part 2

Posted by Mark Portz on Dec 27, 2018 11:05:00 AM

2018 has been yet another exciting year in the credit union space as we continue to see the growing significance and adoption of digital and data strategies. As the year comes to a close, we like to reflect on the lessons we have learned and prepare for what is to come in 2019 and beyond. Through collaboration, the credit union movement has incredible unrealized potential. As we look back at 2018, we have compiled a list of some of the industry’s favorite articles regarding credit union big data/analytics (and some others you may have missed) featured on OnApproach’s blog, The Decision Maker. Enjoy!

5 Posts You Might Have Missed:

1. Collaborating for Analytics and Shared Data Applications with Paul Ablack via CUbroadcast [Video]

Paul Ablack, CEO, OnApproach, had the chance to catch up with Mike Lawson of CUbroadcast at the NAFCU 51st Annual Conference & Solutions Expo. The conversation covers topics from evolution of A.I.digital transformation, a collaborative data lake for the credit union industryplatform analyticsdata encryptioncyber security, peer benchmarking, and shared applications on the CU App Store community.  

As a part of the discussion, Paul Ablack explained the progress of the collaborative online analytics marketplace, the CU App Store. In the conversation, Paul explains that, "[OnApproach is] going to build a community around the CU App Store, where credit unions can come in, they can contribute content, and they can comment on the content. Let's say someone puts a really good marketing segmentation report [on the CU App Store], others can build on it, can make it better, they can comment, and place reviews.

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Topics: Video, Credit Unions, Big Data

Top 5 (and 5 most missed) of 2018: Credit Union Data Analytics – Part 1

Posted by Mark Portz on Dec 20, 2018 11:04:00 AM

2018 has been yet another exciting year in the credit union space as we continue to see the growing significance and adoption of digital and data strategies. As the year comes to a close, we like to reflect on the lessons we have learned and prepare for what is to come in 2019 and beyond. Through collaboration, the credit union movement has incredible unrealized potential. As we look back at 2018, we have compiled a list of some of the industry’s favorite articles regarding credit union big data/analytics (and some others you may have missed) featured on OnApproach’s blog, The Decision Maker. Enjoy!

The Top 5 Favorites:

1. Leveraging Data to Create Exceptional Experiences at Ideal Credit Union [Video]

At the Minnesota Credit Union Network (MnCUN) Annual Conference, Paul Ablack, CEO, OnApproach and Alisha Johnson, Executive Vice President of Operations for Ideal Credit Union, joined Mike Lawson, Host of CUbroadcast, to discuss data access, member profitability, member engagement, data lakes, timely and targeted marketing, chatbotsreal-time analytics, and credit union collaboration.  

Part of the conversation focuses on the success of Ideal Credit Union's VIP Program. As stated by Alisha, "... It means a lot to our members... The first [program] that we worked with Paul and OnApproach on, before we started accessing data directly, was our creation of our VIP program. So, we had paid back to our membership over the last couple of years $6 Million, and that is because we have been able to identify who brings money to our membership, how successful they make us, and then we return it to them based on a number of different criteria. Without OnApproach, we would never be able to access that criteria, and even be fair in the distribution of the funds that we give back to our members." 

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Topics: Video, Credit Unions, Big Data

The Death of the Branch: A Lesson About Credit Union Data

Posted by Austin Wentzlaff on Dec 14, 2018 11:01:00 AM

The way we think about credit union data these days doesn’t mesh with what’s actually happening in the industry. Credit unions now have access to more data than they ever have. Failure to leverage that data though? That’s where you should be concerned.

Let’s walk through an example: just over 20 years ago, Amazon entered the book retail market. Their mission was simple: deliver personalized experiences to its customers and make each interaction unique and customized to the individual.

At the time, Amazon was just one man, Jeff Bezos, selling books out of his home. For the book market retail giants, Amazon was hardly a threat, just some crazy guy trying to compete with very large and long-established institutions. Companies such as Barnes and Noble and Borders Books had well over a thousand retail locations and were selling books hand over fist.

Well, we all know how that story ends—Amazon is one of the top retailers in the world and Borders Books is now bankrupt and Barnes and Noble is struggling.

Failure to properly leverage credit union data may hurt as many branches as Amazon hurt bookstores. Basically, the outlook is grim. 

Declining Emphasis on Branches

In the past, credit union success was closely tied to the number of branches it could open. The more branches, the more members, the larger volumes of deposits and loans, and the greater the success of the credit union. All of this success is measured by credit union size rather than credit union data.

As we’ve seen in other industries such as Amazon versus the book market, this has started to change dramatically. The emphasis on the branch at credit unions has since gone away. Members are now looking to more convenient avenues to do their financial transactions.

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Topics: Credit Unions, Branch, Data Analytics

Big Data and Analytics can do some pretty cool things for Credit Unions

Posted by Mark Portz on Nov 17, 2016 11:04:00 AM

Last week, OnApproach’s CEO, Paul Ablack discussed Big Data and Analytics with CUNA’s Senior Editor, Craig Sauer. In the podcast, we learn about the state of the credit union industry, what data means for financial institutions today, and how credit unions can thrive in an industry facing intense fintech disruption.

“95% of credit unions today are not able to truly integrate their data”, according to Ablack. Core vendor solutions do not allow credit unions to easily integrate data from disparate sources, or share and benefit from data of other credit unions. This means 95% of credit unions are at the bottom of the curve for analytics capabilities. As discussed in the podcast, less than 10% of credit union members are profitable. Unfortunately, credit unions at the bottom of this curve aren’t even capable of determining which members are not profitable, as factors such as product mix have proven to be an outdated and misleading determinant. Credit unions need to take action to integrate data and improve analytics to seize market opportunities.

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Topics: Credit Unions, Big Data, Data Analytics

Sharpen Collateral Valuation through Data Integration

Posted by Nate Wentzlaff on Jul 13, 2016 11:30:00 AM

Collateral Valuations are essential while serving members and maintaining a healthy credit union. However, credit unions are relying on inaccurate valuations of their members’ collateral values because of disintegrated data.

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Topics: Data Integration, Credit Unions, Big Data

FASB’s New CECL Comments Could be a Worst-of-Both-Worlds Approach

Posted by Joe Breeden (Deep Future Analytics) on Apr 19, 2016 11:30:00 AM

Last week’s comments by the Financial Accounting Standards Board (FASB) about how they will allow the different levels of complexity in credit loss calculations for lenders of different sizes would seem to be a victory for smaller credit unions and community banks.

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Topics: Credit Unions, CECL, Lending

Saving Small Credit Unions with Big Data

Posted by Nate Wentzlaff on Mar 30, 2016 1:00:00 PM

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Topics: Credit Unions, Big Data

Fintech Startups and Smartphone Adoption Drive Banks and Credit Unions to Innovate

Posted by Paul Ablack on Feb 25, 2016 11:00:00 AM

At the October 2015 Credit Union Big Data/Analytics Conference (now Analytics and Financial Innovation Conference) in Minneapolis, John Best, CEO of Best Innovation Group and a well-known technology innovator in the credit union industry, presented a compelling vision about the disruptive threat facing banks and credit unions right now:

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Topics: Credit Unions, Big Data, Data Analytics

The Evolution of Credit Unions

Posted by Joe Breeden (Deep Future Analytics) on Jan 19, 2016 12:00:00 PM

 We all know that our economy and our society is evolving rapidly through data collection and advanced analytics, yet we are surprised by news each day of another business area adopting advanced techniques. Within the world of finance, credit unions are beginning this same evolution.  
 
We might think “even credit unions” are changing, but with thousands of credit unions and a naturally more collaborative environment, groups of credit unions are combining resources to deploy advanced analytics. Although this will happen naturally, the proposed CECL accounting rules for loan loss reserves will cause a dramatic shift in the use of data and analytics at credit unions, comparable to the changes occurring at larger banks due to CCAR and DFAST.
 
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Topics: Credit Unions, Big Data