A Member-Focused Approach to Remaining Competitive in the Digital Age

If you aspire to overcome current market disruptions, grow and evolve your business on a continual basis, and provide Amazon-level service to your members, then it is imperative you begin building a data strategy right away.

Market disruptors are quickly and aggressively elevating the need to gain an understanding of consumers’ current (and future) wants, needs and habits. Now, continually understanding and addressing your members’ evolving needs is no longer a plus, it’s a must.

Though consumers will continue to come to your business for similar reasons, their expectations and desires for how they interact with your business have changed. Many of your most financially active members, namely millennials and Gen Zers, are expecting your business to expand into the digital realm. You’ll need to meet these expectations or you risk losing key member segments to your more progressive competitors.

Understanding Market Disruptors

1.  Growing Market Competition

To keep your members, you need to compete with the growing number of organizations that are after your consumer base. The strongest among these competing organizations can be bucketed into two categories:

• Traditional, financial organizations that have vastly expanded their digital capabilities to meet their consumers’ needs, i.e. large banks and finance companies that offer person-to-person payment apps or AI payment solutions.
• Non-traditional organizations that are taking consumers from traditional financial organizations, namely fintechs, digital-only banking institutions and retail banking platforms (also known as “techfins”) like Amazon Pay, Apple Pay and PayPal.

Bear in mind, it’s not that you need to do exactly what these organizations are doing in the way of consumer technology offerings – in fact, that may not be the right move for your business at all. Rather, it is that you too should be evolving your strategies to meet your members’ needs and expectations.

2.  Shifting Consumer Expectations

The buying habits and service expectations of key consumer demographics are shifting. Transforming how you communicate and sell to these demographics can help ensure you are meeting these shifting expectations so that you do not lose them to your competitors.

Consider how you interact with your preferred retailers today, versus just a few years ago. What these businesses did – and continue to do – is learn how modern communication channels make life easier for their customers and leverage those expanded interactions to uncover new sales opportunities.

There are numerous communication channels you can utilize to transform and personalize relationships with your members. These channels include web, email, video, mobile app and text messaging. You don’t need to start using each of these channels all at once, but you should leverage information you have on hand to determine which of these channels would result in the highest penetration and engagement among your members, and start tapping into those as soon as possible.

There is also a growing expectation among consumers that all interactions, both virtual and in person, are tailored to their personal sales and service preferences. They are doing their research to get to know your business, so you should also be doing your research to get to know them.

Overcoming Market Disruptors

Providing Amazon-level service can only be achieved by, first, uncovering the right data, and second, evolving your digital strategy. Data provides the “who, what, when, how and why” of your members’ behaviors and needs, which can then be leveraged to adopt member-focused digital tools and strategies. Member data can be found in a multitude of places. The key is knowing where to look, what to do with the data once found, and how to appropriately leverage it.

There are four primary “tiers” of data that your credit union should be sourcing to receive a fully-formed, 360-degree view of your members, which will help to improve your member relationships, business strategies and annual revenue. These four data tiers include enterprise data, engagement data, partner data and collaborative data.

1.  Enterprise Data

Enterprise data is comprised of information pulled from the systems across your organization. Tapping into this data can help you identify your most profitable members, flag your at-risk members, and uncover new revenue and pricing opportunities. Enterprise systems include loan origination systems, insurance tracking systems, core processors, payment processors, master customer information files (MCIFs), customer relationship management systems (CRMs) and others.

Additionally, these systems can be put into a single data management system that will communicate between the independent systems to create a single “language” for all of the data, so you can streamline and unlock even more member transaction details and trends.

2.  Engagement Data

Reviewing data from all internal and external channels used by members to interact with your business can tell you a lot about these individuals’ needs and habits. Engagement data pulled from these channels can include member service chat history and call logs, email and newsletter interactions, mobile app history, social media engagement and website interactions.

Through compiling the data from these channels you can learn more about your members’ interactions with your credit union, which will strengthen your understanding of their financial and servicing needs. These newly obtained member insights can be leveraged to optimize the user experience across all devices and channels, which is likely to result in winning over new and disengaged members.

Looking into your members’ engagement and transaction histories can also give you a much higher footing ahead of any planned in-person interactions. This data will help you understand and predict what each member may want from your credit union, which will essentially guarantee a more successful meeting for both you and the member.

3.  Partner Data

Leverage strategic partnerships to access a larger pool of consumer data beyond that which you have access to inside your organization. Asking your business partners, product providers and other third parties to share their data can tell you a lot more about your members, including their payment, transaction, claim and purchase habits.

Insurance providers, card processors, risk management and tracking partners, and remarketing and recovery servicers all keep large amounts of data on your members that can help you to better uncover – and even predict – the risks and opportunities offered by each individual.

By combing your member data with partner data, you can enhance your understanding of member demographics, which can help you more accurately target the right member segments with product offers to increase sales results. This combined data can also improve your ability to identify and predict risks based on an expanded view of members’ claim and/or payment histories.

4.  Collaborative Data

Collaborative data combines transactional, behavioral and engagement data from credit unions across the industry. Accessing this expanded level of data uncovers new sales revenue and risk management opportunities through a better understanding of members from the industry or demographic level, down to the regional or individual level.

Sharing data with the larger industry can open up new opportunities to enhance member interactions, reduce costs, improve operations and automate transactions. In fact, credit unions have reported as much as a 27% lift in net ROI after gaining access to the industry-level insights and reporting tools offered by a collaborative analytics platform.

Once you begin to leverage all four tiers of member data – enterprise, engagement, partner and collaborative – your credit union will more successfully and consistently compete for consumer business by harnessing the same level of data as your most disruptive competitors, while providing an unmatched level of service only a credit union can offer.

Michael Bryan is Vice President, Digital and Data Strategy for Allied Solutions. He can be reached at michael.bryan@alliedsolutions.net.