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.
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
The Internet of Things (IoT) has gained a considerable amount of hype as the “Next Big Thing” to change the world as we know it. Applications of IoT are thought by some to be limited only by the human imagination. From simply controlling your home (e.g. - lights, thermostat, etc.) with a smartphone, to life saving medical and healthcare systems, IoT is pervasive and growing rapidly.
Millennials are living in a vastly different world than their Baby Boomer parents. They live in a time in which a phone isn’t just a piece of plastic used for making calls, it’s now “smart” and acts as an extension of oneself. A time in which “going shopping” or “depositing a check” no longer requires you to leave home. We are living in a world dominated by the rise of online/mobile and the demise of brick-and-mortar. This changing consumer landscape is being primarily driven by Millennials as they demand more personalized experiences.
Defining Millennials – Millennials (also known as the Millennial Generation or Generation Y) are the demographic cohort following Generation X. There are no precise dates when the generation starts and ends. Researchers and commentators use birth years ranging from the early 1980s to the early 2000s.
McKinsey & Company released a fascinating report in November 2014 titled The Bank of the Future.
The observations of author Somesh Khanna are very relevant to the credit union of the future with a few unique twists.
In order to continue thriving, the credit union industry must launch predictive analytics solutions to impact local initiatives
In his 2007 book, Competing on Analytics, Thomas Davenport explains how analytics solutions have been implemented to give competitive advantage to companies throughout various industries. The astronomical amount of data being collected and analyzed by large companies (financial and non-financial) threatens individual credit unions who currently rely on rearview reporting of historical data. Therefore, a holistic approach to data that leverages predictive analytics is the key to the success of credit unions. With predictive analytics, credit unions will be able to effectively cultivate the abundance of data available (from a variety of sources) to create innovate solutions that capture opportunities within their local community. By utilizing public data (e.g. IMF statistics) along with their private data (e.g. core systems), credit unions will truly be able to “think globally, act locally”.
On October 16, 2014 I attended an afternoon of presentations and discussions on Big Data with a focus on information and insights for capital markets professionals. The event was a joint live broadcast of theCUBE and #BigDataNYC.
The meeting started with Wikibon Senior Analyst Jeff Kelly presenting compelling findings and insights on Big Data adoption in the enterprise and analysis of the companies best positioned to take advantage of the Big Data opportunity.
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.