What is a data warehouse? Why does my organization need it? How exactly does my membership benefit from enhanced data analytics that result from a data warehouse?
In essence, a data warehouse is a repository for numerous data elements and it is organized in a manner very similar to the way your local grocery store stocks its shelves. For example, in a grocery store, the peanut butter is typically close to the jelly, which also tends to be in the bread aisle; things that tend to be used together are stocked in close proximity to each other.
Correspondingly, data warehouses are designed to efficiently connect data elements that are generally used together. This tends to make for much more enhanced use of the data.
The creation of a data warehouse is neither an art nor a science, but rather a blending of the two. As such, hiring a professional to architect your data warehouse – after they review your organization's data and its sources, workflows, and business needs – is a most prudent first step. With this initial investment in place, the benefits of a data warehouse will become almost immediately apparent.
One of the first benefits to materialize will be the enhanced timeliness of data being converted into actionable information. Productivity reports that may have taken hours or days to complete become available with the click of a button. Think about how these freed-up employee hours could be redeployed within the credit union.
Moreover, the bottleneck of only having a limited number of people that can access the data can be relaxed by rolling out access to the data warehouse to the actual end users of the data. Here again, the need to engage a data warehouse expert is highlighted since properly architected data warehouses will contain user based permissions that limit the data available to each user.
The other unique benefit that typically happens when a data warehouse is deployed is an increased level of curiosity on the part of the employees. With data being readily convertible into actionable information, the staff starts asking for more information. This can result in heretofore unknown data connections being made that identify new opportunities or hidden risks within the organization. Once identified, appropriate responses can be deployed.
Yet another benefit from installation of a data warehouse relates to the enhanced reporting capabilities that become available. Productivity reports can now be run throughout the day. Things like static pool analyses by lender or product type can be built with minimal effort. Concentration risk reports can be developed and deployed to monitor the overall portfolio in a virtually real-time basis. Furthermore, as you build up your historical data sets within the data warehouse, trends become quite visible that will again suggest risks or opportunities to your organization.
Globally, the membership benefits from the existence of a data warehouse in that the credit union will tend to run in a more efficient manner. Moreover, as previously mentioned, various risks and opportunities can be surfaced through the existence of a data warehouse. By mitigating risks and fully availing the organization of the opportunities identified, the credit union will continue to grow in a safe and sound manner while providing great returns to the membership.
A data warehouse can also be used to provide even more personalized service to the member. Being able to synthesize the data available to it, the credit union can develop models and techniques to identify what life stage the member is in and tailor offerings specific to that member's individual needs.
Jim Simon is president of Akcelerant Advisors LLC.
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