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How Data Preparedness Can Prevent a Credit Union Ghost Town
Thursday, October 25, 2018 6:40 AM

Jason Veenker, Solution Specialist, AdvantEdge Analytics, CUNA Mutual Group

History is filled with examples of failure to look beyond the short-term and understand the risks and rewards of the future. Take the prosperous California mining town of Bodie in the late 1880s, for example. The town skirmished with multiple catastrophic fires but planned and executed for tomorrow with a water pumping system that helped keep them safe for 40 years. Yet, after years of neglect and postponing upkeep for the pumping system, Bodie burned down in 1932. The pipes and infrastructure had clogged, and the people who knew the system or how to maintain it had all moved on or died.

Bodie is now a preserved historical location and legitimate ghost town. When we think about credit unions today, one could argue we are similarly at risk.

Tomorrow’s Solution May Not Be Enough

When the credit union movement started, it was small, and we knew all our members. We went to their barbeques and celebrated marriages and births. But times have changed, and member bases are huge. Data analytics can help us connect with our members on a personal level—make them feel like we’re sitting across from them enjoying a hot dog.

For this reason, many credit unions have thought that technology (a data warehouse) is the solution. The thinking goes, “If we can get everything connected, aggregated, combined, and centralized, we’ll get better reports to help us understand our members.”

That’s tomorrow’s solution. But with the pace of technology and member expectations, it won’t be enough by tomorrow afternoon.

To achieve personalization and a great member experience, we must unlock the promise of “beyond tomorrow” by changing how we think about and use data analytics. This isn’t about better reports or standing up a technology. It’s about building a culture of data enthusiasts, using case-driven approaches to strategy, and innovative problem solving.

The technology will always change no matter what we do. It’s incumbent upon credit unions to instill a mindset that can wisely determine when the needs of the members demand a technology upgrade.

You see, the fire of 1932 may have been the final straw on Bodie’s back, but that’s not what ultimately pushed the town into failure. Years of ore deposits and precious metal declines in the mines squeezed the economic viability out of the town. New mining towns with fresh strikes drew citizens away, along with the only railroad. Bodie was successful in preparing for tomorrow’s fire, but not for the unexpected forces that ultimately combined for its failure.

Credit Union Boom Town

The good news is that if we appropriately harness the power of data transformation, we’re not going to end up like Bodie. The solutions, the technology, the partnerships—all of it is in place to ensure we don’t fail to look beyond tomorrow. Far from being a landscape of ghost towns, credit unions will thrive.

When focused on the member and continuously evaluated, data analytics unlocks three primary value drivers for credit unions:

  • Boosting P&L,
  • Creating new sources of growth, and
  • Delivering the digital bank.

For credit unions, it comes down to data analytics being the key to transformation for both today and the future. Transformation happens when you organize data through data management, translate it through reporting and visualizations, and then get to the real meat: execute on actionable insights to drive real change.

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CUNA Mutual Group is a five-star endorsed business partner for Credit Union Resources, Inc., a wholly owned subsidiary of Cornerstone Credit Union League.